Updated: Jul 24, 2020
G’day, and welcome back. This week it’s 5G and a concluding comment on Trump’s impeachment.
Approximate reading time: 4 minutes.
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Ain’t nuthin’ but a (5)G thang
Last week the UK government announced plans to allow Chinese tech firm Huawei to participate in parts of their 5G mobile network. The announcement went against substantial pressure from the United States to completely bar the Chinese company’s participation in their network. US Secretary of State Mike Pompeo was a vocal opponent. President Donald Trump had been ambivalent, until the Financial Times reported him venting “apoplectic fury” at UK prime minister Boris Johnson during a phone call between them last week.
So, what’s all the fuss about? Fifth Generation (5G)
technology stands to be up to 20 times faster than current 4G networks. This will enable the proliferation of internet connected devices in our homes, offices, cities, and militaries. Historically, suc
cessful first movers have dominated market access and regulations, obliging their competitors to adopt these standards.
Remember your old Nokia phone? Well, it was the push into 4G technology in the late 2000s by US companies that sidelined 3G leaders Nokia and Ericsson. This allowed US telcos to prosper, and a US ecosystem led by Google, Apple and Facebook to dominat
The change from 4G to 5G technology is based on a shift in the radio frequency (“spectrum”) that data is sent over. 5G technology can be pursued across a broad spectrum range, although the hardware and standards differ between lower and higher spectrums. Lower band spectrums aren’t as fast, but they can be implemented using existing 4G infrastructure. High-band spectrum 5G is substantially faster, but its transmission is patchy. Overcoming this requires a lot more infrastructure.
To generalise, high spectrum 5G has been pursued by the U.S., Japan and South Korea, while China has focused on the lower 5G spectrum, led by Huawei. There is a network effect - the market leader will attract followers to their spectrum, increasing interoperability across networks, driving further innovation.
The United States has been caught flat footed, with little U.S. low spectrum commercially available. With shrinking market share compared to emerging markets increasingly served by Huawei, US firms may have trouble attracting vendors and investment away from China’s low spectrum 5G ecosystem to their own high spectrum 5G.
Strategically, the US has a weak hand to play. Without a viable alternative to China’s 5G leadership, they have resorted to public pressure and fearmongering to partner and ally countries assessing 5G bids. The security concerns are real, but the tone and style of the US’ rhetoric betrays their weak position. US telcos, with their own commercial interests have supported this. Many countries have faced a dilemma – capitulate to US demands and risk falling behind on 5G development, or risk a deterioration in their US relationship. The UK is trying to walk a balance between these two.
Here is a great primer by the US Department of Defense last year – but be mindful as you read of the commercial and pro-U.S. interests backing this publication.
As expected, President Trump was formally acquitted on Wednesday. The vote was entirely partisan, with the single exception of Republican Mitt Romney. Some Republicans argued that this impeachment process will temper Trump’s behaviour going forward. Others were sceptical. Both sides of the political spectrum remain bitterly divided about the process, outcome, and conduct of the White House and Congress, a mood that will linger until the November election.
Witness the difference in perspectives between the New York Times and Wall Street Journal editorials today:
“…the impeachment trial in the Senate was a joke at the Constitution’s expense. Anyone hoping for a demonstration of responsible governance or the vindication of the separation of powers could only be dismayed.”
“A sorry period in Congressional history ended Wednesday with the Senate acquittal of President Trump on two articles of impeachment passed by a partisan and reckless Democratic House.”
The Economist was bleak:
“Mr Trump’s sometimes comical strangeness long made the fears of despotism he stirred seem overblown. But think of authoritarianism as a corrosive process, not a dictatorial end-state, and they no longer do. He has never looked more threatening to American democracy. And thanks to Senate Republicans, with one laudable exception, it has never looked more vulnerable to him.”
I noted last week that Trump’s popularity has remained stable throughout the impeachment process. This week’s polls show his popularity has actually risen. In 2015 Trump was a complete outsider in the Republican Party whose presidential ambitions were a running joke. His acquittal signalled a complete inversion of this, as Republicans doubled down in their support for him – some for fear of reprisal, others as true believers, but all with the cold calculus that he is the Presidential front runner, and their best chances lay in riding his coat tails.
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Have a great weekend,