Hey, who's up for nationalizing cellular service -- in America? Update: FCC chair balks; Update: 20 Questions

Alternate headline: Even if you have beaten the socialists, join ’em?  According to Axios, the White House has begun to consider whether to nationalize the next generation of cellular networks, effectively giving the federal government a monopoly on wireless telecommunication. The risk of intrusion by China is so high, according to a Power Point presentation from the intelligence community, the only way to secure American communications is to centralize them:

Trump national security officials are considering an unprecedented federal takeover of a portion of the nation’s mobile network to guard against China, according to sensitive documents obtained by Axios.

The memo offers two options. Option 1: assume control of the emerging 5G network, either by building it with federal resources and renting it out to telecoms for resale, or by having existing telecoms build it in a monopoly partnership under control of the federal government. Option 2: Let the telecoms build their own networks, just as they did with 4G, 3G, 2G, OG, and so on. For those who have been asleep for the last 25 years, that was the option that made cell service for both voice and data cheap, plentiful, and technologically innovative.

With that in mind, guess what the bureaucrats think of option 2:

Between the lines: A source familiar with the documents’ drafting says Option 2 is really no option at all: a single centralized network is what’s required to protect America against China and other bad actors.

The source said the internal White House debate will be over whether the U.S. government owns and builds the network or whether the carriers bind together in a consortium to build the network, an idea that would require them to put aside their business models to serve the country’s greater good.

Why it matters: Option 1 would lead to federal control of a part of the economy that today is largely controlled by private wireless providers. In the memo, the Trump administration likens it to “the 21st century equivalent of the Eisenhower National Highway System” and says it would create a “new paradigm” for the wireless industry by the end of Trump’s current term.

Ahem. The Eisenhower interstate system did not seize private roads. It build new roads in partnership with states that already had jurisdiction over highways within their own borders. Furthermore, it didn’t prevent states or private citizens from building their own roads either before or after the rollout of the interstate highway system. This analogy would only work if the states owned the cellular systems, not private industry. And if the states had owned the cellular systems we have now, we’d still be using analog signals off of massive battery packs, because neither the infrastructure nor the market pressure would have delivered the innovation we’ve seen over the past thirty years in wireless communications.

The memo apparently suggests that a federal takeover would not crowd out private providers:

The proposal to nationalize a 5G network also only covers one part of the airwaves; there’d be other spaces where private companies could build.

So then what would be the point? The argument for nationalization is that it takes a sole and government-based entity to fully protect against Chinese penetrations. If that’s the case, then why allow any private networks at all? If they connect to the Grand Patriotic 5G Network, then hackers can find their way into it from those private connections. If they don’t connect to the nationalized system, then what value would they be?

And let’s not forget the track record of the federal government when it comes to securing its current proprietary systems, too. China had an open pipeline into the Office of Personnel Management (OPM) for over a year before anyone discovered it, compromising the records of tens of millions who worked for the government any time over the past generation. How did they get in? One suspected pathway: the government contracted with a China-connected firm for data management. Six months after the hack had been exposed, OPM still couldn’t pass a security audit.  The NSA lost track of Edward Snowden; the army lost track of Bradley/Chelsea Manning; and so on.

It’s certainly possible for hackers to penetrate private industry too. Equifax is one recent example of a severely damaging hack that also got combined with a lack of transparency, and it’s hardly a singular example either. But as Stephen Green notes, forcing all communications into a monopoly platform gives foes a single point of attack, rather than forcing them to disperse resources across multiple platforms.

Finally, there’s something very disturbing about the federal government claiming ownership of all telecommunications, or at least enough of it to matter. Americans routinely express their political and cultural views over private networks. How comfortable would we be doing the same thing on the Grand Patriotic 5G Network? Even if you like Donald Trump, you have to admit that his moods get mercurial — or at least you have to imagine what will happen when Bernie Sanders or Kamala Harris have control over it. (Progressives, feel free to consider your options in a Ted Cruz or Mike Pence administration down the road.) It’s as Big Brother as we will have allowed ourselves to get.

Hopefully, this Power Point presentation was merely the product of spitballing on cybersecurity. If anyone does take this seriously, Congress should get involved immediately to block any kind of nationalization of communication channels. That has no business being proposed in a country that values freedom of speech and freedom of thought.

Update: FCC chair Ajit Pai says to count him out of the Grand Patriotic 5G Network:

Ajit Pai, the chairman of the Federal Communications Commission, is opposing a reported White House proposal to nationalize a 5G network currently being developed by the private sector.

“The main lesson to draw from the wireless sector’s development over the past three decades—including American leadership in 4G—is that the market, not government, is best positioned to drive innovation and investment,” Pai said in a statement Monday morning.

No kidding.

Update: Keith Hennessey is horrified, both by the idea itself and by the quality of the presentation pushing it. He has twenty questions for the White House, beginning with a slightly more polite version of “what the hell were you thinking?”

I had three reactions to the leaked Trump NSC materials.

  • Surely these are not actual policy documents they are using to make decisions.
  • The author is using China as a model to design a U.S. policy.
  • If the President says 5G or build a nationwide wireless network in his State of the Union address Tuesday night, his staff are setting him up for an embarrassing policy failure.

The leaked documents are of such low quality that they barely merit a response, but the policy ramifications would be so enormous and harmful I feel obliged to raise my concerns, framed as twenty questions for the author of these documents.

Just don’t call them Shirley. (via King Banaian)