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The DoD’s Plan to Nationalize 5G and Its Implications

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The DoD’s Plan to Nationalize 5G and Its Implications

October 20, 2020

Based off of its recent Request For Information (RFI), the United States’ Department of Defense (DoD) intends to balkanize the internet by nationalizing the U.S.’s 5G networks. Make no mistake, the DoD’s plan in releasing this RFI is nothing short of an attempt to capture the 5G market. It makes clear that the DoD seeks to “own and operate” a national 5G network to provide, in part, commercial services via Dynamic Spectrum Sharing (DDS) arrangements. This is in direct conflict with the United States’ traditional approach to wireless infrastructure, which encourages private firms to engage in that competitive market by opening more spectrum for pure commercial use. The DoD’s proposal is starkly akin to the People’s Republic of China’s (PRC’s) 5G plan where the government maintains full control and ownership of its networks. However, adopting the PRC’s model in the U.S. would not only slow down the rollout of 5G, but also, as explained below, could limit consumers’ access to over-the-top internet providers.

The DoD seeks to take the muni-broadband model and apply it to the whole nation. The muni-broadband model entails local governments building and operating their own broadband networks with the overall goal being to generate economies of scale and bring new government-subsidized competition to their regional broadband market. In theory, adding another competitor (even one that is government owned) should increase network deployment and decrease the overall cost to consumers. However, it turns out that the opposite is true. These networks end up costing the taxpayers more for less broadband infrastructure due in large part to these networks’ constant maintenance and expensive upgrades that governments simply cannot afford. DoD’s idea is so misguided that it has moved the Congressional Democratic leadership to do an about face on their usual positions concerning state-funded broadband networks - and even to agree with Senate Republicans on the issue. Energy and Commerce Chairman Frank Pallone, Jr. (D-NJ) and Communications and Technology Subcommittee Chairman Mike Doyle (D-PA) minced no words when describing the DoD’s proposal in a recent statement as “a government-owned and operated 5G network [that] will do nothing but slow the deployment of this critical technology.”

The DoD’s blue-chip in 5G is that it sits on most of our Nation’s valuable mid-band spectrum, which is essential for 5G deployment. This is clearly evident from every other countries’ inclusion of these frequencies in their respective 5G plans. This is especially true in the case of China that is a leader in mid-band spectrum deployment for 5G. The DoD’s frequencies in its RFI (i.e., 3450-3550 MHz) are prime “beachfront” mid-band spectrum and are critical to open up for commercial use. This is because U.S. commercial 5G networks are severely lacking in mid-band spectrum; a fact of which the DoD is well aware. DoD’s offer to industry is, thus, enticing, but it comes at a hefty price: every carrier must go through the DoD to access this mid-band spectrum that they all will need to make their networks functional. This is a Hobson’s choice for carriers: either they want a functioning 5G network or not. Hence, they will be compelled to work with DoD if this proposal moves forward. This will most likely translate into the DoD being yet another bureaucratic barrier of entry for carriers looking to deploy 5G, which, in turn, slows down said deployment.

The implications for network providers are extremely concerning, but not as concerning as what this means for consumers when accessing over-the-top internet services. Any government contract comes with significant restrictions, especially when working with the Defense Department. The RFI already tips DoD’s hand with respect to one likely restriction when it asks industry to identify “national security concerns/issues.” Like almost all agreements with the DoD, the various individual clauses usually culminate in this general principle: “you want to use our services, then you have to use our equipment because…national security.” Practically, this means that commercial networks and the devices that run on them will need to conform their tech with the DoD’s. This could include everything from the Original Equipment Manufacturers, or OEMs, network operators use to a device’s operating system’s software. Hence, DoD could not only dictate how and which carriers operate on its network but also how and which companies consumers can use to access the internet while on it.

Alternatively, some companies, particularly in the tech space, may want to see the government capture the 5G market, especially if they have existing contracts with the DoD. This is because it’s not only the government that becomes the monopoly, but also, so do the companies with which it contracts. A state-sponsored monopoly is not a novel concept by any means. We’ve all experienced these types of firms in our everyday lives, albeit on a much smaller scale - for instance, most local electric, gas, and water utility companies. However, this does not bode well for consumer choice in the 5G market. An inescapable fact regarding these entities is that there exists little or no competition between service providers in those markets due to the government categorizing them as public utility services. Put simply, companies that win a government’s bid after the government captures a particular market, becomes the only service provider for that market.

This could be fairly lucrative for tech companies selling online ads. Such companies may want a more concentrated stream of data, which nationalizing 5G (i.e., a single, unified national system) could mean. This may even explain why some big tech advocates have been lobbying for DoD’s RFI. This is because, frankly, it makes sense for them to do so. Currently, competition stands in the way of these companies collecting more consumer data. If they get to be the ones to provide a DoD-approved platform to access this 5G network, then those companies would, in turn, have access to oceans more consumer data.

All-in-all, the DoD’s proposal only provides more questions than answers and is unlikely to promote the U.S.’s competitiveness in 5G. In short, if the DoD actually cares about promoting 5G, it should release its unused spectrum in this band for commercial use, instead of hoarding it.

Also see Lincoln chief technologist Sean Roberts' recent interviews with Peter Rysavy for the Lincoln Shorts podcast:

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