OPINION: Expanding The Digital Economy Requires A New Understanding Of Everything


Gerard Scimeca Vice President, CASE
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The G20 Summit is just getting underway, sure to be as contentious as ever with President Trump’s ongoing quest to redo nearly every U.S. trade deal.

It will be sure to dominate headlines for several days, and Trump is already holding true to form with his announcement that he may refuse to meet with the media’s favorite arch-nemesis, Vladimir Putin.

What the headlines likely won’t cover in this international economic Olympics is the global battle now underway to see who will win the critical race to be the world leader and set the standards for 5G, the revolutionary wireless technology that will cause a seismic shift in the work, leisure and lifestyle options of every American.

More importantly, the race to 5G holds tremendous implications for America’s future economic security.

To average U.S. consumers, 5G can’t get here soon enough. This new technology will vastly impact and expand our digital choices, redefining how Americans use everything from cell phones, to broadband, to ever-present wireless.

New 5G will deliver almost instantaneous data speeds over 100-times faster than the current 4G LTE standard. It’s a true game-changer, as much as America’s shift from radio to TV in the 1950s.

So far, the United States is lagging, with investment and infrastructure in China, Korea and Europe outpacing efforts here at home. If America doesn’t catch up — and soon — this race may be lost for good.

Key to winning the global race to 5G is continued investment in technology and infrastructure. Earlier this decade, America won the race to 4G through a commitment to billions of dollars in private investment and reaped the economic rewards in maintaining our position as the world’s digital innovation leader.

But the stakes are even higher with 5G, and the global competition is intense. Nations in Europe and Asia are pouring billions into 5G in an attempt to pull ahead, making it even more critical that America not fall behind.

To emphasize the point that game-changing technology needs game-changing rules that don’t rely on the old way of doing things, two recently released studies highlight how the digital landscape is shifting more than can be reliably perceived, making the usual business models and regulatory templates a thing of the past.

The big reveal in both of these analyses is that for America to win the race to 5G, and for consumers and our economy to benefit from its enormous promise, government has to get out of the way and let the market take its course.

The first study of note, produced by Duke Economics Professor Michelle Connelly, points out specific types of consumer-oriented technology are no longer staying within their own lanes, but spilling beyond their traditional paths. Long-accepted notions of broadband being tethered to physical locations, and wireless being used by consumers in a mobile capacity are a scenario whose days are numbered.

Broadband operators are now offering vertically integrated services and technology that consumers used to receive through wireless alone, and wireless companies are now offering streaming services and apps which don’t require a fixed locale.

The walls are coming down, meaning more competition between wireless and broadband companies, especially where consumers look to “bundle” various services such as cable TV subscriptions and wireless service. Regulations which attempt to segment technology into tidy boxes, the study concludes, are both fruitless and counterproductive.

The second study, offered by Dr. William Lehr of MIT, re-emphasizes that the “future of the global economy is digital.” Key among Lehr’s conclusions are that success in expanding the digital economy to include more people, while also lowering costs for consumers, require both enormous private investment in new infrastructure and robust competition among providers of platforms and digital content.

Currently, the United States has two major wireless providers, Verizon and AT&T, with two smaller providers in Sprint and T-Mobile. Lehr’s paper argues that by allowing the proposed merger of Sprint and T-Mobile to move forward, government will be encouraging a business climate where the United States will have three strong, nationwide competitors with the resources to maximize our broadband spectrum while offering more options for consumers as competition puts downward pressure on costs.

As with any paradigm shift, there will always be those hopelessly stuck in the past, blissful in their static slumber. Predictably, there’s no exception here.

The inevitable technology shift has awakened a small band of vocal digital Luddites committed to government intervention and industry guarantees, who further oppose opportunities such as the New T-Mobile. They call the new company “anti-competitive” even though combined it will still pale in size to both Verizon and AT&T, as clear a sign as any their signals are crossed.

Taken as a whole, these studies shine a bright light on the new digital landscape that must be realized for our economy to continue its exponential growth in digital products and services, while also providing the most benefits for consumers.

Competition with global competitors will be fierce, but for America to thrive in the economy of the future, there must be an understanding by government regulators that the old ways of regulating technology as if it were a static entity are already obsolete.

America is stronger and more prosperous if government lets the market dictate the flow of investment, the development of technology, and the products and services offered to consumers.

Gerard D. Scimeca is Vice-President for CASE, Consumer Action for a Strong Economy, a non-partisan, free-market oriented consumer advocacy group.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.