Global race for 5G heats up with latest US Congress bill

Analysis A global race to roll out next-generation 5G mobile networks has intensified with the approval of new legislation by the US House of Representatives.

The peculiarly titled Repack Airwaves Yielding Better Access for Users of Modern Services Act [PDF] – designed to spell out the name of a staff director of a key Congressional committee, Ray Baum, who died last month – includes a wide range of measures but most critically sets the stage for 5G networks in the US.

Key among them are the Spectrum Deposits Act and the Mobile Now Act, both designed to streamline the auction and use of airwaves to send and receive 5G signals. The first gets around the restriction on banks to accept upfront payments, and the second allows the federal government to both identify future spectrum for 5G use as well as speed up the installation of 5G equipment on federal property.

In addition, it creates a new Broadcast Repack Fund by which the current users of spectrum that mobile companies want for 5G will be reimbursed for the cost of moving to a different wavelength.

All these measures – and a few others included in the bill – are designed to help overcome obstacles to the real-world installation and use of 5G networks: a technology that is expected to usher in a new era of hyper-connectivity.

Fifth-generation wireless technology has the potential to send billions of bits of data per second – 100 times faster than the current best 4G LTE technology. In addition, 5G is being designed to work with a range of new devices, from connected cars to internet-of-things items.

Hold your horses

There is a big problem though: 5G needs new spectrum and lots more base stations. There is a finite amount of usable wireless spectrum and most of it is already being used. So not only will companies have to be moved off their current spectrum but it will have to be decided who gets to use what slices of spectrum in order to make 5G networks work properly.

In addition, there will need to be a vast amount of additional equipment installed. Current mobile technology, on average, requires base stations every 1-2 miles apart; that will have to be reduced to every 500m for 5G (more for dense areas; less for rural areas).

It's impossible for mobile phone companies to buy millions of very small amounts of land to host antenna so they rent space on other people's land and by far the most common solution is to pay local government for the use of already existing streetlights and power poles.

It all comes down to money, of course. Companies using the spectra that 5G operators want aren't keen on moving but they will do so for a fee. Likewise, local government has legitimate concerns about placing base stations all over the place but at the same time can hear the tills ringing.

Prices vary widely across the United States but the average cost of installing equipment on a pole is around $2,000 per year. AT&T recently complained that it had received an estimate of $8,000 a year from a city in California. Even in low-cost Georgia, the local government felt it could get away with asking for $6,000 per pole per year.

There are roughly 350,000 base stations in the US and that number would likely have to quadruple (again, these are all rough figures) for 5G. So the annual cost of simply hosting 5G equipment is in the billions of dollars.

Unsurprisingly, the mobile industry is complaining vociferously about the cost of rollout and has been targeting lawmakers and federal regulators to help bring it down. And in many cases, they have been obliging. In Texas, for example, the state passed a law that restricted the charge to $250 per year.

Reductions of that magnitude could save mobile companies billions of dollars a year, which the industry says will enable the installation of 5G technology at a far faster rate.

Special interests

That's not all that's happening. The Federal Communications Commission (FCC) is going all out to make 5G rollout as easy as possible, although its approach has led many to worry that it is acting more in the interests of the mobile companies than consumers.

One high-profile example has been the stacking of a key advisory committee, the Broadband Deployment Advisory Committee (BDAC), with mobile phone company reps and purposefully restricting the impact of local government officials.

FCC chair Ajit Pai clearly takes the mobile phone industry's view that local governments are getting in the way of 5G rollout – and, without explicitly saying it, milking the situation for all it is worth.

But the BDAC's recent recommendations have been criticized as simply ignoring the genuine concerns of local government officials, running roughshod over efforts to set up local networks, and in some cases breaking the law.

Another FCC Commissioner, Brendan Carr, recently proposed [PDF] excluding "small wireless facilities" i.e. 5G stations from "the environmental and historic review procedures that were designed for large, macrocell deployments."

Carr argued that the reviews weren't needed and removing them would "reduce the regulatory costs of small cell deployment by 80 per cent, cut deployment timelines in half, and expand 5G deployments."

That's a plausible argument but it ignores the fact that there are good reasons why such reviews are there in the first place and giving mobile phone companies a free hand to install equipment is a huge risk in itself.

Rules for ourselves

One thing the federal government can do with little blowback is set rules for federal facilities. And it has already done so, with President Trump signing an executive order designed to make it easier and faster for 5G stations to be installed on federal property.

Some of it is pure red-tape cutting: such as mandating that a single, universal application is created for mobile companies to apply to install their equipment; and requiring federal authorities to respond within a specific timeframe and give a clear reason for denying an application.

Those aspects have also been pulled into the Ray Baums Act that was passed by the House on Wednesday ("not later than 270 days after the date on which an executive agency receives a duly filed application for an easement, right-of-way, or lease under this subsection, the executive agency shall (i) grant or deny, on behalf of the Federal Government, the application; and (ii) notify the applicant of the grant or denial").

But while the federal government owns a lot of land, it doesn't have anywhere near the coverage that 5G needs, and so local government property is going to be critical to its rollout.

The inherent tension and frustration even led to the White House internally proposing that it effectively nationalize the mobile network and lease it out to companies: something that caused pretty much everyone to freak out.

Bigger picture

Why the concerted drive for 5G, to the point where the federal government is passing laws and picking fights?

Aside from the enormous potential economic benefit of nationwide 5G networks, and the massive profits that mobile phone companies can expect to realize, the bigger picture is that the 5G final standard itself is still under construction.

A number of companies – from China's Huawei to Sweden's Ericsson to South Korea's Samsung to Finland's Nokia to US's own Qualcomm – are all desperately trying to influence the standard before it gets locked down, with potentially enormous future benefits.

That is why the US government is unhappy about Singapore-based Broadcom's proposed $117 billion takeover of Qualcomm – it fears the acquisition could result in America losing its inside edge on the future of telecoms.

Those concerns even prompted Broadcom to promise it would earmark $1.5bn to "train and educate the next generation of engineers in the US 5G networks" if authorities allowed the buyout to go forward.

Aside from direct influence on standards, the biggest way of defining 5G globally is to be in the position of actually buying and installing equipment. And that can't happen if there are so many roadblocks that countries like China have fully fledged 5G in place while the US still argues about environmental impact studies.

The bill passed on Wednesday by the House of Representatives is just one stepping stone on that path to ensure that the US gets to play a role in the next generation of telecommunications while also trying to ensure that the US doesn't repeat the CDMA/GSM standard-split where the US went one direction and the rest of the world went another. ®