Economy & Business

Huawei Poses a 5G Threat, but Nationalization Is Not the Answer

Telecommunications workers install a new antenna system for AT&T’s 5G wireless network in downtown San Diego, Calif., April 23, 2019. (Mike Blake/Reuters)
It’s a mystery why free-market advocates are urging the Trump administration to establish a ‘wholesale regime’ for wireless service.

A friend of mine once told me a story about his father calling the phone company to set up a landline at their home in Milwaukee. A technician showed up the next day. This may seem like a mundane occurrence to most Americans, but it was nothing short of a miracle to my friend. He came to America from a country where it often took six months to get a phone installed.

My friend’s father explained the reason for the stark difference. See, in America the company responsible for installing the phone made money once it was in use — there was an incentive for the installation to be done quickly. In their native country, phone lines were the responsibility of the government, and so there was no incentive to move fast.

This is one of the things that makes America great. We encourage private-sector competition, which leads to better-quality choices and more-reasonable costs for consumers. Innovation and productivity play a big role in this process.

America’s wireless industry is a powerful example of how our nation’s free-market policies drive new, innovative technologies. For decades the U.S. has been a leader in wireless technology from 3G to 4G, and now with early deployments of 5G, the U.S. remains a dominant player. That is why it was encouraging to see President Trump this month put to rest the idea being pushed by some conservative advisers that the federal government should nationalize a 5G network.

While fears of Chinese dominance in technologies of the future are warranted, arguments being loosely thrown around that the U.S. is losing to China are largely unfounded. This year, the United States pushed past South Korea in 5G readiness and has moved up to first place alongside China. With all major U.S. wireless carriers having announced plans to make 5G services available as early as next year, the U.S. is well positioned to lead.

Businesses in the private sector are well on their way to helping the people of America obtain access to 5G technology, which promises to bring to remote areas wireless Internet speeds that are comparable to those of wired broadband. So why would anyone advocate for a nationalized system with a sole source provider?

It remains a mystery why free-market advocates were urging the Trump administration to establish a “wholesale regime” for wireless service. The theory appears to be that the current situation in the U.S. — lower prices and vigorous competition — is evidence of a “government-created oligopoly” that must be broken up.

But as President Trump noted, “in the United States, our approach is private-sector-driven and private-sector-led.” And for good reason. Does anyone really think the federal government can do something at a quicker pace and for less money than the private sector can? Not to mention, the government would be ten years behind and starting from scratch.

A nationalized approach to 5G deployment would be more expensive, take longer to build, involve more bureaucracy, and open up additional security vulnerabilities.

When it comes to addressing security threats posed by Chinese dominance of global 5G networks, a nationalized U.S. network is meaningless. The U.S. government can restrict network equipment from China in American and government networks without needing to create a government-owned or government-controlled 5G network. It is why both the chair and the vice chair (Republican and Democrat) of the Senate Intelligence Committee signed on to legislation prohibiting a nationalized system for advanced cellular technology. China’s laws by nature require companies and individuals to cooperate with their intelligence apparatus, thereby making companies such as equipment-maker Huawei an arm of the government. The United States should continue to work with allies to understand the very serious threat that Huawei is poised to become a monopoly provider of 5G equipment, which would wipe out choice and competition in future technology generations.

During his 2019 State of the Union address, President Trump spoke about the problems in Venezuela and clearly stated: “Here, in the United States, we are alarmed by new calls to adopt socialism in our country. America was founded on liberty and independence — not government coercion, domination, and control. We are born free, and we will stay free.”

Countless people, like my friend, have fled socialist countries to come to America. They are drawn to our country because of that simple promise: We are born free, and we will stay free. The debate over 5G is but one more reminder that we must remain vigilant to never become a socialist country.

As Ronald Reagan said, “government does nothing as well or as economically as the private sector of the economy.” The race to 5G will prove him right once again.

Scott Walker — Scott Walker was the 45th governor of Wisconsin and launched a bid for the 2016 Republican presidential nomination.


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