March 12, 2018 – Aija Leiponen, professor at Cornell University’s Dyson School of Applied Economics and Management focuses on the telecommunication industry. Leiponen says that the U.S. has lost technological leadership in wireless communication, entering the telecommunication industry to build a government-operated 5G network will likely not restore that leadership.
The Trump administration proposal to build a nationalized 5G network to counter China’s prominence in communication technology is illogical and irrational.
First, a nationalized network will not be any more secure than the best security technologies provided by the private sector. The federal government is not an expert in secure network technology. The government could certainly work with telecommunication companies and through regulation and incentives encourage them to enhance the security features of their networks, but the idea that the government can build a more secure network is not based on any facts or realism.
Second, it makes no sense for the government to ‘compete’ with China through a nationalized communication network. Even though Chinese companies (particularly Huawei) have risen to global prominence, it is not correct to say they are ‘dominant’ in the industry with a market share around 25-30%. There are many other technology vendors in telecommunications, although many of them are based in Europe (particularly Nokia and Ericsson).
That the U.S. has lost technological leadership in some areas of communication technology is a different issue. Building a government-operated 5G network will not restore that leadership. The U.S. would likely need to procure many of the critical components from foreign technology vendors to get access to state-of-the-art technologies.