Getting 5G Regulations Right the First Time Around

Fifth-generation mobile wireless (5G) standards have been drafted and early stage public trials will be underway in the first half of this year.  To move 5G beyond its infancy, US network operators and device makers will need to invest $275 billion in the next seven years.  The Federal Communications Commission (FCC) has started down the path of selecting which spectrum can be devoted to 5G services, and some economic studies have documented the colossal impact that 5G may have on our economy within a few years.  One nagging loose detail is security.  It would be imprudent to build a new high speed digital network whose applications lack adequate cybersecurity measures.

The billions of expected devices connected to 5G will be an irresistible target for criminal hackers.  Hackers will shanghai armies of low intelligence, but well connected Internet of Things (IoT) devices.  By hacking into those devices, a digital army can be assembled to barrage important infrastructures such as domain name servers.  That will degrade service throughout the Internet.  Although some resist government guidance, this threat can be averted by enforcing the mandatory use of standardized security precautions in IoT devices.

That need for regulatory guidance was echoed by the wireless association, CTIA, when it urged the FCC to adopt 5G regulations that encourage streamlined “local review of wireless infrastructure applications, clarify actions that prohibit or have the effect of prohibiting wireless service, and ensure that compensation for use of public rights of way is cost-based, fair, and reasonable.”

Concerns about local buildout permissions and haggling over rights-of-way and pole attachments can delay progress for providers and consumers in tens of thousands of local jurisdictions.  But inducing the FCC to place an adequate number of blocks of 100 MHz spectrum up for auction is a far bigger concern.  Spectrum auctions at the FCC seem to take years.  Fortunately, this time, the delays might be shorter because the location of suitable spectrum (above 3.5 GHz) is less congested than usual.

In the past, the FCC felt free to set aside spectrum or offer discounts to bidders it considers “more equal” (designated entities) than the rest.  The FCC can lock the economy into slow gear through politically driven regulations that govern the timing and geographic sequence priorities for 5G rollout.

Recently the FCC gave itself the authority to control Internet service price levels through rules on volume discounts, priority premiums, and discriminatory pricing for regulator-chosen industries.  The FCC has an ugly tradition of requiring mandatory deep discounts to competitors and requiring collocation arrangements for competitors’ equipment.  In an extraordinary regulatory rendition, the FCC dragged mobile ISPs down the Title II rabbit hole.  Title II is the alternate universe where the FCC can set prices and any capricious rules it fancies, so there is legitimate reason for concern.  These antics can dry-up investments and delay consumer benefits from 5G.  We can only hope the new FCC leadership will abandon its tools of regulatory torture and instead focus on what’s good for consumers.

The FCC has a daunting list of responsibilities for 5G.  To ensure prompt use of high-value spectrum, the FCC and Congress should prioritize spectrum liberalization, disregard objections to financial “windfalls,” avoid complex actions and sharing rules, and repurpose and auction federal agency spectrum. Repairing regulatory mischief must start with a Heimlich maneuver to disgorge ISPs stuck in Title II.

Landline ISP networks should also be freed from Title II detention since their latest competitor, 5G will be far more attractive to consumers.  The FCC will also need to resist the predictable calls from legislators seeking “relief” for municipalities who could not resist building their very own government landline ISP networks.  Those networks will soon be technologically antiquated.

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