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US Unveils Key Telecom Sector Steps as 5G Race Intensifies

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As several sovereign countries cross swords for a 5G push, the United States has unveiled a slew of strategic steps to retain its leadership position. In a brief interaction with journalists, President Trump along with Federal Communications Commission (“FCC”) Chairman Ajit Pai recently gave a sneak peek at these policies that bring the telecom industry to the cynosure.   

The latest thrust follows a report by industry trade group – Cellular Telecommunications Industry Association – articulating that both the United States and China are currently on equal footing for 5G readiness. With a holistic top-down approach, the United States was able to expedite the process to set up the required infrastructure and back it up with testing and launching of early networks in key locations.

Augmenting Rural Internet Connectivity

In order to augment rural connectivity speed, FCC has decided to invest $20.4 billion over the next decade to build high-speed broadband networks. The focused initiative, dubbed as the Rural Digital Opportunity Fund, is likely to benefit up to 4 million households and businesses in the rural areas. This, in turn, is likely to spearhead innovations in the farming industry, leveraging 5G sensors, AI and cloud computing methods to boost farm production. (Read More: 5G Likely to Spearhead Innovations in Global Farming Industry)

FCC will take recourse to a reverse auction policy to provide funds to rural service providers under the Rural Digital Opportunity Fund and bridge the digital gap. The areas eligible for the new auction will include those without access to high-speed service, typically in the range of 25 Mbps downstream and 3 Mbps upstream. Firms like T-Mobile US, Inc. (TMUS - Free Report) , CenturyLink, Inc. (CTL - Free Report) and United States Cellular Corporation (USM - Free Report) are likely to capitalize on this initiative for rural broadband expansion.

5G Spectrum Auction

At the same time, FCC announced that the third round of 5G spectrum auction will take place on Dec 10 to make more spectrum available for super-fast 5G connectivity. The strategic move seems to be the call of the hour with countries vying a greater pie in this market to have a political, economical and technological advantage. (Read More: Race for 5G Intensifies as U.S. Matches Stride With China)

The FCC has already auctioned 1,550 megahertz of spectrum since November 2018 to boost 5G connectivity for commercial wireless providers. The latest auction will be the largest with 3,400 megahertz spectrum up for grabs in three different spectrum bands — 37 GHz, 39 GHz, and 47 GHz. Leading telecom service providers like Verizon Communications Inc. (VZ - Free Report) , Sprint Corporation (S - Free Report) and AT&T Inc. (T - Free Report) will surely attempt to outsmart each other and gain a greater market share in the upcoming auction as they continue to deploy 5G service in more U.S. cities.

Encouraging Privatization of 5G Network

As the telecom service providers gain prominence, steady investments are required to upgrade the networks with state-of-the-art technology. Dispelling widespread speculations that the government intends to nationalize this high priority networks, Trump asserted that the administration has no such plans and would rather encourage privatization for swift policy action.

Trump observed, "In the United States our approach is private-sector driven and private-sector led. The government doesn't have to spend lots of money. Leading through the government, it won't be nearly as good, nearly as fast."  

Road Ahead

As the battle for 5G supremacy intensifies, various countries are increasingly devising newer avenues to outsmart rivals. It remains to be seen whether the United States achieves the coveted technological dominance in this race with a focused road map.

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