5G Hype vs. Reality: How Policymakers Can Harness Its Benefits
For some, 5G is a miracle network that will bring the internet’s speed, abundance, and possibility out of our pockets and throughout our physical world. For others, it’s the next national security battleground, the winner of which will be the world’s hegemonic superpower. For most, it’s probably just an ill-defined tech buzzword echoing out of podcasts, banner ads, or business headlines. All three of these associations may ring true.

From these disparate and dramatic images, it can be difficult to assemble a concrete reality. What, exactly, 5G? And what does it mean for economies, societies, governments, and nations? A new briefing from the Berkeley Roundtable on the International Economy (BRIE) in support of CITRIS’ Work in the Age of Intelligent Tools and Systems (WITS) Initiative starts to fill in some of the blanks in common 5G understanding and ground its most significant issues. While 5G will be costly to build and could magnify existing unresolved cybersecurity threats, it could increase productivity across economic sectors and open up a more competitive landscape in the technology industry.

As seen in many telecom industry reports, the “fifth generation” of network technology promises to deliver incredibly fast speed and response times, enabling an untold number of futuristic applications from autonomous vehicles to smart manufacturing and remote medicine. But building a network that can support these applications is tricky; equipment broadcasting at sufficiently high frequencies needs to be placed every few hundred meters, which makes for a complicated, prolonged, and hugely expensive infrastructure project. Initial service offerings labelled “5G” are being installed on 4G towers and use frequencies that, while higher than 4G, are too low to support significantly increased speed and response times; they can allow for more consistent high-speed broadband capacity, but don’t have the coverage to support the pervasive fog of internet-connected devices that 5G enthusiasts envision.

Meanwhile, even the more powerful 5G-powered applications are not projected to generate significant new revenue for network providers ; this limits the return operators like AT&T and Verizon would likely see on their expensive investment in a dense, high-frequency network. Given this, these operators are unlikely to make the investment in establishing a dense high-speed network on their own. They could make the investment more manageable by sharing costs with each other, or with Google, Amazon, and other application providers who stand to benefit handsomely from fully-enveloping 5G coverage. But there’s no clear indication that operators have the inclination or wherewithal for either.

This leaves governments with a dilemma: how critical is 5G to the national interest, and how far should they go in pursuit of it? One could argue that applications enabled by 5G will unleash significant, cross-sector productivity gains. Moreover, 5G could be the active ingredient in the evolution of the technology industry; the first 5G nation could be the one to develop the next generation of platforms and tools that dominate the global economy. Perhaps in service of this theory, China has been active in facilitating cooperation and cost sharing among network operators, manufacturers, and application providers. Encouraging or enabling such collaboration is one relatively low-risk way for policymakers to help make 5G a reality.

Other options for governments promoting 5G include becoming a major user of the network or directly subsidizing its construction . But lack of a powerful network is not the only factor holding back deployment of the 5G technologies that could supercharge productivity; there are many reasons other than lack of network speed and stability preventing the deployment of 5G-enabled applications such as autonomous vehicles, massive IoT, and bioelectronic medical implants. If the technologies meant to use 5G lag behind the network itself, government-sponsored 5G might get little use, with little economic benefit. Seen from this perspective, 5G is a risky bet. The US government clearly wants 5G to be deployed as quickly as possible, as shown by their recent decision to auction off a section of mid band spectrum within the next year . But while selling spectrum and waiting for operators to broadcast over it might not be enough to spur construction, more active policies may not come to their intended fruition. Policymakers need to weigh these considerations carefully.

Policymakers also need to consider how 5G could expand and magnify the internet’s challenges to every dimension of security. On this subject, the possibility that China’s government may be pressuring Huawei to place vulnerabilities in its increasingly-ubiquitous network equipment to facilitate political espionage has gotten the most attention. However, it’s the unintentional gaps in the security of Huawei devices that deserve more scrutiny; they draw notice to how a dense 5G network of mobile broadcast sites and a far denser jungle of devices will give bad actors millions of potentially vulnerable entry points into governments, businesses, and personal lives through which to steal and manipulate.

Finally, 5G could also unsettle or even tip over the established fortresses of the digital world. For the last ten years, Google, Microsoft, and Amazon have leveraged cloud computing to shape the internet to their liking. But 5G could very well dim the power of massive datacenters and spark a multiplication of computing and storage out to base stations or remote devices themselves. If this happens, new players, whether network operators or unheard-of upstarts, could could control network infrastructure, and capture more value in the next phase in digital evolution. This possibility reinforces another idea that policymakers should bear in mind: the competitive landscape of technology firms is not fixed, and those that appear dominant today may be vulnerable to disruption tomorrow.

5G may never live up to its hype, but the questions it inspires and informs are profound. With 5G’s economic potential, policymakers could at least explore ways of fostering collaboration among network operators to get the network built, while closely monitoring the development of 5G-dependent technologies to see if more direct action might be fruitful. Policymakers could further prepare for 5G by incorporating it into the design of cybersecurity standards; simply ripping out Chinese telecom equipment, as the FCC last week effectively enjoined US companies to do , is not nearly enough to guarantee security in a 5G world. Finally, policymakers could also consider 5G when making assessments of the competitive landscape in the technology industry. Overall, understanding the pitfalls and possibilities of 5G will be critical for policymakers and other leaders as they seek to shape technology’s ongoing evolution for the benefit of all.

This work was funded in part by the Ewing Marion Kauffman Foundation and led by the Berkeley Roundtable on the International Economy (BRIE) Work and Intelligent Tools and Systems (WITS) Program at UC Berkeley, with support from the CITRIS Policy Lab
['Citris Policy Lab']
['Policy', 'Telecommunication', 'Internet of Things', '5g', 'Technology']