Gingrich Opens Rift With Trump on 5G: `We Are Losing to Huawei'
(Bloomberg) -- Former GOP House Speaker Newt Gingrich assailed the Trump administration’s strategy for rolling out 5G wireless technology, saying the U.S. risks forfeiting leadership to China’s Huawei Technologies Co. and joined critics from both parties who urge a focus on different airwaves.
“We are losing to Huawei,” Gingrich said Thursday in an interview, calling for “dramatically better leadership out of the White House than we’re getting now.”
Gingrich, usually a reliable supporter of President Donald Trump, says the government is betting on the wrong type of airwaves, a view shared by Democratic and Republican members of the U.S. Federal Communications Commission. They say the nation should move swiftly to frequencies that can carry signals farther.
The former Georgia lawmaker spoke less than two weeks after Trump touted his strategy at a White House event, saying the U.S. “must win” the race for 5G and said the FCC is “is taking very bold action.”
The involvement by Gingrich heightens attention on the multi-billion dollar debate over how best to build a the new, super-fast network that promises to transform everything from cars to video feeds and household appliances via millions of connected devices, including mobile phones.
FCC Commissioner Jessica Rosenworcel has said the agency is turning to high-frequency airwaves while other countries have chosen lower frequencies that carry signals greater distances. On Thursday, FCC Commissioner Michael O’Rielly, a Republican, said at a New York conference that the agency’s actions on the lower frequencies “haven’t been on par” leaving supply “nowhere close to meeting demand.”
Both Verizon Communications Inc. and AT&T Inc. are using high-frequency airwaves as part of their nationwide 5G efforts. But the signals require three to four times as many cell sites as the current 4G networks.
Walt Piecyk, an analyst with BTIG LLC, tested Verizon’s 5G service in Chicago. He found it to be a very fast but limited to an area of about 200 feet. For better coverage, he says Verizon needs to add more midrange airwaves to its network.
“The current state of Verizon’s 5G network is hardly reliable,” Piecyk said.
On Wednesday, Verizon Chief Executive Officer Hans Vestberg said the high-frequency airwaves have “lived up to our expectation on performance.”
“We’re very early on in -- in improving the software, how we can deal with it,” Vestberg said during an earnings call.
The FCC, led by Republican Chairman Ajit Pai, rejects the notion that it gives undue emphasis to high frequencies.
“Strong 5G networks will require low-, mid-, and high-band spectrum. That’s why the FCC’s 5G FAST Plan focuses on making all three available,” Neil Grace, a spokesman, said in an email.
He said the FCC plans to auction a swath of lower-frequency airwaves next year, and is examining two other swaths for action.
The 5G technology rides over radio waves, and the FCC is in the midst of a years-long effort to find ways to accommodate current users while opening frequencies for the new service. Recently the agency commenced two auctions to sell rights to high-frequency spectrum, and it announced a third such sale on April 12, with Pai appearing alongside Trump at the White House.
The high-frequency airwaves carry a lot of information, and do so very quickly -- but they don’t travel far. Coverage can be limited to a few hundred yards.
The lower frequencies called for by Gingrich and other critics don’t carry as much data as quickly as the high frequencies. But they go farther, allowing coverage in areas outside dense cities and suburbs.
Many of the airwaves needed are designated for military use, and the Defense Department has been loath to allow civilian uses, said Gingrich.
“It’s been breathtaking how hostile the Defense Department bureaucracy is,” Gingrich said, adding that he has no economic interest in the issue.
The rest of the world is using the lower-frequency airwaves as it pursues 5G development, according to the Defense Innovation Board, a federal advisory committee that informs the secretary of defense.
“The United States may find itself without a global supply base if it continues to pursue a spectrum range divergent from the rest of the world” the board said in its April 3 report, adding that “it is likely that China, the current leader in that space, will lead the charge.” “China’s handset and internet applications and services are likely to become dominant, even if they are excluded from the U.S.”
That dominance could be exercised by Huawei, which spent $15.3 billion on research last year as it seeks to dominate the next generation of wireless service. The Trump administration accuses the Shenzhen-based company of potentially aiding Beijing in espionage -- something it has repeatedly denied -- and is orchestrating a campaign to block it from 5G rollouts around the globe.
The board recommended that the Pentagon share airwaves with other users. Already the FCC has devised one model, allowing commercial providers to use airwaves assigned to Navy radar.
Current attitudes make more sharing a tough sale, said Rob Spalding, a retired Air Force brigadier general who is now a senior fellow at the Hudson Institute, a policy group.
“In terms of getting the Defense Department to share, I would call that completely dead,” Spalding said. He cited reluctance from the Pentagon. “They view 5G as a civilian problem and not their responsibility, so why would they commit their airwaves?"
Carriers “recognize you need all types of spectrum to get the most potential out of 5G,” Tom Power, general counsel of CTIA, a trade group, said in an interview. “The U.S. is leading the world in terms of making high-band available. The FCC is working to make mid-band available, and we welcome all these efforts.”
There’s no need for a wholesale network, in part because carriers invest heavily and already sell wholesale access to providers such as TracFone Wireless Inc., Power said. “We don’t need to modify a model that has been effective for years in allowing the U.S. to lead in wireless deployment and investment,” he said.
Trump at the White House event rejected an alternative of “leading through the government” saying “we don’t want to do that because it won’t be nearly as good, nearly as fast.”
Republican strategist Karl Rove has registered to lobby for Rivada Networks LLC, a closely held company led by an Irish executive who wants to use airwaves now devoted to Pentagon uses for a wholesale 5G network that would be offered to multiple providers.
Declan Ganley, Rivada’s chief executive officer, said he welcomed Trump’s rejection of a government-run network. Rivada would pay the government for using shared airwaves, Ganley said. He said there “a real willingness” among Pentagon officials to allow use of airwaves when military functions don’t need the frequencies.
“What we’re looking to do is build a privately funded, privately led, privately operated wholesale open-access 5G network,” Ganley said in an interview. Rivada has assembled a board that includes former Florida Governor Jeb Bush, a Republican, and former Maryland Governor Martin O’Malley, a Democrat, and former Sprint Corp. Chief Financial Officer Joseph Euteneuer.
Rivada lost a battle in 2017 with AT&T for a contract to run a national network for emergency workers. A federal judge agreed with an assessment that Rivada, while offering a low-priced service, appeared to lack financial capacity and didn’t show it could attract customers. The officials didn’t consider Rivada’s partners, said Brian Carney, a spokesman for the company.
©2019 Bloomberg L.P.