Cellphone Carriers Lobby Against Pentagon Plan for National 5G Network
October 09 2020 - 3:49PM
Dow Jones News
By Drew FitzGerald
Two federal agencies are moving forward with conflicting plans
to commercialize a valuable chunk of wireless spectrum controlled
by the Defense Department, leaving the future of an asset worth
tens of billions of dollars in doubt.
The Pentagon is drafting a request for proposals for a new
fifth-generation military cellular network that would lease its
extra capacity to private-sector users like cellphone carriers,
auto makers and factories, according to people familiar with the
plan. This RFP includes more specific requirements than a separate
request for information released last month and could go public
before the Nov. 3 election, the people said.
At the same time, the Federal Communications Commission, the
independent agency in charge of licensing airwaves to the private
sector, is pursuing a plan to auction some of the same
Pentagon-controlled band late next year.
The military currently uses the spectrum for radar and aviation,
but the same frequencies are ideal for the ultrafast 5G signals
commercial operators are working to deploy.
The dueling proposals have prompted an energetic response from
the telecommunications industry. Telecom industry experts say the
more aggressive Pentagon proposals could threaten the value of
other cellular licenses that companies such as AT&T Inc. and
Verizon Communications Inc. paid tens of billions of dollars to
amass.
AT&T Chief Executive John Stankey visited the White House on
Sept. 30 to argue against proposals that might skirt the regular
auction process, according to people familiar with the visit.
"As America's largest infrastructure investor, it was another
opportunity for us to visit with policy makers about key topics
like 5G, spectrum policy and how the government can help foster
expansion of internet access and affordability," AT&T said in a
statement. "Competing with China on 5G is about more than just
spectrum, it requires considerable investment in fiber broadband
and smart regulation."
Spokespeople for the White House and Department of Defense
didn't immediately comment on Friday.
Some members of Congress have closed ranks behind the FCC's
traditional spectrum plan. A bipartisan group of senators and
representatives on Wednesday sponsored legislation that would order
the federal government to begin an auction before 2022. The bills,
both called the Beat China for 5G Act of 2020, are still at the
committee level.
In September, a group of lawmakers including Sen. John Thune
(R-S.D.) wrote President Trump to argue against the Pentagon's
request, saying it "contradicts the successful free-market strategy
you have embraced for 5G."
Rep. Frank Pallone (D., N.J.), chairman of the House Energy and
Commerce Committee, on Friday wrote the Commerce Department's
telecom administration office seeking information on federal
policies the lawmaker called "incoherent and erratic."
The Defense Department "clearly doesn't have the authority to
end auction-focused spectrum policies for the nation, let alone act
unilaterally towards that goal," Mr. Pallone wrote. The letter also
raised concerns about media reports of political operatives close
to the president working outside normal channels to promote a
"seismic shift in spectrum policy."
The federal government uses wireless licenses to make sure
things ranging from airplane radar to mobile phones don't emit
signals that interfere with each other. The FCC granted licenses to
television and radio stations free of charge until the late 20th
century, when cellphone carriers' explosive growth allowed the
government to auction new licenses and steer the proceeds to the
U.S. Treasury.
Companies including Google owner Alphabet Inc. have argued that
new technology allows the latest smartphones to share the airwaves
with other devices, reducing the need for expensive licenses. The
FCC has also turned over more frequencies for Wi-Fi and other uses
that don't require a license, but the commission retained ultimate
authority over the process.
Craig Moffett, an analyst for telecom and media research firm
MoffettNathanson LLC, said the dispute illustrates a chaotic
policy-making process that has left telecom companies unsure of
where they stand.
"We constantly field questions about how the country's telecom
policy might change under a Biden presidency," Mr. Moffett wrote in
a note to clients. "The focus on what might change, however,
seemingly ignores the utter incoherence of the status quo."
Write to Drew FitzGerald at andrew.fitzgerald@wsj.com
(END) Dow Jones Newswires
October 09, 2020 15:34 ET (19:34 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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