Why a Return to Net Neutrality Would Harm the Race to Adopt 5G
America thrives and competes with best when it puts its free market up against top-down economies like China’s.
As President Joe Biden seeks to recalibrate U.S. foreign policy toward China and reestablish U.S. leadership, America needs to catch up with China in fifth-generation (5G) networks and 5G-dependent technology. To do so successfully, the Biden administration must not repeal the current U.S. policies towards neutrality of the internet.
Since taking office last month, President Biden has expressed interest in pursuing closer cooperation with U.S. partners in Asia and Europe to counter China’s global economic and technological dominance. The Biden administration also recently voiced its commitment to protecting American 5G networks from Chinese telecommunications manufacturers like Huawei.
While U.S. allies might appreciate the Biden administration’s multilateral approach to China-related tech issues, such rhetoric alone is unlikely to close the gap between China and the United States in 5G technologies. China’s lead in 5G technology has enabled Chinese smartphone companies and 5G-dependent technology—like autonomous vehicles—to gain an edge over their U.S. counterparts. While banning Huawei from 5G networks reduces the threat of Chinese espionage in the United States, it does little to improve America’s relative position in 5G competition.
Unlike China’s state-driven strategy, America’s private-sector-led approach means that the United States must rely on telecommunications companies to create and maintain America leadership in 5G technology. That is why the Biden administration needs to create incentives for the private sector to invest more heavily in 5G adoption and deployment. That is the first step that will enable private companies to develop technologies—such as “remote surgeries and automated factory floors”—which depend on 5G networks.
That is precisely the opposite of what the Biden administration’s telecommunications policies are likely to achieve. Unaware of geostrategic and economic realities, the Democratic commissioners of the Federal Communications Commission (FCC) seek to restore Obama-era net neutrality rules, which will not allow telecommunications companies to distinguish between, and charge different rates for, different types of internet usage.
Democratic net neutrality proponents argue that such rules are mandatory to create a non-discriminatory and fast internet. Some Democrats go further, with a Senator suggesting that consumers will “get the internet one word at a time” without net neutrality. But such exaggerated assertions underscore policymakers’ misunderstanding of how 5G broadband works. A key reason why telecommunications companies want to invest in 5G adoption is their future ability to charge varying 5G usage rates.
While this distinction may not have been as critical in previous generations of wireless communications like 3G and 4G, it is crucial to the future development of 5G. A fundamental feature of 5G internet is “network slicing”—which allows broadband providers to divide “radio waves into different segments” depending on their usage. For instance, 5G-enabled remote surgical procedures and automated vehicles have very different data usage requirements than audio streaming. The absence of net neutrality rules will allow broadband companies greater flexibility to distinguish between and offer heterogenous services for widely varying 5G needs.
As a result, broadband speed can charge higher rates and offer a faster speed to critical technology while maintaining lower speed for services that do not require fast internet. Without this ability to distinguish between varying internet usage, it will significantly diminish incentives for the private sector to invest in 5G technologies.
Net neutrality proponents—including Big Tech companies like Facebook and Google—also argue that broadband network providers will suppress online content without strict net neutrality rules. However, there is little evidence to suggest that telecommunications companies have suppressed internet content since net neutrality rules were repealed in 2017. Instead, it has been internet platforms like Facebook and Twitter—which are not subject to net neutrality regulations—which are accused of suppressing content. Consequently, the case for reinstating net neutrality rules based on free speech grounds remain weak.
Recognizing the obstacles that net neutrality poses to investing in 5G networks, broadband networks in Europe and the United States have been increasingly advocating a more flexible approach to internet regulations. The European Union’s strict net neutrality regulations remains a crucial reason why EU countries lag the United States in 5G adoption and broadband speed. As a result, major European telecommunications companies—including Siemens and Nokia—have called for the EU to relax net neutrality rules. The United States would do well to heed such calls. Imposing strict net neutrality regulations will create further uncertainty for telecommunications investors and jeopardize America’s growing progress in 5G technology.
If the United States falls behind China and other global competitors in 5G adoption, it will significantly harm America’s future global competitiveness in 5G-dependent technology—which range from automated production to driverless cars. That is why both Democrats and Republicans must ensure an environment that reduces market uncertainties and encourages the private sector to invest in 5G technologies. Reimposing strict net neutrality regulations for U.S. telecommunications companies will do just the opposite.
Ryan Nabil is a Research Fellow at the Competitive Enterprise Institute in Washington, DC, and Fox International Fellow at the Institut d’Études Politiques (Sciences Po) in Paris. A former Rosenthal Fellow in Congress, Ryan holds a BA from Kenyon College and an MA from the Yale Jackson Institute for Global Affairs.