America in race against China – and the clock – to control future of techThe Honorable Newt Gingrich
China and the West are locked in a struggle for control of the future of communications technology, the next generation Internet, and the flow of information.
The next two weeks may well prove decisive in deciding who wins the future. The Chinese know it and are acting with speed, decisiveness and commitment. They’re moving with the urgency and sense of purpose needed to prevail. By contrast, the American government and American companies are far behind and just starting to play catch up.
Next week, the global wireless industry — including network operators, equipment and device makers, and regulators and officials — will gather in Barcelona, Spain for the annual Mobile World Congress. Barcelona is always important for the industry, but this year it is especially pivotal.
As the world transitions to 5G, Chinese telecom giants Huawei and ZTE have pulled out all the stops to dominate this next generation of wireless tech. Primacy in wireless is a key goal of Beijing’s “Made in China 2025” program and for good reason: The modern world runs on wireless, and 5G networks will make connectivity even more central as the “Internet of Things” connects up all manner of devices and appliances that today are off the grid.
In the very near future, dominating the wireless world will be tantamount to dominating the world. Beijing believes this, and at least some in our government have begun to realize its importance. But many of our allies and others around the world seem content to stand by and let Beijing’s march to domination continue unhindered. We cannot allow a nation that has no respect for political freedom, freedom of speech, or freedom of conscience to dominate this space.
“Go” is an ancient Chinese board game based on encirclement and territorial control. It is the most ancient and complicated board game in the world. Beijing is engaged in a concerted strategy of encirclement and control of wireless. But too many nations in the West are content to “let the chips fall where they may.”
Our own laissez-faire tendencies and preferences are being used to defeat us. If we don’t take decisive action soon, we will find that the Chinese have occupied an overwhelming position in wireless on the geostrategic map. We will find ourselves surrounded.
Since the Canadians’ arrest of Huawei CFO Meng Wanzhou at America’s request last December, the Trump administration has stepped up its public efforts to rally friends and allies against the specter of Chinese primacy in wireless. And it has had some success.
But it is not enough to seek bans and restrictions on Chinese equipment in next-generation networks. Already, Germany has ruled out a ban, and the U.K. – which is still weighing its options – is likely to conclude that a ban is too costly given how much Chinese equipment is already installed in networks there.
The U.S. needs a positive alternative to the Chinese model, and it needs to put it forward right now, before or during the meeting in Barcelona. If we don’t, this year’s Mobile World Congress risks turning into a victory lap for Huawei and Beijing.
The solution is not, as some have put it, to “become like China to beat China.” China is playing to its own strengths – state-directed investment and financing, lack of checks and balances internally, and a unified decision-making structure – to support its goal of wireless domination.
To counter this, we should play to our own strengths: A culture of innovation, the power of price discovery, and deep and liquid financial markets. Our incumbent carriers are moving too slowly on 5G, content to deceptively rebrand their existing 4G networks as suddenly “5G,” rather than deploy the networks of the future.
Decisive action building a public-private partnership in the near term demands that we make shared spectrum available for a carrier-neutral, wholesale-only, nationwide 5G network to be built in the next two to three years across the entire country. This could be a kind of wireless moonshot (but with private capital) that will spur microelectronics manufacturing here at home, accelerate the deployment of next-generation networks, and show the world that Chinese wireless dominance is not inevitable.
By making the network wholesale and adhering to a principle of open access (rather than limited access for some companies), both existing industry players and new, entrepreneurial startups could get in the game. This would ensure the new spectrum would not become the plaything of one industry giant to the detriment of all others.
Open access should also mean that available network capacity cannot be hoarded. This will increase utilization, expand the economically viable edge of the network, and allow price competition rather than oligopoly economics to set the cost of network access. This will increase return on new investment and accelerate investment in American 5G.
The project should be nationwide, with broad geographic coverage – in contrast to current operators’ plans for targeted, urban-specific 5G rollouts, which leave rural America in a 3G or 4G world. This will benefit those on the wrong side of the digital divide while making possible a wider range of innovative uses of the network. These include precision agriculture, automotive and trucking telemetry, telemedicine, and many other advancements.
Beijing has made primacy in the wireless industry a national priority. It has taken a whole-of-government approach (including policy, financial and diplomatic initiatives) to achieve this geostrategic priority. The U.S. has started to take diplomatic steps to counter this push. But more is needed – and quickly.
Picking or subsidizing national champions is not the American style – and is not necessary under the approach I’ve outlined. But an allocation of spectrum to accelerate deployment and pave the way for an alternative to the Chinese model is essential to combat Beijing’s concerted effort to seize control of this vital strategic domain. And we must do it now, while the world’s attention is trained on the Mobile World Congress and the plans for the future of wireless are being written and signed in Barcelona.
We have no time to lose.