Sensible Regulations Key to 5G and Economic Growth

This article originally appeared on Forbes by Steve Pociask.

A new report was released this week by the American Consumer Institute (ACI), entitled “The Economic and Consumer Benefits from 5G.” The report zeroed in on the promise of next-generation networks and the challenges surrounding the deployment of new technologies. What is clear from this analysis is the massive economic and consumer benefits that will result when next-generation networks are launched, but these gains hinge on sensible infrastructure policies, especially at the state and local levels.

There’s plenty to be excited about when it comes to next-generation, or fifth-generation (5G), networks. 5G is expected to be significantly faster than previous generations and it will support a plethora of connected devices and services that extend far beyond the palms of consumers’ hands. We’re starting to see this now with everything from fitness trackers to home appliances to smart traffic lights, but with 5G, connections will be unlike anything we experience today.

Additionally, 5G will be a significant economic driver. ACI’s research finds that construction of 5G infrastructure will generate approximately $533 billion in gross domestic product (GDP) and 435,000 annual jobs for the next seven years. Once built, the estimated long-term consumer benefits will exceed $1.2 trillion. Those numbers are certainly impressive, but to make it easier to grasp the impact, ACI broke the data down by state.

While it is fun to talk about the possibilities of 5G, the reality is that the transition to next-generation networks won’t happen overnight. A significant amount of infrastructure needs to be put in place — $275 billion of it. Part of this effort hinges on the placement of small cells – a newer type of wireless infrastructure that helps densify wireless networks. Much smaller in size than a traditional wireless tower, small cells are theoretically easier to deploy, but the process to install them is mired in bureaucratic red tape.

State and local regulations throughout the country levy excessive fees for permits and applications, impose rights-of-way (ROW) and pole attachment restrictions, enact discriminatory zoning rules and delay government approvals. In some cases, municipalities have imposed moratoria, effectively blocking investments and service upgrades. One city set a $30,000 application fee for each utility pole and another locality imposed a $45,000 fee regardless of the amount of ROW use.

These types of costly hurdles ultimately deter deployment and consumer adoption. Effectively, this represents progress denied; it is the lost economy.

If the U.S. wants to continue to be the global leader for wireless broadband services and applications, the imposition of excessive fees and onerous delays can’t continue. We need policies that incent investment and deployment; not slow it down.

In recognition of this, some states and localities have already begun modernizing their infrastructure policies. Those areas will likely be the first to experience the benefits mentioned in the new report. Those localities that fail to modernize their policies will see less investment and will miss some of the economic and consumer benefits – an outcome that is simply not in the public’s interest.

 

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