Wednesday, April 18, 2018

U.S. Leadership Must Continue in 5G Wireless Deployment

This week two reports were published that show why the United States’ leadership in 5G wireless deployment will be vital for the U.S. and global economies. The first report by Recon Analytics is titled “How America’s 4G Leadership Propelled the U.S. Economy,” and it emphasizes the sizeable economic benefits generated by the United States’ leadership in 4G wireless deployment.
The second report by Analytics Mason is titled “Global Race to 5G – Spectrum and Infrastructure Plans and Priorities,” and it finds that the United States has fallen narrowly behind China and South Korea in terms of 5G readiness.
These two reports show why U.S. leadership in 5G deployment is important for global trade and address how additional licensed spectrum and smart infrastructure policies will help advance U.S. 5G leadership.
Here are some of the key findings from the Recon Analytics report regarding the economic benefits that resulted from America’s 4G wireless leadership:
  • U.S. leadership in 4G accounted for nearly $100 billion of the increase in annual GDP by 2016 as the trajectory of the wireless industry’s contribution to U.S. GDP shifted from a projected $350.3 billion in 2016 to a realized $445 billion.
  • The launch of 4G in the U.S. increased total wireless-related jobs by 84% from 2011 to 2014.
  • U.S. 4G leadership also meant roughly $125 billion in revenue to American companies that could have gone elsewhere if the U.S. hadn’t seized 4G leadership. U.S. 4G leadership also resulted in more than $40 billion in additional app store revenue flowing to U.S. companies and app developers.

The second report by Analytics Mason measures countries by their 5G “readiness,” which takes into account the amount and timeline of 5G spectrum availability, policies aimed at easing 5G infrastructure deployment, industry network and equipment trials, and industry commitment to 5G deployment. The report finds that the United States is third in 5G readiness behind China and South Korea and just ahead of Japan, the U.K., and Germany.
It is important that U.S. policymakers continue to promote policies that would enable the U.S. to lead the world in 5G readiness because the quicker 5G is deployed, the quicker U.S. consumers will experience the economic benefits of 5G - including improvements to healthcare, transportation, law enforcement, e-commerce, and education. Although 4G brought significant economic benefits, 5G, with at least ten times faster speeds than 4G, is projected to create $275 billion in investment, 3 million jobs, and $500 billion in additional economic activity.
As Free State Foundation President Randolph May wrote in a blog earlier this week, the “race to 5G” is not a zero-sum game. Americans benefit when other countries deploy next-generation wireless infrastructure in an efficient and timely manner. When more countries are connected, it increases the prospect of additional global communications and trade. But because the U.S. was a leader in 4G, it should continue to be leader in 5G not only to bring economic benefits to Americans, but also to encourage other countries to upgrade their wireless networks to 5G. At the global level, 5G is projected to create $12.3 trillion in economic activity in 2035 and support 22 million jobs worldwide.
As I discussed in a recent Perspectives from FSF Scholars, the FCC has adopted a handful of pro-consumer spectrum initiatives over the last year that will assign and allocate licensed spectrum for commercial use. Most recently, the FCC voted to adopt a proposal on spectrum frontiers auctions “to promote the development of 5G wireless.” Moreover, the adoption of Commissioner Brendan Carr’s March 2018 proposal to reduce regulatory burdens and costs will create an estimated additional $1.5 billion in 5G investment.
The FCC should continue to assign and allocate more licensed spectrum and reduce regulatory barriers that stifle 5G deployment in order for the United States to remain a leader in the 5G revolution. U.S. leadership in 5G deployment will create billions of dollars in economic benefits for Americans and also will encourage other countries to upgrade their wireless networks, increasing the prospect of additional global trade.