Sen. Cruz Questions Mobile Technology Leaders on Economic Impact of Commercial 5G Broadband Deployment

WASHINGTON, D.C. – U.S. Sen. Ted Cruz (R-Texas), member of the U.S. Senate Committee on Commerce, Science, and Transportation, participated in a hearing titled: “The Race to 5G: Exploring Spectrum Needs to Maintain U.S. Global Leadership,” where he questioned leaders from the mobile technology industry on the potential economic impact of expanding commercial 5G broadband networks.

As a leading advocate for efforts to protect commercial 5G broadband networks from nationalization, Sen. Cruz has consistently raised his concerns in a number of prior Senate Commerce Committee hearings, including a hearing with Secretary of Commerce Wilbur Ross and a hearing with National Telecommunications and Information Administration (NTIA) Administrator David Redl. Furthermore, he was recently joined by Sen. Catherine Cortez Masto (D-Nev.) in introducing the E-FRONTIER Act, a bill that would prevent the executive branch from nationalizing 5G networks and reassert the role of Congress in the decision making process.

“The U.S. wireless industry is poised to invest roughly $300 billion in deploying 5G networks, which could create three million new jobs and boost GDP by $500 billion,” Sen. Cruz said. “Personally, I’m excited that we’re seeing some of that investment in Texas, already moving forward with at least three of our cities slated to be among the very first in the country to get 5G. […] As you know, last January a memo was leaked from the National Security Council which called for nationalizing 5G mobile broadband networks. Since then, there has not been a clear denunciation of that policy of plans to nationalize the networks from the administration. That’s why this week, Senator Cortez-Masto and I introduced the E-FRONTIER Act which will prohibit the federal government from nationalizing our nation’s telecommunications network without explicit authorization from Congress. Let me ask each of the witnesses here, what would it mean if the federal government were to nationalize our nation’s 5G networks?”

Watch Sen. Cruz’s full line of questioning here. A full transcript is below:

Sen. Cruz: Ms. Baker, according to Accenture the U.S. wireless industry is poised to invest roughly $300 billion in deploying 5G networks, which could create three million new jobs and boost GDP by $500 billion. Personally, I’m excited that we’re seeing some of that investment in Texas, already moving forward with at least three of our cities slated to be among the very first in the country to get 5G. AT&T previously announced that Waco and Dallas will see 5G services this year, and just yesterday Verizon announced that Houston, my hometown, will be getting 5G as well including five traditionally under-resourced neighborhoods. How important in your judgment is having a predictable supply of spectrum and a long-term schedule of options to deploying the spectrum and to rolling out 5G?

Hon. Meredith Baker: Thank you for your question Senator, I absolutely think that it is incredibly important. I think that’s why airwaves as a bill is so important to give us a schedule and it timelines for us to see this. If we’re going to invest $275 billion of our own money, then we need to know when and how the spectrum is going to roll out, so we really appreciate this committee’s leadership with airwaves. And, I thought that I was excited about Chip and Joanna Gaines in Waco, until my hometown, also of Houston, was going to get 5G so I share your excitement about it all and I hope that everyone gets it soon.

Sen. Cruz: As you know, the United States is in a global race against China and other countries to be the global leader in deploying next generation 5G mobile broadband networks. A European Commission’s spokesman for the digital economy and society said, “in the mobile equipment industry, we had 80 percent of the market in 2008 and because we were not ready for 4G mass deployment, the EU industry lost almost its entire market share for mobile phones.” What would be the consequences for the United States if we lose the global 5G race to China or to another nation?

Hon. Meredith Baker: I think Senator, that’s a great question. I think the same thing happened to Japan, so we need to learn the lessons from the leadership that Europe and Japan had in 2G and 3G and not lose our leadership in 4G. It will mean that, particularly if China wins, that Chinese companies will be leading the race. They’ll be leading innovation. They’ll be pushing their products to us, instead of America and the United States pushing our products to the world. 

Sen. Cruz: As you know, last January a memo was leaked from the National Security Council which called for nationalizing 5G mobile broadband networks. And since then, there has not been a clear denunciation of that policy of plans to nationalize the networks from the administration. That’s why this week, Senator Cortez-Masto and I introduced the E-FRONTIER Act, which will prohibit the federal government from nationalizing our nation’s telecommunications network without explicit authorization from Congress. Let me ask each of the witnesses here, what would it mean if the federal government were to nationalize our nation’s 5G networks?

Hon. Meredith Baker: I’ll start, I suppose. We appreciate your leadership in this bill. We think that nationalization is a wrong approach. We think our carriers are already announcing plans to roll out 5G this year and building upon that. Part of the reason we’re the envy of the world is the competitive market here. We compete on investment. We compete on coverage. We compete on speed and prices. It’s one of the few areas where prices are dropping and data is increasing. I think I noted earlier that we’ve had data increase four times since 2014 and our networks are covering it by speeding up 40 percent in the last two years. And meanwhile, the prices are down 13 percent over the two years. I’m not sure why we would nationalize it. It’s the wrong direction.

Mr. Dean Brenner: I totally agree with that Senator Cruz. We’re working, as I said in my testimony, at a feverish pace from our headquarters in San Diego to roll out the chips for 5G. We’ve accelerated our plans. We originally brought the deadlines in by a year. Just on Monday, we had a tremendous announcement about these new antenna modules that solve a problem for 5G smartphones that no one in the industry thought could be solved. So, we would like to just keep on doing what we’re doing and get 5G out there absolutely as quickly as possible. 

Mr. Craig T. Cowden: I would just say I’m not exactly familiar yet with the [E-FRONTIER] legislation but, in general, I never think it’s a good idea to have government-owned networks. I do think it disincentivizes financial investment from private sector carriers and so we would not support that. I think one of the goals of the perceived nationalization was that -- to improve network security. I think there are many other ways to do that with private sector coordination. That would be much more effective. I do think if it was nationalized it would absolutely slow down the roll out of 5G. It would be counterproductive to what we’re trying to achieve. 

Mr. Tom Stroup: The satellite industry is deploying multiple satellites from several different operators to play a role in 5G. It’s hard to envision how that could be nationalized or the government would be providing the comparable kind of services. And we also take security very, very seriously, so we think there are better ways to address that issue. 

Sen. Cruz: Thank you. And I look forward to working with each of you, continuing to work with each of you on this important issue. 

Read the text of the bill introduced by Sens. Cruz and Cortez Masto here. A one-page summary on the E-FRONTIER Act is below.

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