The latest round of tariffs on Chinese imports will be “wildly detrimental” to the United States’ rollout of 5G, a member of the Federal Communications Commission (FCC) warned Thursday.
Commissioner Jessica Rosenworcel warned the tariffs will hit equipment such as antennas, switches, routers, equipment for the re-transmission and generation of voice, data and images, as well as circuit boards. President Trump announced additional tariffs on $200 billion of imports from China this week, with duties initially set at 10% starting Monday and rising to 25% at the beginning of 2019.
"There's nothing theoretical about it," Rosenworcel said at an event hosted by media company Politico. "And I think it is wildly detrimental to our ability to lead in 5G. The FCC can't afford to put its head in the sand. We need to start speaking out."
"Tariffs are a terrible thing for the roll out of 5G. A 25% tax on the network equipment is not going to help us be first to the future" says @JRosenworcel during @POLITICOLive panel #TariffsHurt pic.twitter.com/UPxqtSDuOr— Consumer Tech Assocn (@CTATech) September 20, 2018
Telecom companies have been bullish on rolling out 5G either at the end of this year or the beginning of next, but Rosenworcel warned the tariffs will "harm our ability to lead" on the technology, which is rolling out in countries like China and Singapore. A study last month by Deloitte found China has outspent the United States by $24 billion on 5G infrastructure.
Rosenworcel also warned that the United States’ ability to lead on 5G is also being hampered by the lack of urgency in rolling out the small cell infrastructure necessary to support the faster network speeds promised.
Her fellow FCC Commissioner Brendan Carr agreed in earlier remarks, ahead of a vote next week by the full commission that would streamline rules around deploying said infrastructure. Carr’s proposal would preempt local laws that look to prohibit deployment of wireless service, places limits on the fees required to install the infrastructure, and shorten the required review period.
That plan gets a vote next week, and has already come in for criticism from the U.S. Conference of Mayors and the National Association of Counties, but Carr said it is necessary given how the United States lags behind China on installing 5G infrastructure.
During his remarks, Carr painted a gloomy picture of how far ahead China is. Since 2015, he said China has deployed 350,000 small cell sites, while in the same period the United States has deployed less than 30,000. Carr said the United States must install 60,000 a year and must encourage the private sector to lead the way.
"Let's get the government out of the way and allow the private sector to invest the $275 billion that's going to be necessary to deploy 5G infrastructure,” Carr said. “In my view, that's what's going to let us win: letting the private sector invest.”
While she declined to say how she would vote on the plan at the FCC’s meeting next week, Rosenworcel did raise concerns at preempting local control of the small cell installation process, and said that instead some localities have done it in a way that could serve as a good model. She pointed to San Jose, CA, which has entered into separate agreements with AT&T, Verizon and Mobilitie to deploy small cells in a public-private partnership (P3), and said that could be one to learn from.
“I'm not sure that a few bureaucrats in Washington telling them what they can and can't do in their backyard is going to expedite that [deployment] process,” Rosenworcel said. “In fact, the only thing I think it will speed is our way to the courts."
"We're very excited at the @FCC about getting #5G across the finish line." -@BrendanCarrFCC sits down with @margarethmcgill during today's @politico's #5G event. #POLITICOTech pic.twitter.com/6FCOjATMq7— CTIA (@CTIA) September 20, 2018
Carr and Rosenworcel also differed somewhat in their views of the process of the FCC auctioning spectrum, and so making it available for 5G use. The FCC is set to hold an auction of millimeter wave spectrum at the end of the year, having promised others this fall. Meanwhile, the U.S. House of Representatives passed a bill earlier this year identifying available spectrum, and Carr said that spectrum allocation is “full steam ahead” and far ahead of every other country.
But Rosenworcel said the FCC’s piecemeal approach to auctioning spectrum means it is wasting an opportunity for the United States to be leaders and means other countries can step into the void.
"We already should have held the auction,” Rosenworcel said. “We should have led the world, but instead in this band, South Korea has led, and I think that's a shame."