Trump administration wants to nationalize 5G, but the FCC is not impressed

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White House national security officials recently floated a plan in which the government would pay to build a next-generation 5G network and rent access to wireless carriers, according to a report over the weekend. But a report published over the weekend by Axios indicates that the Trump administration is preparing a proposal that would nationalize the 5G network.

"ZTE's 7% correction and similar drop in other 5G-related Chinese shares seemed to be related to Trump's plan to build a government-owned 5G network in the United States", said Edison Lee, a Jefferies analyst in a report.

Accenture, a leading technology outsourcing company, has estimated that wireless operators will invest as much as $275 billion in the United States over seven years as they build out 5G networks.

An unnamed senior White House official said that the government wants to build a network so calls can not be listened to by the Chinese.

Shares of the biggest US wireless carriers fell at the start of trade on Monday, with Verizon and AT&T down 1 percent.

Pai's Democratic colleague on the FCC, Mignon Clyburn, agreed, saying a network built by the federal government "does not leverage the best approach needed for our nation to win the 5G race".

The reasoning behind building such a network as part of a sort of cyber war is to construct a secure network dedicated to Internet traffic for new, more sensitive technologies, such as self-driving vehicles and virtual reality.

Citing the documents, Axios reported that America needs a centralized nationwide 5G network within three years and there are two options for consideration.

"Instead, U.S. commercial wireless companies are the envy of the world and are already rushing ahead to lead in 5G", O'Rielly said. The second option is knocked as being more expensive and slower.

Instead of creating a nationalized network, Height said the FCC will likely work more closely with private carriers to impose stronger industrywide security standards. The proposal also goes against numerous principles laid out by the current FCC chair, Ajit Pai, who has been a vigorous advocate of a "light-touch" approach to networks where the federal government backs off from subsidizing and regulating internet service providers.

The senior administration official told USA TODAY that the reported memo is an old one, but its stated strategy is correct. There'll be a fierce debate inside the Trump administration - and an outcry from the industry - over the next 6-8 months over how such a network is built and paid for.

A US -built 5G network could in theory be more resilient to Chinese government intrusions. As Axios notes, the wireless industry is already deploying 5G networks to customers.

Federal Communications Commission Chairman Ajit Pai, a Republican, said in a statement Monday that the federal government should not build and operate a nationwide 5G network. Recently, the USA government helped squash a deal between Huawei and AT&T that would have seen the carrier offer one of the Chinese tech company's phones. The national network would be a way for the federal government to steer contracts to preferred providers and to nurture a network-equipment market that is free of Chinese influence.

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