Wharton's Kevin Werbach and Northeastern's Andrea Matwyshyn discuss how the U.S. can take internet connectivity to the next level.

A scrapped proposal for a nationalized 5G network continues to make waves in the telecom community, giving renewed focus to some of the challenges the U.S. faces in providing a safe, speedy and accessible internet.

The memo, which was made public last week by the news site Axios, proposed a publicly owned network to ensure internet security and to counter China’s dominance in the space. The memo sparked alarm from telecom companies, and Federal Communications Chairman Ajit Pai told The New York Times that he was against the idea. White House officials said the proposal was in its very early stages; the memo’s author, Brigadier General Robert Spalding, has since left his position at the National Security Council.

In an interview with the Knowledge at Wharton show, which airs on SiriusXM channel 111. (Listen to the podcast above), Wharton legal studies and business ethics professor Kevin Werbach and Northeastern University professor Andrea Matwyshyn noted that internet security is a complex issue where exclusive government control would be not just inadequate, but also counterproductive. They suggested that the government should instead focus on freeing up networks, fostering innovation and providing a basic level of municipality-run Wi-Fi, especially in remote and rural areas. The memo revealed a lack of understanding of the fundamental issues involved in internet security, usage and coverage, and gives the impression that the White House is granting validity to China’s approach of state control, they added.

Dead in the Water, but Scary

“It’s not going to happen,” Werbach said. “This was a trial balloon floated by one staffer in the National Security Council. At some point in the last few months the PowerPoint was leaked out, which is an interesting story in itself that someone wanted to leak that.”

Even so, Werbach said that it is “incredibly striking” that the idea was floated in the first place. He found the motivation for it especially worrisome — that the government needs to build a national wireless network for the next generation to compete against China because that country has a government-dominated system. “That’s fairly scary, especially from an administration that a lot of people thought was going to promote American business and the private sector.”

“There’s no simple answer” to the issues of network security, speed, coverage, and so forth, Werbach said. “Thinking that there’s a simple answer to this is itself an indication that someone who is in a position where their job is to be smart about this and to understand it deeply, just doesn’t get it — that, to me, is the scariest thing in this story.”

The memo was “an attempt to address multiple perceived problems with a silver bullet-type of solution, except the bullet is neither silver nor a solution,” said Matwyshyn, who is also an affiliate scholar at the Center for Internet and Society at Stanford University.

Memo Motivations

Matwyshyn listed three concerns that may have prompted the idea of setting up a national mobile network. The first is the rising threats to telecom and computing security as seen by the numerous data breaches in recent years, she said. However, that issue is best solved with “supply chain integrity … and is a complicated separate conversation,” she added.

The second concern, Matwyshyn said, is “the comparatively diminishing quality of U.S. internet access,” explaining that the U.S. is “falling behind the world” in the quality and speeds of internet access. That could probably be resolved through “facilitating more robust competition, stimulating municipal Wi-Fi networks or [other] methods of [improving] internet access provision that we haven’t really tried,” she added.

Competition with other countries in the business space is perhaps the third factor the memo’s author considered, but that again “is another set of complicated issues,” Matwyshyn said. “I think it was someone who had read a little bit about each of these issues and was trying to aggregate them in a way that resulted in a sub-optimal policy proposal.”

“In terms of PR, and in terms of other companies and other countries around the world looking at this, it looks like a capitulation; it looks like saying China’s got it right.”–Kevin Werbach

As it happens, the technology being spoken of is itself a gray area. “It is not entirely clear to anyone what 5G means,” said Werbach. “It’s a marketing name for the next generation of wireless technology. [Telecom] carriers can deploy a higher-speed wireless technology and say this is 5G, so we’re going to see things called 5G rolling out within the next 18 months. But whether it’s really a significant leap forward from the existing 4G networks is open to question.” He expected such upgrades to telecom technology to be deployed “pretty robustly” globally over the next five years as providers respond to the increasing demand for wireless services.

U.S. Wireless Connectivity ‘A Big Issue’

Werbach agreed with Matwyshyn on the relatively poorer state of U.S. telecom quality and speeds, and described it as “a big issue.” He said market competition among private firms should in the normal course result in more robust, high-speed internet connectivity. However, the industry in the U.S. is dominated by “a very small oligopoly of a handful of major firms that own the wired and wireless infrastructure, such as Comcast, AT&T and Verizon,” he pointed out. He noted that some other countries are more focused on these issues, “ensuring that they can leapfrog us in connectivity.”

The U.S. telecom industry doesn’t appear to be ready for those challenges for other reasons as well. For one, “there are worrying signs that the competition dynamics are not as healthy as they used to be,” said Matwyshyn. Citing customer satisfaction surveys, she noted that internet service providers “are not universally beloved,” and that “they often rank below members of Congress or used car salespeople in the satisfaction level.” She saw that as “a warning sign that there’s something not customer-oriented going on.”

Ways to Tackle Net Security

In addressing national security concerns, it is not advisable to leave the provision of wireless services to a single private company or a government-controlled network, said Matwyshyn. “The key to security is redundancy. You always want to have multiple ways for citizens to get access with multiple different technologies. If your adversaries attack one and take down one [network], there is a backup system that citizens can turn to make sure that they’re getting the best information about how to protect themselves and their families.”

“Security is always going to be a challenge because it’s a challenge at the end points, it’s a challenge in the networks, it’s a challenge now with state-sponsored actors and so forth.”–Kevin Werbach

Security of the networks is “a huge, multifaceted issue,” but it is not something the government could realistically provide in all the dimensions required, Werbach said. “Security is always going to be a challenge because it’s a challenge at the end points, it’s a challenge in the networks, it’s a challenge now with state-sponsored actors and so forth. It needs to be built into the processes at every stage in building these networks and building applications and using them.” If the government were to control it, then it would create “a single point of failure,” which would be exactly the wrong way to approach it, he added, agreeing with Matwyshyn on that aspect of vulnerability.

“Supply chain integrity” is what will eventually ensure security, said Matwyshyn, adding that all industries strive to achieve that. “The idea is that if you have any components in a system that were built by a potential adversary, that adversary may have introduced a vulnerability that will allow them to attack the system,” she explained.

Matwyshyn said the U.S. telecommunications industry does not have “high degrees of quality control and verification” for imported components, and so “it’s possible that at some point in the future we will see a hidden vulnerability leveraged to do damage to that particular system.” Therefore, she argued that it might not be a bad idea to manufacture those components in the U.S. “It is a win from a security standpoint,” she said. “It’s also an employment program for U.S. citizens.”

A Case for Municipal Wi-Fi

Municipal Wi-Fi would help provide “a baseline of access” for citizens and local businesses in remote or rural areas where conventional providers may be absent, said Matwyshyn. Here, the government could help with incentives for build-out of networks. Admittedly, such internet access wouldn’t have the same caliber as that from a provider of high-speed connectivity, but that would fill a crucial gap “until or unless a private partner shows up and is willing to collaborate on building a network,” she added.

Matwyshyn offered the example of Vienna, Austria, where a municipal Wi-Fi network brought new business to the city’s famed cafes that were on the verge of dying. “If you were a traveler in Vienna, Austria today, you know that getting access to the internet is not a problem because the downtown area is basically blanketed with a functional network.” Similar examples are available from other countries that the U.S. could learn from, she added.

However, Matwyshyn said that numerous attempts to set up municipal Wi-Fi in the U.S. have met with “targeted resistance from [the telecom] industry, trying to discourage and sometimes litigate out of existence local attempts by interested parties in setting up ways for their citizens to connect to the internet.” She noted that municipal Wi-Fi is particularly important in rural areas that have inadequate internet penetration, because it would help them with employment prospects, in addition to recreational uses.

“If you don’t have a robust set of internet access points throughout the country, the trust that’s required to maintain this next generation of always-on, always-connected innovation is simply not going to be there.”–Andrea Matwyshyn

Need for Open Networks

According to Werbach, the issue is not so much about internet speed anymore. In a world where users are gravitating towards technologies around the Internet of Things, the focus is shifting to aspects such as different kinds of networks and lower latency, he said. “For that kind of evolution, we really need a more competitive market.” He noted that AT&T, Verizon and Comcast could today provide “a very high-speed wireless pipe” if customers want that, but added that it would be more expensive compared to global standards and not ubiquitous as well.

It is also important to have open internet networks, said Werbach, pointing out that the Trump administration’s decision to remove Obama-era net neutrality rules could potentially get in the way of that. “Basically, they’ve allowed the companies that are providing internet access total freedom to block and discriminate and manipulate traffic on the network,” he added. “[The U.S.] is falling behind the world [and is] an outlier in terms of not having an idea that the internet has to be an open platform.”

Werbach said he did expect those internet service providers to behave responsibly and not act as censors of content. At the same time, in order to maximize the potential of networks, he wanted “a basic foundation that says this needs to be an open network that allows for new applications and innovation.”

Matwyshyn said that in the debate over the Trump administration’s memo, “the concern is not just about the mechanics of internet access — it’s about the next generation of innovation.” If the issue of internet access is not fixed, the U.S. would fail in building the automated infrastructure that new technologies will require.

Matwyshyn pointed out that the Food and Drug Administration has been approving new uses for internet-connected devices, including pills and artificial organs. “In order for that kind of innovation to be supported and functional, you have to have a robust U.S. internet infrastructure where critical security updates can be pushed to your [artificial] pancreas when you need them, where your car can get critical security updates quickly, and where the navigation maps are updated on an expedited basis,” she said.

“If you don’t have a robust set of internet access points throughout the country, the trust that’s required to maintain this next generation of always-on, always-connected innovation is simply not going to be there,” Matwyshyn continued. Along with that, the U.S. would also fall behind in the very industries where it led the internet revolution, she warned.

U.S. vs. China

Werbach saw the memo as an agreement by the White House that China understands how to deal with internet security with its state-supported enterprises and that the U.S. should copy that model. “In terms of PR, and in terms of other companies and other countries around the world looking at this, it looks like a capitulation; it looks like saying China’s got it right,” he said.

“This was an attempt to address multiple perceived problems with a silver bullet-type of solution, except the bullet is neither silver nor a solution.”–Andrea Matwyshyn

“[China’s] argument is that the U.S. historical model of unleashing the private sector with robust public interest protections is the wrong model, and their model is better,” said Werbach. However, he rejected China’s model. “The idea of having freedom and having the private sector lead is the right approach for innovation,” he said. “But we’ve got to do all the things that Andrea was talking about, and that we’ve been talking about in this conversation, to actually allow that innovation to happen.”

As it happens, the FCC agrees with that approach. “The main lesson to draw from the wireless sector’s development over the past three decades — including American leadership in 4G — is that the market, not government, is best positioned to drive innovation and investment,” FCC chairman Pai said in his statement. “What government can and should do is to push spectrum into the commercial marketplace and set rules that encourage the private sector to develop and deploy next-generation infrastructure.”

Matwyshyn predicted that there would be “points of tension” along that path. “That is why the age-old axiom of ‘personnel is policy’ continues to be true and is the central piece here,” she said. Experts need to consider the different issues raised by the memo and identify the best approaches to resolve them, while also nurturing U.S. leadership in innovation, she concluded.