MWC17: 5G won’t happen if regulators scare off investment

5G won't happen if regulators scare off investment
From left: FCC chairman Ajit Pai; Stéphane Richard, CEO and chairman of Orange; Andrus Ansip, VP of Digital Single Market at the European Commission; Mike Fries, president and CEO of Liberty Global; Karen Tso, CNBC Credit: Guillem Valle. Source: GSMA

All the hype and promise of 5G is going to depend on a regulatory environment that’s conducive to supporting the vast amount of capex investment necessary to roll it out – and there’s plenty of room for interpretation of just what sort of policy counts as conducive.

That was the overall theme in a keynote session on the “5G economy” on Day 2 of MWC17, in which operators and regulators shared the stage and argued over the kind of regulatory landscape that will best encourage 5G rollouts.

Newly installed FCC chairman Ajit Pai took the stage to make his case for the FCC’s return to a “light touch” regulation policy that favors market forces over government meddling to encourage investment in next-gen technologies like 5G.

“It’s not a forgone conclusion that we will fully realize this technological potential. After all, building, maintaining, and upgrading broadband networks is expensive,” he said. “And our 5G future will require a lot of infrastructure, given the densification of 5G networks. In my country alone, operators will have to deploy millions of small cells, and many more miles of fiber and other connections to carry all this traffic.  Doing all this will command massive capital expenditures.”

Pai said the key to 5G’s future is a regulatory regime with a simple and coherent set of rules that maximize investment in broadband and encourage innovation across the ecosystem – namely, a policy that’s light-touch, encourages facilities-based competition, frees up spectrum for cellcos to buy, and generally stays out of the industry’s way on issues like spectrum usage and net neutrality (a policy Pai has consistently opposed as an FCC commissioner, and one he is expected to ditch).

“The more difficult government makes the business case for deployment, the less likely it is that broadband providers big and small will invest the billions of dollars needed to connect consumers with digital opportunity,” he said.

On the European side of the equation, Andrus Ansip – VP of Digital Single Market at the European Commission – talked up the EC’s 5G Action Plan, promising that it would do what it could to ensure that the necessary incentives for 5G investment are in place. He also said that it requires that all industries get involved in the process to develop a common understanding of what will be required so that 5G benefits everyone. “It does take longer to reach a consensus, but it’s important.”

Stéphane Richard, CEO and chairman of Orange, said that the EU regulatory regime is generally headed in the right direction, but needs more favorable regulation in relation to spectrum management, harmonization and affordability. “The bands at 3.4 GHz to 3.8 GHz and the higher frequencies like 26 GHz need to be dedicated to 5G,” he said. “We also need more favorable regulation related to small cell deployments.”

Richard added the EU needs to change how it sees the industry: “not just through the eyes of consumers but also the industry and the investment challenges we face.”

Mike Fries, president and CEO of Liberty Global, was less impressed with the regulatory environment in Europe, saying it’s not particularly investment-friendly.

“We ‘re at a crossroads with 5G – it’s not predestined,” he said. “The investment won’t come if the environment is not conducive.”

Fries also said that while he’s not an expert, the 2020 target for commercial 5G seems “too aggressive”.

“There’s still a lot of room for 4G growth,” he said.

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