WASHINGTON (Reuters) - The top U.S. communications regulator and wireless companies oppose an idea by some in President Donald Trump's national security team for the government to build a 5G wireless network to counter China spying on phone calls.
The Trump administration has taken a harder line with China on policies initiated by predecessor President Barack Obama on issues ranging from Beijing's role in restraining North Korea to Chinese efforts to acquire U.S. strategic industries.
The government has blocked a string of Chinese acquisitions over national security concerns and the 5G network concept is aimed at addressing what officials see as China's threat to U.S. cyber security and economic security.
"Any federal effort to construct a nationalized 5G network would be a costly and counterproductive distraction from the policies we need to help the United States win the 5G future," Federal Communications Commission (FCC) Chairman Ajit Pai, a Republican appointed by Trump, said in a statement on Monday.
The option of a nationalized 5G network was being discussed by Trump's national security team, an administration official said on Sunday.
CTIA, the trade group that represents AT&T Inc, Verizon Communications Inc, Apple Inc, Sprint Corp and others, said in a statement on Monday that the "government should pursue the free market policies that enabled the U.S. wireless industry to win the race to 4G."
Carriers have already spent billions of dollars acquiring spectrum and beginning to develop and test 5G networks, which are expected to be at least 100 times faster than current 4G networks and cut latency to less than one thousandth of a second from one one hundredth of a second in 4G, the FCC said.
The more responsive networks could allow, for example, for real-time remote operations such as medical procedures and running large machines.
A U.S.-built 5G network could in theory be more resilient to Chinese government intrusions. A leaked National Security Council memo published by Axios news website on Sunday said China is the dominant manufacturer of network infrastructure and notes the importance of building the network with "equipment from a trusted supply chain."
Shares of the biggest U.S. wireless carriers fell at the start of trade on Monday, with Verizon and AT&T down 1 percent.
The administration official who spoke to Reuters confirmed the gist of the Axios report and said the option was being debated at a low level in the administration and was six to eight months away from being considered by the president.
"This has been building for months. I don't think the White House options papers do justice to the issue. It goes much deeper," said Michael Wessel, a commissioner on the U.S.-China Economic and Security Review Commission, which works for Congress and follows China issues.
Apart from FCC chairman Pai, three of remaining four FCC commissioners also said on Monday that they opposed nationalizing the 5G network, while the fourth expressed skepticism.
Commissioner Jessica Rosenworcel, a Democrat, said the memo "correctly diagnoses a real problem. There is a worldwide race to lead in 5G and other nations are poised to win. But the remedy proposed here really misses the mark."
A Republican on the FCC, Mike O’Rielly, said the option was "nonsensical" and did not represent what was happening in the marketplace. He said the FCC should provide additional spectrum to help the companies.
Any 5G nationalization plan would likely cost hundreds of billions of dollars, require the government to obtain spectrum and raises questions whether Americans would want to buy service from a government entity, wireless carriers said.
USTelecom, another wireless trade group, said "there is nothing that would slam the breaks more quickly on our hard-won momentum to be the leader in the global race for 5G network deployment more quickly than the federal government stepping-in to build those networks."