The FCC also proposed a $20 billion fund to expand broadband in rural America over the coming decade, connecting up to 4 million households and small businesses to high-speed Internet, Pai said. The “Rural Digital Opportunity Fund” could launch later this year, after a period of public notice and comment.
Speaking at the White House, Trump argued that the United States could not allow “any other country to outcompete the United States” in the race to 5G, and vowed that it is a race America would win.
“No matter where you are, you will have access very quickly to 5G, and it’s going to be a different life,” he said in remarks at the White House. “I don’t know if it’s going to be better — maybe you’re happy right now — but I’m going to say, technologically, it won’t even be close.”
The two proposals reflect the most intensive effort of the Trump era to close the so-called “digital divide” and gain an edge in the global race to build a fully functioning, nationwide 5G network. Proponents say the advances that 5G offers over 4G LTE will enable mobile download speeds of up to 1,000 megabits per second — roughly 100 times faster than the standard — and pave the way for new technologies such as self-driving cars and virtual reality.
Despite Pai’s focus on auctioning spectrum, his critics say his 5G strategy has overlooked or even caused setbacks in other areas of policy.
“So far this Administration’s interventions on 5G have done more harm than good,” Jessica Rosenworcel, a Democratic FCC commissioner, tweeted Friday. “From imposing tariffs on 5G equipment to alienating allies on 5G security to falling behind the rest of the world on critical mid-band spectrum, it has yet to offer a workable plan for US leadership.”
Friday’s announcement comes in the face of rising competition from China and other nations that are moving swiftly to develop 5G technology.
Whichever country succeeds at deploying 5G early and on a massive scale will reap dividends and shape the global economy for years, analysts say. A head start by the United States, for example, could allow American firms to gain a dominant footing in the burgeoning market for smart devices and the next-generation of digital services.
Last week, South Korea became the first country to switch on a nationwide 5G network as the country’s three wireless carriers announced the launch of their commercial service in 85 cities. In the United States, Verizon last week said it had begun offering its 5G service in parts of Chicago and Minneapolis.
The upcoming airwaves auction is not the first of the 5G era. Since November 2018, the FCC has sold off more than 1.5 GHz in spectrum licenses for 5G, according to agency figures. The high-frequency waves are considered ideal for 5G because they can carry a great deal of data very reliably, albeit at the cost of range and the ability to penetrate walls and other obstacles.
Of the three chunks of millimeter waves to be sold in the upcoming auction, two — located in the 37 GHz and 47 GHz bands — are unoccupied, according to the FCC. The remaining chunk, in the 39 GHz band, is already controlled in some portions by AT&T and Verizon. On Friday, the FCC kicked off its process for designing the auction protocols in its monthly meeting.
Despite the fanfare, little of the government’s announcement Friday came as a surprise, according to some industry analysts.
“From what we have seen, there is nothing particularly new or particularly interesting” in the reveal, said Jonathan Chaplin, an analyst at New Street Research, in a research note. The market had been expecting further spectrum auctions for some time, he added. But the Rural Digital Opportunity Fund, said Chaplin, could shift the balance of power among Internet providers in rural areas.
“The impact of the broadband deployment funding will depend on who gets it,” Chaplin said. “The funding will put one carrier in each of the targeted markets in a dominant competitive position.”
The $20 billion broadband initiative, Pai said, would be funded using “repurposed” money from within the Universal Service Fund, a federal aid program that indirectly supports a wide range of subsidies, including low-income phone service, lower-cost broadband access for schools and libraries and rural broadband deployment. Only one USF program would be affected by the new Rural Digital Opportunity Fund, the FCC said: Connect America Fund II, a broadband buildout program that last year held an auction to disburse $2 billion in infrastructure funding over 10 years. Money for the USF is raised by fees that carriers add to consumer phone bills.
“5G isn’t just about wireless,” Pai said of the need for more wired infrastructure, in remarks at the White House. “We’ll also need strong fiber networks to carry the 5G traffic once its gets from the air to the ground.”
Industry groups welcomed the twin announcements.
The Wireless Internet Service Providers Association "hails the intensified focus on bettering rural connectivity, which will help country farmers receive the same evolving level of broadband services and connectivity as city financiers,” said the Wireless Internet Service Providers Association, in a statement.
Millimeter waves are not the only kind of airwaves suitable for 5G. Carriers such as T-Mobile and Sprint have focused their 5G efforts on medium-frequency, or mid-band, airwaves, and have made it a centerpiece of their argument for a $26 billion merger. Mid-band spectrum offers less capacity than the higher-band alternatives, but can cover greater distances.
Pai said Friday that he is committed to making airwaves of all types a priority.
He was among a group of U.S. officials who, at an industry conference in February, pressured allies to stop using wireless networking gear from Chinese firms such as Huawei over fears that the equipment could enable Chinese eavesdropping. In the meetings, the Trump administration’s European partners largely acknowledged the risk but disagreed with the U.S. delegation on how to mitigate the threat.