Economic Competitiveness and National Security Dynamics in the Race for 5G between the United States and China
30 Pages Posted: 19 Mar 2018 Last revised: 17 Aug 2018
Date Written: August 2018
This paper analyzes the economic competitiveness and national security dynamics around the United States, China, and 5G wireless technologies. The paper explores economic competitiveness through 5G technology itself, intellectual property rights, influence within standards setting organizations, spectrum policy, deployment timelines, and surrounding innovation ecosystem. It also proposes institutional arrangements for evaluating security risks of Chinese telecommunications equipment entering the U.S. market. Next generation connectivity, 5th Generation (5G) in particular, represent a tremendous economic opportunity. Deploying 5G at scale, and seeing it leveraged for productivity gains throughout the economy, should be a national imperative. There are several technological components to 5G, but the key architectural shift requires far more cell sites, meaning an expensive infrastructure deployment and justifying a rethinking of local permitting policies and federal regulations. The Chinese are extending their influence in standards organizations and international bodies like the International Telecommunications Union (ITU). They are also engaged in intensive research and development, and already making key contributions to essential 5G patents. While they may not be the first to use 5G, many expect they will aggressively deploy a final 5G specification at tremendous scale. When it comes to national competitiveness, successful and early deployment and use of 5G technology is critical. The U.S. government should focus first on improving the investment conditions for deploying 5G through reforms to siting and permitting policies and make more spectrum available on a flexible licensed, unlicensed, and shared basis. The United States should continue to rely on its competitive private sector to deploy 5G networks and not consider a government-built network. Furthermore, any policy focused on specific Chinese firms must be considered as a component of a broader, nuanced strategy to return to a rule-of-law, market-driven expectation on trade and protection of intellectual property. Presumptive blocking of equipment from specific firms without explanation and evidence is likely not the best route to navigate a contentious trade environment. Instead, the United States should establish a body to analyze potential security threats in coordination with like-minded allies.
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