The U.S. National Security Council (NSC), a federal agency, is recommending that the U.S. government establish its own 5G network, in order to guard against potential cyber attacks and spying by China. A memo drafted by a senior NSC official, obtained by news organizations, states that the government should create such a network within the next three years, and pay for it by itself. Another option suggested in the memo would be for the country’s major MNOs to operate as a consortium to build the network themselves, in accordance with the government’s proposed enhanced security standards.

The memo explains that the reason for such initiatives is that “China has achieved a dominant position in the manufacture and operation of network infrastructure” and is also “the dominant malicious actor in the Information Domain.” According to reports, the Trump administration was considering endorsing the NSC’s recommendation, but in response to reports about the memo, the chairman of the Federal Communications Commission (FCC), Ajit Pai, who is a Trump appointee, condemned the idea, as did USTelecom, a trade group representing mobile and fixed network operators.

Pai told the New York Times, “The market, not the government, is best positioned to drive innovation and investment. Any federal effort to construct a nationalized 5G network would be a costly and counterproductive distraction from the policies we need to help the United States win the 5G future. Jonathan Spalter, CEO of USTelecom, said, “There is nothing that would slam the brakes more quickly on our hard-won momentum to be leader in the global race for 5G network deployment.”

Tarifica’s Take

It seems that the NSC’s proposal has been met with extreme displeasure from both sides of the telecom equation—from regulators and operators alike. That alone would seem to make its chances of going forward quite slim. Nonetheless, the issues raised shed some light on the potential conflict between two sets of priorities, both of which are taken seriously by almost all actors involved.

On the one hand, there is a real need for increased security against cyber attacks and spying that could disrupt business, governmental and even military operations. As the United States moves toward the next generation of super-high-speed broadband, vulnerabilities in this regard will inevitably be more costly and damaging than before. So the incentive is there to prioritize security and to achieve the needed uniformity as well as the high standards by imposing a fiat solution.

One the other hand, the idea of nationalizing anything is fundamentally alien to U.S. political culture. The belief that the private sector is best at innovation and that government is inefficient is held on both sides of the ideological divide, although it is more deeply ingrained among Republicans. So it is not surprising that Pai, while a regulator, takes the side of the mobile industry on this particular question—as it was also not surprising that he did not support net neutrality.

So it seems extremely unlikely that a nationalized 5G network will ever be launched in the United States. And South Korea currently seems to be a likelier candidate than the United States to become the “leader in the global race for 5G network deployment.” Of course it is not possible for us to assess the true level of threat to the U.S. mobile infrastructure, now or in the near future, from China. Nonetheless, the current flap concerning 5G at least illuminates the degree to which the priorities of cybersecurity and market freedom could come into conflict. And it also points to the necessity for the major MNOs in the United States to work together to create high-quality 5G networks and integrate them in a way that maximizes security.