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Government officials and industry stakeholders will meet Thursday at the White House to promote US leadership in fifth generation wireless technology, or 5G. It would appear that the focus will be on the importance of staying one step ahead of China, which is actively fighting for the top spot in wireless leadership.
The event is designed to send the message that the Trump administration regards 5G as a national priority. But it ignores the biggest obstacle for US leaders: the misguided trade policy of the administration. Indeed, the trade war between the administration and China threatens to increase the cost of wireless infrastructure by several hundred million dollars at a critical moment in the 5G race.
This is a classic case where the right hand does not know what the left is doing.
Let me explain. Last week, the US Trade Representative finalized new tariffs on an additional $ 200 billion of Chinese imports. In the middle of the list of 200 pages of merchandise subject to the new tax are lists of "machines for receiving, converting and transmitting or regenerating voice, image or other data, including switching and routing devices. entries for "apparatus for transmitting or receiving voice, images or other data, including communication apparatus in a wired or wireless network".
Although these lists do not sound the alarms, they should. This is because 5G technology requires to install a lot of things that can be considered as "communication devices".
The standard for 5G will be much more than a simple upgrade to our current 4G networks. 5G will be the unifying fabric that connects billions of devices in our homes, cars, offices and communities in the fastest, most reliable and most efficient way possible. Faster speeds mean that a high-definition video that takes an hour to download on a 4G network would be available in 5G in seconds. More reliability and responsiveness mean that 5G will pave the way for augmented and virtual reality applications, creating new possibilities for educational tools and entertainment experiences. Lower energy demand will lead to efficiency gains in the Internet of Things, the growing network of smart devices and sensors where energy needs must be kept to a minimum to allow connected devices to extend their life.
Add all this together and this revolutionary standard will be the catalyst for changes in our daily lives that we are just beginning to imagine, from driverless cars to drone delivery to machine learning to make our lives more efficient and our economy. more competitive and productive. In addition, the deployment of these new networks could generate up to 3 million new jobs and boost our economy by $ 500 billion.
To prepare for this future hyper-connected 5G, the Federal Communications Commission – on which I work as a Commissioner – erases the specter of our skies and prepares it for the market. In the field, work is underway to deploy the mix of towers, small cells and essential fiber facilities for these new wireless networks. But it is not a cheap task.
Indeed, the deployment of new 5G networks will require massive densification. In practice, this means that the networks will have to include large deployments of small cells, which are about the size of a pizza box. According to some estimates, it will take 800,000 of these small cells to remain competitive in 5G. Compare that to some 280,000 traditional cell towers needed to protect the nation with 4G, and you have a big infrastructure challenge. While there is no clear consensus on the price tag for this critical infrastructure, it will take hundreds of billions of dollars.
One thing is clear though: the lifting of new tariffs on all domains, from semiconductors to modems to routers, will not facilitate the deployment of 5G wireless service. In fact, it will make it much more expensive. Much of the network equipment associated with 5G deployment developed and used in the United States, but assembled or produced in China, will be subject to special rates of up to 25%. Add to that and you have a significant tax on the deployment of 5G infrastructure. This tax will increase the cost of building new networks. This is particularly detrimental to a new technology that requires much more than previous generations. This will also reduce the number of jobs associated with the development of these networks. More importantly, it will slow down the deployment of next-generation networks.
Even worse, the FCC has so far failed to understand the implications of our country's trade policies for 5G leadership. Although the agency has generally asked for feedback on how the United States can be at the forefront of next-generation technologies, it has not yet asked about the impact of the new rates on our ability to deploy networks and commercialize new services. The agency remains silent about the impact of these rates on our 5G wireless goals.
We should worry about it. After all, it's not a given that the United States will lead the world in 5G wireless technology. Other countries are moving more quickly the key frequency bands, including South Korea, the United Kingdom, Spain and Italy. Similarly, countries like China are building network facilities faster. This is important because the advantage of leading the overall burden of 5G technology is considerable. The United States has dominated the world in deploying 4G technology, the current generation of wireless technology. As a result, the smartphone revolution and the "apps" economy have developed on our shores.
Getting caught in a trade war that has an impact on the deployment of the 5G network is unwise. This is not the way to win. It sacrifices our technological leadership. Proponents of tariffs may claim that they will stimulate the US economy, but these benefits will be ridiculous compared to the additional costs that tariffs will require to deploy 5G, or the cost of losing our technological advantage to our economic competitors.
Jessica Rosenworcel is Commissioner at the Federal Communications Commission.
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