The United States and China are in an arms race. Not the familiar military-strength arms race from years past, but still an arms race that will have a profound impact on the two superpowers in the foreseeable future. The Chinese government is throwing its full authority and considerable resources at developing the coveted 5G wireless technology of tomorrow. The Chinese want desperately to win the global competition to build a new 5G network first so China can dominate its rivals for many years to come.
But having the government lead the way is the wrong approach. Market-based innovations and private-sector investment helped U.S. companies win the race to 4G, and history will repeat itself if our politicians in the U.S. have enough common sense to keep government out of the way and let the American private sector provide consumers and businesses with 5G.
5G is fifth-generation wireless — the quantum leap forward in wireless technology that will support telemedicine, autonomous vehicles, the Internet of Things (IoT) and countless other positive changes in our homes, schools, businesses and public spaces. It’s estimated that there will be 12.3 billion mobile-connected IoT devices by 2020.
To make sure all of those devices work together and we take full advantage of all that this technology has to offer, we must deploy a widespread 5G network. To make sure the United States beats China and every other competitor in this race to the future, we must keep the federal government out of the way and allow the private sector to charge ahead unimpeded.
There’s a lot at stake, certainly for things like national security, public health and safety, but particularly for the U.S. economy. Building out 5G networks could spur $275 billion in private-sector technology investments, create 3 million new jobs and add about half a trillion dollars to U.S. GDP. In Wisconsin, 5G investments would total over $4.5 billion, generating a $9 billion spinoff effect on the state economy over seven years. More than 7,500 new jobs would be added, giving workers the opportunity to earn almost $2.7 billion in wages.
And all of those benefits would come without spending a single dollar of taxpayers’ money. It is all private investment.
Recently, some in Washington have called for a “national” 5G network, enabled and managed by the federal government. Nationalizing 5G would be a mistake of epic proportions. We won’t win the race to 5G by putting bureaucrats in charge of our wireless innovation and having taxpayers pick up the tab.
The federal government needs to stay out of the way and let the American free-market system do its job.
The wireless industry’s deployment of 4G gave us a nearly $100 billion bump in annual GDP and brought in $125 billion in revenue for American employers that otherwise could have gone to other countries. It also fostered the booming app economy, now worth an estimated $950 billion. In European countries that let government take the lead in 4G development, network investments were half as much as they were here.
With the U.S. national debt skyrocketing over $22 trillion, it would be foolish to take 5G out of the hands of wireless industry experts who will not only do a better job of building out 5G networks, but also do it at no cost to taxpayers — a win for the U.S. consumer and the taxpayer.
Government can still play a less intrusive, yet productive role in deploying 5G. Government officials at all levels can work to cut the red tape that slows wireless infrastructure deployment. At the federal level, the Federal Communications Commission has been a leader in streamlining regulations and doing everything it can to make it more efficient to deploy the infrastructure that will deliver 5G to our communities.
We can win this arms race with China. But only if President Trump and his administration ignore the misguided calls for a government-controlled national 5G network. Then, and only then, will American ingenuity and innovation lead the United States to win this all-important technology war of tomorrow — again.
Brett Healy is president of The John K. MacIver Institute for Public Policy.
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