You might
have heard about a National Security Council initiative identifying the security
and public safety benefits in having a government owned fifth generation
wireless network leased by commercial ventures. See https://www.wsj.com/articles/u-s-memo-urges-big-push-on-5g-wireless-technology-1517200319;
http://wreg.com/2018/01/29/axios-white-house-considering-nationalizing-5g-mobile-network/.
While
quickly rejected as unnecessarily intrusive of marketplace forces, the document
does raise questions about whether and how shared infrastructure investment might
make sense. Even ardent libertarians might
not reject the pooling of resources where a faster, more efficient and cheaper
output occurs. For example, AT&T won
a competitive tender to build a nationwide, First Responder Network available
for shared access by state and local public safety departments with AT&T
able to exploit unused spectrum for commercial services. See https://www.firstnet.gov/.
Few would consider this socialism, a usurpation of the commercial marketplace
and government mission creep.
The First
Responder network provides a case study in how pooled resources can expedite
the availability of leading edge technology that can largely solve access,
affordability and network compatibility issues.
The 911 disaster highlighted how various first responders could not
communicate with each other, even at short distances, because of different
frequencies and equipment types.
Arguably, similar benefits could accrue with government expediting the installation
of a 5G network, particularly in rural areas not likely to see speedy
deployment in light of the expense in building small towers with compressed signal
contours. Because of the fungible nature
of transmission and switching capacity, commercial ventures still could
differentiate their services and maintain a competitive marketplace.
Nevertheless,
I too have concerns about government ownership, particularly when the
motivation appears more about foreclosing foreign snooping and facilitating
domestic surveillance options.
Additionally, the First Responder Network does not provide an air tight
case for 5G network sharing, because most public safety networks fit within the
ambit of what governments provide while the commercial marketplace has largely
functioned without much government involvement for mobile telecommunications
and Internet access.
The NSC initiative
does suggest that infrastructure sharing can make sense in some cases. Another way to think about sharing is to separate
one element in a bundle of service functions leaving the remainder still within
the ambit of the commercial marketplace.
Perhaps surprisingly, telecommunications ventures throughout the world
have executed this model. It’s often
called “Carriers’ Carrier” and it has provided a platform for both cost savings
and removal of the potential for anticompetitive behavior. For example, the United Kingdom government
ordered British Telecom to divide itself into a basic local exchange carrier
and a venture able to pursue any and all other markets. The local carrier operates as a Carriers’
Carrier offering first and last kilometer access to every venture, including British
Telecom, on fair and nondiscriminatory terms and conditions. I readily acknowledge that there are other
examples where a carrier intermediary adds little value and raises the cost of
capacity.
The recent 5G
proposal triggered an immediate and indignant response ensuring no
consideration of even promising Carriers’ Carrier options.
