China tit-for-tat tariff tiff a terrible thing, warns FCC Commissioner
Comment President Donald Trump’s trade war with China may come with a serious cost to America’s next-generation cellular networks, a federal regulator has warned.
FCC Commissioner Jessica Rosenworcel told a conference audience on Thursday that part of the new tariffs announced by the White House against China will include 25 per cent levies on essential networking components.
The import levies are a “terrible thing” for 5G, Rosenworcel warned and are “not going to help us lead.” The goods included under the new tariffs including antenna, switches and routers – all of which are essential to the build-out of super-fast mobile networks.
Earlier this month, the FCC made big play of its plans to introduce a nationwide cap on how much local and state government can charge telcos to install 5G cells, hailing it as removing a barrier to deployment.
That plan came under immediate fire from one expert who said it amounted to little more than a “large transfer of wealth from the public to private enterprises” that would actually expand the digital divide between urban and rural areas. And he warned that the new tariffs would have a far greater negative financial impact on the rollout of 5G than the one-size-fits-all federal cap – something he calculated will account for just one per cent of the cost of such a network.
That point about tariffs was reiterated by Democrat Rosenworcel, and notably ignored by fellow FCC commissioner Brendan Carr – a Republican – who used his time at the same conference to plug the new proposal and continue pushing the line that there is a “race to 5G.”
The supposed “race to 5G” has become the rallying cry for everyone from federal regulators to members of Congress to push for new rules and laws in the US that make the expansion of existing networks in the nation easier and cheaper. It was a line developed by the very companies that will benefit most from it – the large telcos – and has seemingly gone unquestioned despite its dubious nature.
Quick, don’t think
Driven by the apparent urgency, more than 20 US states have introduced legislation to make it easier for companies to install 5G cells. But others who have dug into the issue a little deeper are not as excited, and similar measures – again, pushed by the industry that will benefit from them – have failed in at least six states.
The truth is that 5G technology remains in its earliest stages, and the industry is still unable to give clear examples of what the additional benefits of the technology will be or, crucially, who will pay for it. But that hasn’t stopped an endless flood of commentary about how amazing it will be, and why the government should do everything in its power to make it as cheap as possible for telcos to introduce.
Just today, Verizon’s VP of “city solutions” was in the news for hailing 5G as a “game changer” before embarking on a vague Futurescope prediction of how everything will use 5G and everything will be faster and safer and better. Of course news about actual companies producing actual products remains perilously thin on the ground.
The “race to 5G” is largely built on the idea that China is forging ahead with its version of the fast wireless technology and so could dominate its future direction by putting in huge orders for the equipment necessary to make it work. Chinese companies could also influence the direction of the still-fluid technical standards and make a fortune from licensing their related technology.
In reality, however, Chinese companies account for roughly 10 per cent of the patents included in 5G technology while American giant Qualcomm possesses 15 per cent of the related patents on its own. European companies like Nokia and Ericsson have an equivalent patent portfolio to all Chinese companies.
American corporations want a greater piece of the market, and also see 5G as a potentially enormous windfall since it requires a massive degree of investment in hardware: the higher speeds are achieved by using frequencies that don’t travel as far and so there needs to be many millions more cell stations to make it work.
But if Chinese and South Korean businesses are able to perfect the technology first and undercut American suppliers, that massive investment will go to them. Plus, of course, American companies use China-made products within their own products, so the Trump tariffs are only going to exacerbate the problem.
Not that you are going to hear that from legislators or (most) regulators, thanks to the increasingly partisan politics around absolutely everything.
In the meantime, there is another fear factor at work: the claim that 5G networks will cause health problems. There is a groundswell of determined individuals convinced that more cell sites means more cancer, and that could create a public policy headache that overrides all the determined lobbying and rhetoric about races.
In court this week in the UK, anti-5G campaigner Mark Steele alleged that children were being “microwaved in their beds,” and that the new technology was causing cancer and miscarriages. Steele is appealing the local council’s injunction against him that prohibits him from warning residents about the risks of the new technology – a sure sign that such fear-mongering is disturbingly effective. ®