Trump Looking to Nationalize 5G Development?

The federal government reportedly is considering nationalizing nascent commercial efforts in the development of a 5G mobile network under the guise of national security interests, among other factors.

According to Axios.com, which cited a National Security Council PowerPoint presentation regarding the issue, the feds would help expedite 5G development within three years in an effort to safeguard the nation’s burgeoning telecommunications network.

5G is about 1,000 times faster than the current 4G network and could enable the download of an HD movie in less than a second.

A 3G network has download speeds up to 384 Kbps, with 4G at 100 Mbps and 5G reportedly up to 10 Gbps.

Nationalizing a private and largely unregulated industry such as mobile communications would be unusual and run counter to the GOP-controlled small government Congressional mindset. Not to mention President Donald Trump.

Yet with China reportedly set to spend more than $400 billion on 5G, U.S. officials worry the pseudo Communist power could undermine similar efforts in the U.S. due in part to much of the technology being manufactured in China.

“[The government wants to] build a network so the Chinese can’t listen to your calls,” said one official as reported by Reuters.

While the report suggested private 5G development remains an option, it is believed rollout could take longer.

Trump reportedly will weigh in on the matter sometime this year.

Then again, he could call Verizon, which is rolling out 5G in five major U.S. cities in the second half of the year — the first wireless carrier to do so.

Verizon aims to harness 5G technology with its new Oath platform, whose content brands include Yahoo, HuffPost, AOL, Tech Crunch and Engadget, among others.

“The next industrial revolution will be on Verizon’s [5G] network and will positively impact society like no technology we have seen before,” CEO Lowell McAdam boasted on the fiscal call.

Verizon Eyes 5G Future as Fios TV Ups Sub Losses

Verizon Jan. 23 announced it plans to roll out 5G wireless functionality in upwards of five major cities in the second half of this year – the first wireless carrier to do so.

The technology should dramatically increase streaming video speeds, with 5G download speeds up to 10 gigabits-per-second compared to one gigabit-per-second for 4G LTE. The higher speed could result in downloading a HD movie in seconds.

Verizon aims to harness 5G technology with its new Oath platform, whose content brands include Yahoo, HuffPost, AOL, Tech Crunch and Engadget, among others.

The telecom, which recently inked license deals with the NBA and NFL, added 47,000 Fios high-speed Internet customers to end the fourth quarter (ended Dec. 31, 2017) with 5.9 million subs.

“The next industrial revolution will be on Verizon’s [5G] network and will positively impact society like no technology we have seen before,” CEO Lowell McAdam boasted on the fiscal call.

Meanwhile, Verizon’s pay-TV platform, Fios video, lost 29,000 subs in the quarter, to end the year down 75,000 subs at 4.6 million.

When asked whether Verizon would follow in the footsteps of AT&T and Walt Disney seeking to acquire a media company, McAdam punted. The executive admitted Disney’s acquisition of 20th Century Fox underscores the value of scale in the market place.

McAdam said the jury is out regarding the merits of Verizon acting as an independent distributor of content compared to owning and creating content.

“I think until all of this media consolidation [AT&T/Time Warner, Disney/Fox] shakes out, you really can’t determine whether that’s a path we would be interested in,” he said. “But I can say unequivocally there is nothing going on right now without considering a large media play [involved].”

“In fact, if you look at our actions like the NBA and the NFL announcement … we think being able to monetize through advertising and being independent is a very good place to play for us right now.”

Wall Street remains on the fence regarding Verizon’s first-mover 5G strategy.

“5G is going to be a hundred times faster than your typical Internet service, so not only is it going to be faster, it’s going to have better margins and give Verizon a ton of opportunity for new customer growth,” Michelle McKinnon, analyst with Payne Capital Management, told CNBC.

Jonathan Chaplin, analyst with New Street Research, said that while 5G enables Verizon to bridge technology divides in the market, doing so comes at a major fiscal cost.

“We’ve pegged it at least at $35 billion dollars,” Chaplin said. “That’s going to [more than] absorb the gains [Verizon is] going to get in tax reform savings over the next four or five years — which I don’t think the market is anticipating.”