View from Washington: Team Trump’s 5G plan gets an ‘F’

The leaked report may already be holed beneath the waterline but still gushes worrying signs for engineering policy.

The telecoms industry spent much of yesterday (January 29) digesting a leaked report from President Trump’s National Security Council on US 5G network deployment. Then it tumbled into paroxysms of laughter – some of bewilderment, some of fear.

The document’s core proposal is that the US government should fund and build a single, next-generation mobile comms network, and then lease capacity to operators. The main argument offered is that Washington will thus be able to shut out Chinese carrier hardware companies – predominantly Huawei but also ZTE.

Why? China, the report says, “has achieved a dominant position in the manufacture and operation of network infrastructure,” and is also “the dominant malicious actor in the information domain.”

There is evidence to support those statements. There are further grounds to claim that Huawei has, as the report later argues, secured global market share with suspiciously aggressive pricing, while China maintains major barriers of entry to foreign infrastructure suppliers domestically.

And yes, the race is already on to see which region will define 5G, arguably the most significant technological shift for mobile comms since GSM. China’s desire to win that race is a matter of public record.

The problem is that the report is profoundly ignorant.

One serious failing is that it attacks the challenge from entirely the wrong perspective. Fine talk about information superhighways aside, it defines 5G by protectionism (‘Let’s kick China’) rather than innovation (‘Let’s beat China’). As a result, it would impose a business model on the US comms market that leading players would not accept.

That it does as much is not surprising, given Trump’s earlier rhetoric towards the Middle Kingdom. From a policy point of view, the report also aligns with the administration’s recent blocks on two high-profile Chinese takeovers. It just rejected Jack Ma and his Ant Financial vehicle’s $1.2bn (£850m) bid for the MoneyGram payment network and, last September, Trump personally intervened to stop the $1.3bn acquisition of Lattice Semiconductor by a Chinese-backed venture capital fund.

Privacy and national security were the main reasons given, but there was a strong whiff of “US good, China bad” behind them.

Moreover, although former chief strategist Steve Bannon is being airbrushed from Trumpworld, it is fair to say that his view on China is still shared by current White House advisors. “We have an enemy of incalculable power and they’re not a strategic partner,” Bannon told Breitbart News last November. “They are an enemy and we have to understand that.”

But the 5G report exposes just how wrongheaded things get when policy is driven by so Manichean a creed, particularly in complex markets.

Apparently the leaked version has evolved to remove the suggestion that Washington pay for the network. The report now apparently proposes that the White House lead a grand coalition of operators and technology suppliers. But that dog won’t hunt either.

What’s the problem now? After all, such coalitions have worked in China, where the government has driven industries to consolidate and fostered cooperation among competitors.

Well, China can do that because (a) it is an authoritarian state and (b) many of the companies involved are either state-owned enterprises or have close links to Beijing. By contrast, the US telecoms market is made up of competing independent operators and they are developing 5G technology now anyway.

Why would the US companies surrender competitive advantage they may have already acquired by joining a network managed (even if no longer owned) by a state with zero experience in their industry?

Their suppliers too have reason to resist. On the critical RF infrastructure side, Huawei’s competitors are not US companies but Ericsson of Sweden and Nokia of Finland. They may have more of an eye on 5G’s progress in the EU, and their own ambitions in parts of the Chinese market for which they can actually bid. Would they go anywhere near so provocative a US project? Brussels might want a quiet word there.

And there’s more. Most egregiously, the report talks of a three-year deadline to complete the single network.

So, Trump is supposed to bang together a lot of corporate heads, get everyone to agree on a single and highly detailed 5G implementation, and then get the damn thing built mostly within his first term.

Yeah, good luck with that.

Most analysts believe construction alone will take five years at best and quite possibly a decade. And that assumes it will be done by a private sector that has huge historical experience in network roll-outs. Again, the federal government has virtually none. As for the latest scorecard on Trump’s deal-making, it is pitiful.

The good news is that the 5G plan will likely be binned and disowned by the administration before the weekend. Even allies have been dismissive. Ajit Pai, chair of the Federal Communications Commission, said, “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.”

Amen to that. But is the US really in the clear? Arguably not, because this 5G episode raises broader questions that should concern engineering going forward.

It underlines the administration’s aggression towards China. While there are legitimate security and commercial issues surrounding that relationship, is Trump tackling them in an effective way? Or an unnecessarily provocative and potentially internecine one? (And I originally wrote that last sentence without thinking about the words ‘North’ and ‘Korea’.)

Meanwhile in parallel, the episode shows that White House senior staff have scant idea of how today’s technology businesses function or how major engineering projects evolve in terms of both innovation and execution. That has been suspected for some time, but it is disturbing to see it so publicly exposed. And exposed moreover in mobile comms, one of the technology markets closest to Washington in terms of regulation and development.

Then finally, the report tends to point to a cyber-security strategy that is being developed piecemeal and on-the-hoof, rather than with the coherence and patient thought it requires. Somebody in government thinks that shutting out one box supplier is the biggest 5G problem ahead? Really?

An overall policy-making strategy that is dominated by a notion as facile as ABC – ‘Anyone but China’ – is not going to work for anyone, yet this 5G snafu strongly suggests the White House has taken that course.

Anyway, come back tomorrow for some thoughts on Trump’s State of the Union. Hopefully, I’ll manage more than the word ‘DAFT’ pasted in 800 times over.

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