Newt Gingrich, 5G, China, and Capital: Nationalist policy doesn’t contribute to long-run Black community sustainability in the long run.

The Eye Catcher …

In an opinion piece posted earlier today, former Speaker of the U.S. House of Representatives, Newt Gingrich (R-Georgia), proposed that the U.S. government provide for a national 5G wholesale network, constructed by a private party. The network would be “carrier-neutral”, according to Mr. Gingrich, and help the U.S. beat China in the race for 5G wireless dominance.

Mr. Gingrich and the Trump Administration are concerned that China through state-subsidized firms such as Huawei and ZTE will be able to continually extend their smartphone and telecommunications manufacturing ability globally.

Mr. Gingrich sees a number of benefits flowing to America as a result of a nationalized 5G network, including the spurring of microelectronics manufacturing; accelerated deployment of next-generation networks; and the demonstration that China’s dominance in 5G is not a foregone conclusion.

It amounts to a nationalism play … that benefits capital

Based on his article, Mr. Gingrich would like to see a national 5G network in place so that telecommunications device and hardware makers can test drive new offerings.  If Huawei, ZTE, or other Chinese firms can get their product to global markets first, the United States will be in a hard place competition wise, trying to put 5G technology in the markets of multiple countries that may not have a problem with ZTE’s relatively inexpensive Android phones, subsidized, in part, by the Chinese government.

The above point is made in an article by Vlad Savov in The Verge.  Citing data from Canalys, a market analysis firm, Mr. Savov describes Europe as a market ready for price competitive wireless products offered by Huawei and sister Chinese firms Oppo and Xiaomi.  The political antipathy held by the United States toward China is not apparent in Europe with roughly 32% of smartphone shipments to Europe coming from Chinese firms.

But let’s suppose that a nationalized 5G network was built in the U.S. Who would gain the most from Mr. Gingrich’s proposal? I believe the greatest benefit would go to the wealthy, primarily those holding shares in telecommunications companies, other internet core companies, and internet edge companies.  A significant number of Blacks would not see the spoils that would flow to shareholders.  The vast majority of Blacks do not own stocks directly.

According to 2002 data by the Social Security Administration, the percentage of Blacks owning stocks directly was approximately nine percent compared to 36% of whites.  By 2014, the percentage of Blacks owning stocks had fallen.  According to data collected by the United States Census Bureau, approximately 5.2% of Blacks owned stocks or mutual fund shares.

Reduced access to components means greater difficulty for Black communities to innovate …

Google Fiber has been in Atlanta for a few years now, but they never deployed in my neighborhood which has a high Black population. Atlanta has its share of Black engineers as well as a few Black entertainers, businessmen, and investors capable of developing and deploying innovative communications technology.  Ideally, Black communities like those in Atlanta should be designing their own technologies, especially given their access to local teaching and research universities.  But if a nationalist policy toward Chinese telecommunications manufacturers limits access to affordable devices and hardware, that would only put a strain on Black community capacity to be resilient, self-sufficient, and sustainable.

Conclusion …

With all the talk of the negative impact of the digital divide on the Black urban community, “telecommunications nationalism” does not serve Black people well. Telecommunications nationalism does not send more capital to Black communities and does not facilitate technological sustainability.  It is not a policy that Blacks should get on board with.

 

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