Equipment makers, network carriers, and regulators have been working on policy initiatives that could accelerate the deployment of next generation wireless and wireline broadband networks and applications. These innovative new networks are expected to deliver a leap in speed to consumer and business applications.
The upgrade in speed from 5G wireless networks is expected to be huge. In 2017, 5G-powered home routers from Samsung were clocked at 4 gigabits per second – seventy times faster than 2016’s average internet speed of 55 megabits per second. That level of speed will download a 100 gigabyte 4K movie in 4 minutes. This leap in speed will accelerate both commercial and residential applications and make new innovations possible. For business users, 5G will boost productivity and incomes.
The American Consumer Institute Center for Citizen Research’s Lost EconomyTM report estimates the additional economic benefits of investing and building a 5G network “will generate $533 billion in gross domestic product (GDP). Although this estimate does not include any of the economic benefits from operating and providing 5G services to consumers going forward, we estimate $1.2 trillion in consumer benefits from these broadband wireless services.” The economic stimulus of 5G networks would produce an additional 3 million jobs.
Separate reports cited in the Lost Economy study indicate similar competitive advantages, including $1.8 trillion in savings over seven years. By comparison, self-driving cars and connected devices for health applications could produce annual economic benefits of only $447 billion and $305 billion, respectively.
Early stage deployment of 5G network infrastructure is underway in the US, China, Korea, Japan, and a few other industrialized countries. The pace of deployment and development of 5G matters because early dominance in devices, networks and standards will set the stage for technical and market advantages throughout 5G’s lifecycle.
The Federal Communications Commission (FCC) has proposed removing some regulatory barriers that slow the 5G rollout in the US. Local regulations specify the price for right-of-way permits to deploy fiber-to-the-premises and the level of fees for pole attachments of small-cell 5G radios.
Local regulatory fees are erratic as are the delays in obtaining local permits. The FCC has issued guidance that should limit the slow local approval process that has plagued some 5G deployments in the US. The local cost and delay impediments undermine the business case for deployment in too many neighborhoods. In a recent study from CMA Strategy Consulting, the economic disadvantages of regulations were estimated. The study highlighted the effects of replacing the current, erratic right-of-way and pole attachment prices with prices capped at the median of current local prices.
When a median price replaces the erratic prices, the cost of fiber and 5G deployment drops and the business case for local deployment improves. As a result of taming regulatory fees, 5G and fiber would be extended to many more households.
Reducing the regulatory costs of 5G and fiber optics buildout would induce an additional $2.6 billion in capital expenditures. Ninety-seven percent of those additional capital expenditures would be invested in rural and suburban areas, and those areas would develop an additional 358,000 jobs.