Trump admin accelerating 5G auctions, but US still lags behind other countries
The Trump administration is seeking to open up fresh airwaves to wireless firms, but the U.S. still lags behind other countries in releasing new frequencies amid a dispute over the auction of a critical spectrum for fifth-generation wireless technology.
Earlier this week, Federal Communications Commission Chairman Ajit Pai said the agency would vote in July to open up unused portions of the 2.5 gigahertz (GHz) band to accelerate the uptake of 5G, which promises broadband speed without a hardwired connection.
“At long last, we’re going to put more of this critical mid-band spectrum to work for the American people,” Pai said in a statement. “Making this valuable mid-band spectrum available for new mobile services will allow for more efficient and effective use of these airwaves and will advance U.S. leadership in 5G.”
While the announcement was welcomed by advocates, any subsequent auction is not expected until 2020. Meanwhile, past federal officials and industry analysts are warning that the U.S. government still needs to quicken the pace at which it plans to put new frequencies up for purchase.
“It’s terrible that we are wasting spectrum,” Thomas Hazlett, a former FCC chief economist and current professor at Clemson University, told FOX Business. “There are hundreds of billions of dollars being lost to the U.S. economy and consumers suffer from that, as well as U.S. innovation.”
Experts say the likely auction is expected to benefit Verizon and AT&T, which are both trying to beef up their stockpile of so-called mid-band spectrum.
Sprint already owns an ample amount of airwaves in an adjacent band and T-Mobile is hoping to obtain federal clearance for a merger with the Overland Park, Kansas-based firm.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| VZ | VERIZON COMMUNICATIONS INC. | 39.25 | -0.24 | -0.61% |
| TMUS | T-MOBILE US INC. | 164.05 | -0.13 | -0.08% |
| T | AT&T INC. | 16.59 | -0.23 | -1.34% |
| S | SENTINELONE INC | 21.20 | -0.37 | -1.72% |
Unlike higher frequencies, which can send a signal faster but are restricted to smaller distances, the lower frequency airwaves are able to transport a signal much farther, eliminating the need for additional towers or antennas.
To-date, the lack of available middle-range spectrum has not been an issue because the current rollout of 5G technology is restricted to major metropolitan areas like New York City and Chicago, where high-frequency airwaves work because of the dense nature of the infrastructure.
Expanding to less urban regions of the country, however, will require more mid-band spectrum.
“For most of the country, certainly the suburban and rural parts of the country, you are going to be reliant on something like this 2.5 GHz,” Hazlett said. “You can’t afford to put in the millions of base stations if you were trying to serve St. Louis or Wichita or any place in between. And that’s most of the population of the United States.”
The industry is pushing the Trump administration to open up the 3.5 GHz spectrum, largely viewed as critical in the rush to deploy 5G, but intragovernmental fighting between the FCC, the Pentagon and others is delaying the auction.
The airwaves are not expected to be put up for purchase until mid-2020 at the earliest, a timeline that is leading some FCC officials to speak out.
"The commission must make procedural changes to enable auctions to be held closer together, and ideally simultaneously," Commissioner Michael O'Rielly said in April. "We must be willing to adopt a plan that gets mid-band spectrum into providers' hands as soon as possible."
The Department of Defense, which is estimated to hold as much as 50 percent of the mid-band frequencies for radar, has historically been hesitant about releasing airwaves for public use.
CLICK HERE TO GET THE FOX BUSINESS APP
Despite the controversy, experts remain optimistic about the U.S.'s position as a leader in the global telecommunications industry, as well as the looming spectrum availability.
“We need all bands, all kinds for the varied applications and services that 5G will provide,” said Bret Swanson, president of technology research firm Entropy Economics LLC. “We’re in a very, very positive momentum.”