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Trump team mulls nationalized 5G network to counter China

The idea is that a centralized network could protect US communications from Chinese spying. But it might prove a hard sell.

US-IRELAND-POLITICS

The Trump administration is worried about China spying on US phone networks.

Nicholas Kamm / AFP / Getty Images

National security officials working for President Donald Trump are considering building a superfast 5G network as an option to counter Chinese spying on US phones, according to a report published Sunday.

Details of the plans come courtesy of a PowerPoint presentation and memo produced by a senior National Security Council official seen and reported by Axios. An unnamed senior administration official confirmed the accuracy of the information late Sunday to Reuters. The Trump administration told Recode that it has no plans to build a network. 

A nationalized 5G network is currently under discussion at a low level in the Trump administration and won't be considered by the president for six to eight months, according to Axios. The network would be designed to counter Chinese threats to US economic and internet security, with emphasis on protecting emerging technologies reliant on 5G, such as self-driving cars and the internet of things. 

Such a network could be built and owned by the government, with infrastructure rented out to US carriers. This would be a significant departure from the current system, in which network providers build their own infrastructure and lease airwaves from the government. (For more on the feasibility of the proposal, see "Trump's crazy 5G plan actually 'diagnoses a real problem'.")

The telecommunications industry has already been busy getting ready for a future built on 5G, the next-generation wireless technology that promises significantly better speed and coverage than current 4G networks.

While widespread implementation is likely still several years off, Verizon, the largest carrier in the US by number of subscribers, expects to begin commercial 5G operations as a broadband replacement service later this year. It's set to spend around $17 billion in 2018 on capital projects, which includes its work on 5G. AT&T said it plans to launch a mobile 5G network in a dozen markets by the end of the year

China companies have their own 5G ambitions.  Last week, mobile chip giant Qualcomm announced plans to build 5G phones as early as 2019 with some of the largest Chinese phone makers, including Lenovo (Motorola's parent), Xiaomi, ZTE, Oppo (OnePlus' owner) and Vivo. 

'A costly and counterproductive distraction'

On Monday, FCC Chairman Ajit Pai -- a Republican appointed by Trump -- spoke out against the idea of a nationalized US network.

"I oppose any proposal for the federal government to build and operate a nationwide 5G network," Pai said in a statement. "Any federal effort to construct a nationalized 5G network would be a costly and counterproductive distraction from the policies we need to help the United States win the 5G future."

Fellow FCC Commissioner Michael O'Rielly likewise blasted the plan. 

"I've seen lead balloons tried in DC before, but this is like a balloon made out of a Ford Pinto," O'Rielly said. 

Across the aisle, Sen. Mark Warner, a Democrat from Virginia, questioned the need for such a network. 

"While I'm glad that the Trump Administration recognizes that maintaining American leadership in the information age requires a significant investment commitment, I'm concerned that constructing a nationalized 5G network would be both expensive and duplicative, particularly at a time when the Administration is proposing to slash critical federal investments in R&D and broadband support for unserved areas," he said in a statement.

Representatives of the White House didn't respond to a request for comment.

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The plan also raises a number of questions, including how the government would build the network and what airwaves it  would use to power the service. The next-generation network requires extensive amounts of wireless spectrum to enable its high speeds, as well as a comprehensive array of cellular radios, and it's unclear where it would get those resources. The FCC has actually auctioned off spectrum to private companies willing to build their own networks. 

Still, a government-run network could theoretically let smaller companies rent capacity and offer competitive services, according to NewStreet Research analyst Blair Levin. The risk is that wireless providers may re-evaluate their own 5G investment plans with the prospect that the government could become a source of competition. 

Pai says the best way forward is to push spectrum to the private sector and encourage companies to do their own thing.

"The market, not government," he said, "is best positioned to drive innovation and investment."


CNET's Roger Cheng contributed to this report.

Originally published Jan.29 at 3:56 a.m. PT.
Update, 6:22 a.m. PT: Added statement by FCC Chairman Ajit Pai and background information.
Update, 7:30 a.m. PT: Added analyst comment and additional background.

Update, 9:51 a.m. PT: Added additional comments from FCC Commissioner Michael O'Reilly and Sen. Mark Warner. 

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