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A state-run 5G network is impossible in the US

The FCC is too weak, and the carriers have too big of a head start.

Eric Gaillard / Reuters

Axios recently reported that it had discovered a document that revealed something very interesting: The Trump administration was considering a government-run 5G network. According to the memo, this was in order to fight China's upcoming dominance in the wireless 5G space, and would ensure a safe network for self-driving cars, AI, VR and other cutting-edge technologies.

This kind of state-run network is completely antithetical to the administration's public stance on deregulation and privatization. It even prompted FCC Chairman Ajit Pai to come down strongly in opposition. It turns out, however, that the document was outdated, and the Trump administration strongly denies it ever seriously considered such a proposal.

Which is great news for fans of deregulation of course, but there was no reason for them to worry in the first place: Because it never could have happened anyway. In fact, there are countless reasons why a government-run 5G network would never fly in the US, especially under the current administration.

For one thing, most millimeter wave bands that were approved under the recently published 5G spec have already been licensed out. The 28, 38 and 60 GHz bands are largely split between the big four carriers -- Verizon, AT&T, Sprint and T-Mobile -- and a few smaller outfits. With the sale of FiberTower to AT&T and Straight Path to Verizon, the two biggest carriers will eventually own the majority of the country's licensed millimeter-wave spectrum, which is a valuable 5G resource. And Verizon already owns enough 5G spectrum to cover the entire country.

What's more, these carriers have already been busy laying the groundwork necessary to build out their 5G networks. AT&T hopes to launch spec-based mobile 5G to 12 cities in late 2018, Verizon has already been testing home-based 5G ahead of a 2018 launch, Sprint has committed to a 5G network in 2019, while T-Mobile will finally catch up in 2020.

While the carriers already have the hardware foundation to make their 5G dreams happen, the government would have to build everything from scratch. According to the document that was leaked to Axios, the National Security Council staff member did consider an alternative plan whereby wireless providers would compete to build the centralized nationwide network. But ultimately, it leaned toward a government-run and paid-for operation where it would pay for and build its own infrastructure. Needless to say, this would be an enormous undertaking that would take a great deal of money and time. The memo suggested that the government could do this in three years, which is highly unrealistic.

Plus, the companies have already spent a lot of time and money planning their 5G rollout, and it's unlikely the government will be able to simply revoke band access without a fight. Plus, under the current law, the FCC isn't authorized to go about revoking licenses without due cause, and not just in the arena of 5G spectrum. When president Trump threatened to revoke TV networks of their broadcast license, Pai said, "Under the law, the FCC does not have the authority to revoke a license of a broadcast station based on the content of a particular newscast." Further, the Supreme Court has in the past banned the FCC from revoking broadband licenses, even in the case of bankruptcy.

On top of that, if the FCC were to go ahead and attempt to claw back spectrum, the carriers would probably sue the government, thus stalling the entire project in tedious court proceedings. By the time the lawsuits would be resolved, it's highly likely that the carriers would have already deployed their 5G networks. It's possible that the government could try to free up airwaves in a different part of the spectrum to use itself, but again, that would take considerable time and effort. Even if the government comes up with a plan that's more realistic, it's unclear if Congress would support it.

The FCC under the chairmanship of Pai has shown no interest in exerting any kind of power over the telecom industry. As the decision to repeal net neutrality rules shows, the FCC is actually trying to shed regulatory power and weaken its authority. If the government were to take on the role of a state-run wireless network of any kind, a strong FCC would be necessary. And a strong FCC this is not.