Competitive 5G: The Future of Broadband Internet for all Americans

Our telecommunications system is at a generational crossroads and ensuring reliable access to high-quality broadband throughout the country — including in underserved rural and urban areas — must be a top priority. The best hope for achieving this vision rests with the development of true nationwide 5G networks.

The future of our digital economy must not be constrained by the limitations of our “last-mile” broadband infrastructure. An order-of-magnitude advancement in communications infrastructure is needed to handle continued exponential growth in traffic, while also delivering the improved reliability, real-time responsiveness, and customizable services required by the internet of things and 5G. To realize the 5G future, however, there will need to be significant new investment across the internet ecosystem, from network operators to application developers, shifting to smaller-cell architectures to meet 5G performance targets while continuing to meet the capacity needs of surging growth in traffic. Analyst estimates of the costs of upgrading U.S. mobile networks to 5G range from $100 to $300 billion.

Intense facilities-based competition among broadband platform providers will be essential to accelerating 5G infrastructure investment and ensuring the United States remains at the forefront of the global digital economy. The proposed merger of T-Mobile and Sprint has the potential to transform competitive dynamics in mobile broadband by creating a national facilities-based provider with the scale and capabilities needed to compete head-to-head with the two leading incumbents and large cable entrants. From 2010 through 2017, Verizon and AT&T have each sustained capital expenditures that averaged close to $10 billion per year, while T-Mobile and Sprint each averaged closer to $4 billion per year. With 5G on the horizon, the merger will change that balance at a critical moment, expanding the top tier of providers from two carriers to three.

Approving the T-Mobile-Sprint merger will greatly enhance prospects for sustainable, robust competition among broadband platform providers and accelerate the transition to 5G. Synergies from the merger of T-Mobile and Sprint will enable a $40 billion investment in America’s world-class 5G infrastructure and tech future. Faced with a more powerful and invested facilities-based competitor, Verizon and AT&T will be pressured to invest more rapidly in 5G themselves. In the race to 5G, network operators cannot afford to lag behind their peers. As a result, Verizon and AT&T customers will also get 5G faster as a result of the T-Mobile-Sprint merger.

Furthermore, the transition to 5G will enable mobile networks to offer similar levels of broadband performance as fixed networks offer today. This increased performance will provide new, competitive options for the many consumers with few choices in fixed broadband today. The increased capital intensity of 5G broadband will create new opportunities for infrastructure sharing and new business models for local facilities-based providers. At the same time, 5G is likely to increase demand for specialized broadband services in vertical markets, providing new vectors for specialized broadband resellers or Mobile Virtual Network Operators to enter. A market where multiple strong 5G facilities-based providers compete to sell MVNOs their wholesale capacity will be more competitive than the current dynamic.

Promoting robust competition among 5G broadband providers is the best way to deliver the promise of 5G to all Americans. The pro-competitive merger of T-Mobile and Sprint will help achieve that outcome.


Dr. William Lehr is an economist and industry consultant who serves as a research scientist in the Computer Science and Artificial Intelligence Laboratory at the Massachusetts Institute of Technology, engaged in multidisciplinary research at the nexus of technical, economic and policy issues confronting the evolving broadband internet ecosystem.

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