Trump’s 5G Tweets Signal Support for Market Innovation, Not Softening on Huawei and China Tech

President Donald Trump signaled support Thursday for technology and market structure innovation that would create an open-access wholesale market for 5G wireless spectrum.

In a pair of tweets sent out Thursday morning, the president called for wireless network technology that is “far more powerful, faster, and smarter” than the current networks. He said the way to achieve this was through competition rather than the current system of oligopolistic control of wireless spectrum by major telecom companies.

Trump’s tweets were initially misinterpreted as a sign that the president was softening the administration’s stance on Chinese technology. CNBC described the tweets as “bizarre” and claimed that although Trump didn’t refer to China or Huawei, “that’s likely what he’s referencing.”

But the meaning of the president’s tweets was clarified pair of tweets from Brad Parscale, the campaign manager for Trump’s 2020 reelection efforts.

 

The US has for decades parcelled out wireless spectrum in one-time auctions that allows for spectrum to be ‘owned’ by major carriers even when it goes underutilized. This has led to less competition and innovation in wireless networks, critics of the existing system say.

Parscale’s tweets make it clear that the president was signaling his agreement with these critics and supporting efforts to reform the system of distributing wireless bandwidth. Reformers have proposed allowing a wholesale market for bandwidth, where various competitors would bid for short-term access to unused bandwidth.  Access to wireless bandwidth would be tradeable, liquid, and accurately priced according to real-time demand, much as securities are priced in the capital markets.

New technologies–likely what Trump is referring to when he mentions 6G–allow bandwidth to be distributed in real-time rather than permanently reserved for bidders. This would enhance competition and innovation, as well as drive down prices, the reformers claim.

The chart Parscale tweeted shows that U.S. customers pay more for wireless data than anyone else in the world, a fact that advocates of developing wholesale markets for bandwidth have pointed out in meetings with Trump administration officials.