The administration’s lack of 5G expertise has led to unforced errors.
The administration has no real in-house leadership on 5G deployment.
S ir Alec Issigonis, who designed the original Mini car, famously said that “a camel is a horse designed by a committee.” The Car of the Century organization named the Mini the second most influential car of the 20th century. Why? According to Issigonis, it is due to the fact that a committee did not get in the way of his practical, yet elegant, design.
Sadly, we can’t say the same thing for 5G. Different parts of the Biden administration have been trying to undo, rewrite, or even sabotage policies from the previous administration that had the proven effect of promoting 5G and broadband at large. Feeling more political pressure from Congress, the Biden administration has started to put together a hodgepodge of policies that seek to increase 5G but, instead, have the opposite effect.
The problem? The Biden administration has no real in-house leadership on 5G deployment. For one, it took until the second year of his presidency for Biden to appoint an administrator for the National Telecommunications and Information Administration — the office that sets the administration’s position on 5G. The president has also failed to fill several key positions at the State Department and within the White House’s Office of Science and Technology Policy (OSTP) that are supposed to advise him on these issues. These positions are critical because they help the president promote 5G domestically and set the U.S.’s agenda internationally.
Thankfully for the president (and the public at large), the Federal Communications Commission (FCC) — an independent agency — has been moving along rather well despite its being down one commissioner. However, without telecom expertise in the White House, the FCC’s efforts have been and still are severely stunted, particularly when opening up more spectrum bands — the invisible real estate that allows mobile devices to work — for 5G use.
Without these positions filled, the Department of Transportation has gone rogue by forcing carriers to slow down their rollout of 5G, because of a bogus claim that 5G services would interfere with airplanes’ altimeters. Secretary of Transportation Pete Buttigieg continues to ask carriers to delay 5G based on these false claims.
The Biden administration’s lack of 5G expertise has led to unforced errors. Most notably, his Build Back Better Act’s 15 percent corporate minimum tax on book income would have increased the tax liability on telecommunications companies. That’s because spectrum purchases aren’t deductible from a company’s book income, so the money already spent on spectrum would be subject to taxation. Not only do civil-rights activists hate the notion because it will adversely affect 5G build-outs for minorities in low-income areas, but such a tax is a surefire way to chill investment in the space.
The president clearly intended this tax to be a revenue generator, but it would have the opposite effect. This tax would decrease participation and revenue from future spectrum auctions, and Congress uses those auctions as pay-fors. All of this for an industry that has weathered inflation better than most. In fact, not only did entry-level broadband prices go down by 9.1 percent in 2021, we are seeing more investment in 5G infrastructure.
If Biden wants to turn this 5G ship around, there are tried-and-true ways to do so. First, the administration should fill its vacant positions. Doing so could help the president organize the government’s position to avoid situations where one part of the executive branch, such as the DOT as described above, steps out of line and hinders 5G development.
Second, the president should make a push for Congress to extend the FCC’s auction authority with clear guidance on a spectrum pipeline that carriers can use for 5G. Unfortunately, Congress has been dragging its feet to reauthorize the FCC’s authority to auction spectrum, which will expire on September 30 of this year. Without such authority, the FCC’s releasing more spectrum by the end of this year will be next to impossible. Worse, the FCC may have to put all currently slated auctions, which would open up much-needed mid-band spectrum, on hold. Based on previous results from spectrum auctions, this measure can serve as a revenue generator for the government more than any tax can. Most important, auctions can help carriers to expedite 5G deployment.
Lastly, the president should make it clear to all other executive-branch agencies that the FCC has the final word on all commercial-spectrum issues so long as it has gone through the interagency process facilitated by the National Telecommunications and Information Administration. Doing so would keep unnecessary cooks out of the kitchen when the FCC auctions spectrum to carriers. This measure will also provide more stability and predictability for carriers deploying 5G by not having them worry about other agencies interfering with their deployments.
The Biden administration’s 5G policy is a camel where a horse is needed. The president needs to stop letting this policy area get tangled in administrative-state messes and treat it with the seriousness it requires so that America doesn’t fall behind on this crucial technology.