An internal memo has found its way into the public domain unveiling White House plans to deploy a nationwide 5G network which would be paid for and built by the US government.
The idea here is simple; the government seemingly doesn’t believe the private sector is doing a good enough job in taking the US forward, so it is stepping in. 5G has been recognised as the catalyst for the next economic superpower, therefore the US must get there first.
Like Dwight Eisenhower’s efforts to build interstates or John Kennedy’s leadership in the space programme, President Donald Trump seems to believe the government has to step in. These are two examples where intervention was possibly necessary, but we think the idea of nationalising such communications infrastructure reeks of unnecessary government intervention which will only cause pain.
US companies have shown they can be immensely successful when there are profits to aim for. With the interstates and space programme, there was no obvious commercial gain for private companies so government funding and management was necessary. With 5G, the profits are there to be seen. The telcos will be better at building and monetizing these networks, so why should the cumbersome and lethargic public sector get involved. This could be a disaster.
The memo, which was first made public by Axios, outlines the mood of the government and it is basically as we all expected; China is out to get us. President Trump and his cronies seemingly believe nationalised communications infrastructure is critical in not only securing US’ position as an economic super-power, but also to make sure the sticky fingers of Chinese spies stay out of the US data vaults.
China is the main driver here, not only because it has an immense economy which only seems to be heading one direction, but because of the security threat. From the tone of the memo, the White House seems 100% convinced the Chinese state is spying on the US, while Huawei and ZTE are conscious assistants with nefarious ambitions. Of course the only option to save the American people from the Chinese is to nationalise 5G infrastructure.
The paranoia inside the White House should not come as a surprise, it has become a standard part of the script in recent months, but the inflated ego coming spilling out of the Oval Office even caught us off-guard a little. The memo indicates the belief that a nationwide network can be rolled out in three years. Despite the government not having a labour force, a domestic supply chain or a means to finance the network, 36 months is apparently enough time. The memo also highlights the need to standardize the rules and regulations in each of the states.
How the US government thinks it is will be able to tick all these boxes within three years is beyond us. Private companies would struggle to meet such a deadline for a truly nationwide network, and considering the stereotypical work ethic of the public sector, we are highly sceptical whether Trump can inspire the productivity boost. Surely there will be other areas which will be taking his attention, he has that wall to build on the south side of his garden after all.
Of course, the mentality of being the best and most qualified, despite evidence to the contrary, is a trait common among those who occupy political office, irrelevant of residence. What we find quite surprising is the naivety on display. Some might even say it goes beyond naivety; Absurdity? Ignorance? Stupidity? Why does the American government think it can convince private industry to put aside commercial ambitions in pursuit of the American dream?
Several ideas have been raised on how to finance such a network. One plan would be for the government to fund it exclusively, though another idea is to bind the carriers together in a consortium to build the network. While this sounds attractive, it would require the businesses to put aside their business models and profit ambitions, work with competitors to put the American people first. Sounds glorious, but it will never happen.
The two leading carriers in the US have been promising shareholders 5G will bring untold fortunes, the number four player desperately needs to make some money and the third-ranking player is owned by a German operator. Why does the government think it is able to convince these companies they should forgo profits in the interest of the American people. Naivety House house or outright moronic beliefs? We’ll leave that up to you.
This is of course the first murmurs of such a radical plan, and there will be backlash. Such a disruptive change to the industry will be met with considerable friction from the ecosystem, and there will be numerous commentators questioning whether this is a sensible way for the government to spend billions of the hard earned tax payers dollars.
Governments have shown on numerous occasions they are happy to stubbornly follow an agenda because of paranoia, egos or naivety. We certainly hope this more does not backfire, but we are not that confident.