Making Way (hopefully) for 5G

Lawrence White

By Lawrence J. White and Thomas M. Lenard

Cheap wireless communication has been a key to economic development in much of the world, and promises to revolutionize everything from education to medicine in our own world.

By Lawrence J. White and Thomas M. Lenard

To the applause of economists — not to mention stakeholders in the vast wireless communications industry — the FCC has driven the transformation of America’s deeply inefficient system from one that regularly assigned spectrum use by government fiat to one based on market allocation. A substantial portion of the “airwaves” is now flexibly licensed under a structure in which the government retains formal ownership, but licensees have considerable latitude to use or transfer their “rights” to others.

Still, much remains to be done to employ markets to allocate spectrum to uses where it is most valued as the country moves into the next generation of wireless technologies — often lumped together as “5G.” In particular, realizing the potential of 5G for gee-whiz applications will require that large amounts of additional spectrum be diverted from other applications.

That’s more easily said than done. Much of the spectrum needed for next-generation uses is currently controlled by federal agencies, ranging from the National Weather Service to the Defense Department, which pay nothing for it and therefore have no incentive to give up their stranglehold.

Read the full Milken Institute Review article.

Lawrence White is the Robert Kavesh Professorship in Economics and the ​Deputy Chair, Economics.