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What’s the right path for deploying 5G infrastructure?
5G, the fifth generation in mobile wireless networks, promises an innovation revolution by bringing digital intelligence to previously analog technologies. 5G speeds will be 10 times faster than the wireless speeds we know today and will eliminate latency (or lag time), enabling technologies that need instant, seamless connectivity. 5G will foster technologies such as autonomous vehicles, virtual reality, and remote surgery and will herald a new era of smart bodies, homes, cities, farms, and cars.
The comparatively easy part of 5G is retrofitting old devices with artificial intelligence to make them smart. Consider AutoPi, which turns ordinary cars into something like KITT, the talking car from Knight Rider, or Ikea’s smart lightbulbs that connect to the internet to make power consumption more efficient.
The hard part of 5G is getting new networks deployed. 5G requires a paradigm shift in the thinking and deployment of physical networks. Current rules governing physical infrastructure are predicated on monolithic, 200-foot cell towers, but 5G networks are made up of thousands of small cells integrated to street poles or camouflaged with other structures. 5G also represents a paradigm shift in business models. Instead of human users with monthly mobile phone subscriptions, 5G users will be billions of machines and sensors, the connectivity to which will likely be purchased by a variety of actors through different kinds of contracts. Unsurprisingly, the barriers to the 5G future are not technological but regulatory.
Fortunately, the Federal Communications Commission (FCC) has taken the lead to modernize existing rules with an item on its March agenda to streamline wireless infrastructure deployment. This proposal was based on extensive consultation about environmental and historical concerns with state and local historic preservation officers, wireless carriers, network builders, tribal nations and intertribal organizations, relevant federal agencies, and others.
While the FCC can do much of the heavy lifting, decisions about whether and to what degree 5G networks are deployed will be made at the local level. Such questions are the heart of telecom policy. It is in the public interest that communications networks are widespread and accessible. Economics can help determine how to deploy networks efficiently to maximize their benefits for all.
Historically the notion of communications being a natural monopoly dictated that a single, highly regulated provider would win the rights to deploy infrastructure in exchange for service and coverage requirements and, in some cases, a revenue share with the local government. However mobile wireless networks utterly disrupted those assumptions, proving that multiple wireless networks could be deployed at significantly less cost than wireline networks. After decades of stasis of highly regulated national telephone monopolies, private providers of mobile telephony have connected more people faster and better than any government. Thanks to market liberalization, nearly every person on the earth can access a mobile phone and wireless network. 5G, if we allow it, promises us the next revolution.
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California exemplifies a tale of two cities when it comes to best and worst practices for rolling out 5G. San Jose sees 5G rollout as a rent extraction opportunity from mobile carriers, charging $3,500 annually to access each of its street poles. It argues that it can charge whatever it wants — ideally helping it to cover millions of dollars of city debt. But street poles are a city-owned monopoly, not a competitive market. The few actors that would like to access poles, whether they are electric companies or mobile carriers, are not similarly situated, and they have few to no other options to deploy infrastructure.
Sacramento, on the other hand, is a model city that has already launched its pilot 5G program with 101 cell sites, expanded backhaul, an expedited permitting process, and free Wi-Fi in 27 parks. Sacramento seeks to work with outside innovators for the purpose of rapid 5G deployment that maximizes strategic value to the community and enables residents to experience gigabit speeds that were previously only available via costly fiber. Such forward-looking cities recognize the benefits of private investment to leverage technologies that improve operational efficiency for the city, lower costs, and increase the quality of life. Wireless networks have natural scalability that allows multiple firms to compete at once, so cities that keep market-entry barriers low will facilitate competition. The social benefits of high-speed communications networks exceed the pecuniary self-interest of local government actors.
Digital connected networks are America’s greatest free-market success story and the result of rational, bipartisan policy that maximized private-sector investment and infrastructure competition on many generations of wireless and wireline technologies. Promoting 5G will also protect US leadership in wireless innovation. The global race for 5G is already on, and South Korea, Japan, and China are well on their way. To stay at the forefront, American leaders at all levels need to streamline the rollout of 5G.