5G is a key factor behind Trump tariffs

For Ganley, the current model of how radio waves are badigned to mobile phone operators has been broken. At the moment, US telecommunications firms UU They will bid for the so-called spectrum through an auction process carried out by the Federal Communications Commission (FCC). In other countries, the appropriate regulator will control the spectrum auctions. This often leads to the domination of the larger players who have more money to spend.

The CEO said that this has killed innovation, particularly among European companies that led previous generations of mobile technology.

"Because of the way the spectrum was badigned, we adopted the top-down model in a way that we have not done since feudalism, we recreated a top-down structure that has become an absolutely critical part of our economy, "said Ganley.

He added that this model adapts to the Chinese because of the top-down nature of the second largest economy in the world. In the auction model, US firms UU They compete strongly with each other to win customers. This affects their earnings and, therefore, their ability to invest in innovation. However, in China, where there are only two or three major state networks that dominate the market, this model is very appropriate. They can continue to operate and invest due to the support of the Chinese government. This could allow them to get ahead of the US telecommunications companies, which may have difficulty competing when it comes to launching 5G.

Ganley said that while many European and US telecommunications companies could die, China could prop up its domestic players for several years. years. That is why he, and his company Rivada Networks, defend a wholesale model to badign spectrum, similar to how the electricity market works.

The model theoretically would allow more players to bid for spectrum when necessary to meet demand and this would lead to more dynamic pricing.

"What we have to do is completely flip the table," Ganley said, adding that this would allow the United States to get ahead of China by 5G.

Interestingly, the Trump administration has hinted at such a policy. Kelsey Guyselman, political advisor to the White House Office of Science and Technology Policy, said in a recent event that the government recognizes that "shared" spectrum could be a way to launch the next generation of mobile networks, pointing to a model wholesaler

And it is clear that the upper echelons of the Trump administration are thinking of a wholesale market model for 5G. Brad Parscale, campaign manager for Trump 2020, tweeted last month that he believes this is the way to go.


Ganley said that the 5G race is moving quickly and that EE. UU You need to introduce a wholesale model or risk losing. the Chinese.

"We are 13 months away from really failing," Ganley told CNBC.

Not all experts are convinced that a wholesale spectrum model could be up to the hype.

"I think it's a good idea if the jury is still deliberating on whether it will achieve the goals that have been articulated and part of that is based on the idea that many of the main players involved in 5G are still looking for those cases of 5G business really lucrative, "said Shaun. Collins, technology, media and telecoms badyst firm CEO CCS Insight, told CNBC by telephone earlier this week.


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