Pai: Count Me Out on Nationalizing 5G

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Documents obtained by Axios outline National Security Council (NSC) plans to guard against Chinese cyberattacks by bringing at least a portion of the 5G network in-house.

Shares in AT&T slipped 1.7% in early trading on the stock market today. The government aims to decide on a plan by the end of September and build it out over the next few years, said one of the officials in one of the report.

The impetus for this national broadband network is a fear of Huawei and ZTE, which in terms of the document, are seen not merely as network equipment providers but direct agents of "China".

The first option says the government can pay for and build the single 5G network, without the consultation of private companies.

Whether or not the proposal is serious, if this is how key elements of the government feel about Huawei, it's no wonder the phone maker's deal to sell its Mate 10 Pro with AT&T fell apart.

The government would lease the 5G network to wireless operators, according to reports by Axios and Bloomberg.

Huawei, which appeared to lose a deal with AT&T that would have given it an improved foothold in the United States handset market, faced criticism from U.S. lawmakers over its intellectual property protection and its ties to Chinese intelligence, according to a letter seen by AFP. "But, thanks to multi-billion dollar investments made by American companies, the work to launch 5G service in the United States is already well down the road".

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The global authorities overseeing the creation of a universal 5G standard are expected to release the initial specification this year and the final phase in 2019, paving the way for wide commercial deployment of 5G services by 2020.

Edison Lee, an equity analyst at Jefferies, said that plan "will only spark new debate in the USA, which would give China even more advantage in its goal to become a leader in 5G".

The Justice Department has sued to block AT&T's purchase of Time Warner (TWX).

Trump's administration is on the offensive against China. T-Mobile US (TMUS), controlled by Germany's Deutsche Telekom (DTEGY), and Softbank-owned Sprint (S), also plan to offer 5G services. While Nokia, Samsung, and Ericsson all make network equipment used worldwide, the document sees Huawei and ZTE as becoming globally dominant due to their government support.

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And how exactly would nationalizing this infrastructure make it more secure? Various trade groups have insisted the USA should stick to free-market policies, and the entire FCC-deeply split on the matter of net neutrality protections-has also come out unanimously in opposition to any such plan.

China early this month warned that American protectionism was on the rise after congressional documents showed that Chinese tech giant Huawei's designs on the USA market were causing national security concerns in Washington. It is not clear if the government would have sufficient spectrum to build a 5G network of its own.

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