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Pentagon’s national 5G proposal puts carriers on edge

The Pentagon and the Federal Communications Commission (FCC) have both put forth 5G-related proposals, which have alarmed wireless carriers, The Wall Street Journal reports. The Pentagon’s recent request for proposals (RFP) is for a new 5G military cellular network. The network would lease excess capacity to private sector users such as car manufacturers and wireless carriers.
Meanwhile, the FCC is crafting a plan to auction off some of the Pentagon’s band at the end of next year. The military uses spectrum for radar and aviation, but these frequencies could be perfect for the faster 5G signals commercial operators are currently trying to deploy.

The telecommunications industry has been on high alert since the Pentagon and FCC revealed their proposals, according to The Wall Street Journal. Industry experts believe the Pentagon’s proposal in particular could undermine cellular licenses’ value. That’s not good news for carriers like AT&T, T-Mobile and Verizon, who paid tens of billions of dollars to obtain these licenses.

“As America’s largest infrastructure investor, (a September 30 White House visit) was another opportunity for us to visit with policy makers about key topics like 5G, spectrum policy and how the government can help foster expansion of internet access and affordability,” AT&T said in a statement. “Competing with China on 5G is about more than just spectrum, it requires considerable investment in fiber broadband and smart regulation.”

Congress backs the FCC’s plan

Some Congress members have put their support behind the FCC’s traditional spectrum plan. A bipartisan group of senators and representatives have sponsored the Beat China for 5G Act of 2020, which would require the federal government to launch an auction prior to 2022. The bills are still at the committee level, however.

Last month, lawmakers asked President Trump to argue against the Pentagon’s proposal. They wrote that the Pentagon’s request, “contradicts the successful free-market strategy you have embraced for 5G.” Meanwhile, House Energy and Commerce Committee Chairman Rep. Frank Pallone (D., NJ) wrote the Commerce Department’s telecom administration office, looking for information on federal policies he deemed, “incoherent and erratic.”

“(The Defense Department) clearly doesn’t have the authority to end auction-focused spectrum policies for the nation, let alone act unilaterally towards that goal,” Pallone wrote.

The future of government-controlled spectrum

Currently, the federal government uses wireless licenses to ensure instances like airplane radar and cell phones sending interfering signals don’t happen. The FCC gave TV and radio stations licenses for free until the end of the 20th century. That’s when wireless carriers’ presence became more prominent allowing the government to auction new licenses and push the proceeds towards the U.S. Treasury.

Meanwhile, private companies like Google have argued that new technology lets the latest smartphones share airwaves with other devices and limits the need for expensive licenses. While the FCC has yielded more frequencies for uses like Wi-Fi that don’t require a license, it still holds final authority over the process.

The wireless frequencies under Department of Defense review can create a block that would be ideal for high-speed networks. The entire spectrum band could attract up $100 billion at auction on its own, according to Craig Moffett, analyst for telecom and media research firm Moffett Nathanson LLC. However, the current supply of spectrum that’s saturating the market could bring that amount down. Meanwhile, wireless network operators could lease the spectrum rather than purchase it if airwaves were shared.

There’s no way to tell which proposal the federal government will pursue. For now, it’s a dispute that leaves telecom companies unsure of where they stand.

“We constantly field questions about how the country’s telecom policy might change under a (Democratic Party presidential nominee Joe) Biden presidency,” Mr. Moffett wrote in a note to clients. “The focus on what might change, however, seemingly ignores the utter incoherence of the status quo.”

Joe Dyton can be reached at joed@fifthgenmedia.com.

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