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Federal 5G proposal hits major resistance

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The telecom industry and policymakers of both parties quickly squelched a Trump administration proposal calling for the federal government to nationalize part of the U.S. wireless network after Axios published a leaked document outlining the idea.

Why it matters: The swift negative response significantly diminishes the chance of the plan — which White House officials actively discussed with others throughout January — getting off the ground. “Some of the commentary is, like, LOL kind of stuff,” said a congressional staffer, of the conversation around the memo. “The way it’s getting sent to me is more of an eye roll."

What they're saying:

  • “It should also trouble us, frankly, that the National Security Council can’t keep track of its own PowerPoints,” said Rep. Greg Walden, an influential Republican who chairs the House Energy and Commerce Committee, which oversees telecom issues.
  • White House Press Secretary Sarah Huckabee Sanders said, “Right now we’re in the very earliest stages of the conversation, there are absolutely no decisions made on what that would look like, what roll anyone would play in it — simply the need for a secure network."
  • White House officials also spoke anonymously to reporters to downplay the story. However, the National Security Council eventually confirmed to Recode's Tony Romm in a statement that "all options are under consideration" towards a broader goal of secure, nationwide 5G.
  • All five members of the Federal Communications Commission said the plan was a bad idea. Republican FCC Chairman Ajit Pai said that nationalizing a 5G network would be a "costly and counterproductive distraction from the policies we need to help the United States win the 5G future."
  • They were backed up by the wireless carriers who have already invested heavily in developing 5G networks. “The government should pursue the free market policies that enabled the U.S. wireless industry to win the race to 4G,” said Meredith Attwell Baker, who is the chief executive of the wireless trade group CTIA.

What we're hearing: Administration officials have been floating the idea of federal involvement in a 5G network for weeks in conversations with government agencies and companies.

  • At a meeting with industry representatives in mid-January, administration officials raised the general idea of the government taking some role in a 5G network for reasons related to China and national security, according to two sources familiar with the matter.
  • Discussions included staffers from some major wireless carriers including AT&T and Verizon, equipment makers like Ericsson and others interested in 5G like Google. The concept did not include the level of specificity contained in the memo, but met a chilly reception.
  • The broad idea was also raised in a meeting between former Alphabet chairman Eric Schmidt and administration officials, one of the sources said.
  • The version of the memo published by Axios on Sunday was circulated to government agencies as recently as this month.

Yes, but: Some indicated they thought the memo’s broader arguments about America losing ground in the race for competitive networks had a point.

  • "This correctly diagnoses a real problem. There is a worldwide race to lead in [5G] and other nations are poised to win," tweeted FCC Democrat Jessica Rosenworcel, adding the proposal's conclusions missed the mark.

Why you'll hear about this again: The strong opposition has raised serious doubts about the proposal's feasibility. But it may come up today at a House hearing on digital infrastructure, as well as at Pai's monthly press conference.