Trump turns to 5G to avoid network spies

A leaked, rather alarming proposal from the US National Security Council says the Trump administration should consider building its own nationwide 5G wireless network.

Under the first option, the USA government will pay for and build a single network, in an unprecedented nationalization of a historically private infrastructure.

Currently, US wireless carriers are planning to launch their own 5G networks in 2019 or 2020, which they would not share. While this could take longer and cost more, it would cause "less commercial disruption" to the wireless industry than the government building a network.

In a separate report, Reuters confirmed the plan from a senior administration official who said it was "six to eight months away from being considered by the president himself". The federal government would build the nationwide network within three years, and rent it back to wireless carriers for private use. "We want to build a network so the Chinese can't listen to your calls", a source told Reuters.

But nationalizing the construction of new wireless infrastructure - formerly handled by competing companies in the tech and telecom industries - would represent an unprecedented shift from the private sector to the government.

Trump recently began making good on his aggressive "America First" trade agenda, with China as a primary target by imposing steep tariffs on imported washing machines and solar panels.

CTIA, the trade group that represents AT&T, Verizon, Apple Inc, Sprint Corp and others, said in a statement the "government should pursue the free market policies that enabled the USA wireless industry to win the race to 4G".

The White House has taken a harder line on the policies former President Barack Obama initiated on different issues that ranged from Beijing's role in restraining its neighbor North Korea to efforts by the Chinese to acquire strategic industries in the U.S.

As far back as October 2012, a Congressional investigation voiced concerns that Huawei and ZTE, a Chinese telecommunications hardware maker, if allowed to provide equipment for US infrastructure, could "undermine core USA national-security interests". While Nokia, Samsung, and Ericsson all make network equipment used worldwide, the document sees Huawei and ZTE as becoming globally dominant due to their government support. (Shenzhen: 000063; Hong Kong: 0763), China's two biggest makers of telecom networks, as a potential security risk, and warning major U.S. operators not to use those companies as infrastructure suppliers.

The Trump administration's 5G plan comes on the heels of the scuttled smartphone distribution deal in the United States between Huawei Technologies and AT&T because of U.S. security concerns.

Edison Lee, an equity analyst at Jefferies, said that plan "will only spark new debate in the United States, which would give China even more advantage in its goal to become a leader in 5G".

Federal Communications Commission Chairman Ajit Pai released a statement today saying that he opposes any such centralized 5G network, and it's his agency that controls the nation's airwaves. In the model now under consideration, the owner of the network would not directly provide telecommunications services to consumers.

  • Kyle Peterson