Financing 5G Rollout in the Face of Nation State Security Threats and Non-Market Subsidies: Policy Options for States to Address Cost Concerns

12 Pages Posted: 8 Mar 2020

Date Written: February 13, 2020

Abstract

The debate about non-market authoritarian telecom manufacturing firms subsidization and security risk continues to rage but there has been almost no talk about the benefits they provide and how to counter them by open liberal democracies. In this paper, provide a simple financial model of the range of cost differences between market and non-market telecom manufacturers. I then provide different policy options for states of how best to address these concerns. Pleas to national security and alliances will only go so far given the large subsidized cost differentials between market and non-market providers. There are numerous reasonable policy options that will narrow the cost differentials such as moving from cash spectrum auction to royalty, funding risk mitigation with tax on high risk gear, and multilateral lending currently disallowed by the OECD to fund critical infrastructure. Importantly, global 5G financing could be provided by the United States for less than $5 billion capital allocation.

Keywords: 5G, infrastructure financing

JEL Classification: L63, L78

Suggested Citation

Balding, Christopher, Financing 5G Rollout in the Face of Nation State Security Threats and Non-Market Subsidies: Policy Options for States to Address Cost Concerns (February 13, 2020). Available at SSRN: https://ssrn.com/abstract=3537463 or http://dx.doi.org/10.2139/ssrn.3537463

Christopher Balding (Contact Author)

Fulbright University Vietnam ( email )

Vietnam

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