NSC Suggests Federal Takeover of Wireless Internet

WASHINGTON (CN) — A National Security Council memo calling for a government-built 5G next-generation mobile network is in the “earliest stages of conversation,” the White House confirmed Monday.

The NSC memo, leaked through news outlet Axios on Sunday, proposes the de facto nationalization of a 5G network, a significant shift in the Trump administration’s industrial policies, which heavily favor free-market initiatives over federal investment.

White House press secretary Sarah Huckabee Sanders said Monday the administration is in  the “earliest stages” of talks on the network but denied that any decisions have been made on what the network would look like or “what role anyone would play in it.”

The purpose of building the network, according to the memo, was to could guard against state-sponsored cyber attacks by China. Sanders echoed this Monday, saying the council “simply [acknowledged a] need for a secure network.”

Fifth generation, or 5G wireless standards, are expected to set transmission speeds in megabits per second, through hundreds of thousands of simultaneous connections, with better reception in more areas, with less delay, and other standards.

Telecommunication regulators and industry lobbyists largely opposed the proposal Monday.

Federal Communications Commissioner Ajit Pai, a Republican appointed by President Trump last year, issued a statement opposing any federal plan to build and operate a nationwide 5G network.

“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 the government, is best positioned to drive innovation and investment,” Pai said.

The other FCC commissioners also panned the proposal.

Telecom industry leaders are already developing 5G technology with an emphasis on better smartphone internet access standards. That technology is also pushing the advent of applications such as self-driving cars. At the tech sector’s current rate, this could be achieved by 2020, The Associated Press reported Monday.

On Jan. 4, AT&T said it would connect 12 locations in the U.S. to 5G service this year.

Tech industry group USTelecom also pooh-poohed the proposal Monday. Its CEO Jonathan Spalter said “nothing would slam the brakes” more quickly on the race for 5G deployment than federal intervention.

The administration’s consideration of a possible shakeup to the internet coincided with other tech activity in Washington: the State of the Net conference at the Newseum. There, the public and private sector met to discuss internet policy with emphasis on a decentralized global internet.

House Energy and Commerce Committee Chairman Greg Walden, R-Ore., told the conference that the idea of a nationalized network seems irrational when the government cannot secure the data of its own employees.

“I struggle with the notion it’s going to run a complete architecture and network that will be hack-free,” Walden said. “Nor do I think it’s in the best interest of the kind of culture and economy that we have here that believes in capital investment from the private sector.”

With “bad actors” attempting to infiltrate U.S. networks daily, he expressed support for a public-private partnership.

“Government taking it over, controlling it, is clearly not the way to go,” Walden said.

FCC Chairman Jessica Rosenworcel, a Democrat who opposed Pai’s proposal to reverse net neutrality last year, delivered the keynote address at the Monday conference.

While Rosenworcel did not address the nationalized network proposal, she did echo concerns for the government’s lack of cyber security on networks connected to the federal rulemaking process.

The most flagrant examples, she said, were the millions of fraudulent public comments submitted to the FCC last year as it weighed killing net neutrality rules.

Net neutrality, an Obama-era policy that barred internet service providers from creating preferred lanes for customers, received widespread criticism through the allegedly public comments. The commission received 25 million comments in the 60-day comment period.

An investigation led by New York Attorney General Eric Schneiderman confirmed at least 2 million of those comments were fraudulent or were instances of identity theft.

Asked why the FCC would accept so many fraudulent submissions, the commissioner said she did not have an answer.

“But it is incumbent to agencies in Washington to get to the bottom of it,” she said. “We have to build systems that can withstand the assault and we need to know where this is all coming from.”

In some cases, those origins are known: 500,000 comments were connected to addresses in Russia, Rosenworcel said.

The way to address these vulnerabilities is to find outside experts to look at the records and identify the problems, she said.

Deputy Attorney General Rod Rosenstein also attended the conference, where moderators kept questions addressed to him, a key figure in the Russian influence-peddling probe,  limited to encryption threats plaguing ISPs and the law enforcement agencies tasked with removing threats to cyber security.

News of the leaked National Security Council memo did not come up during Rosenstein’s panel, but in a moment foreshadowing the broad rejection of the administration’s proposal, Rosenstein gave his take on the level of government intervention in this arena.

“The biggest threat is the threat of cyber hacking and intrusions,” he said. “Federal agencies are engaged and working on their own. Some of [the intrusions] are from foreign state actors. [They’re] espionage efforts, commercial hacking efforts. Some are criminals out to extract ransom or extort corporations. We need to continue to improve our cyber defenses so we can help private sector protect themselves,” Rosenstein said.

“It’s an ongoing battle, and we never reach a point when we’ve actually solved it. That’s the biggest challenge in law enforcement, but we’re working cooperatively with the private sector and it’s our goal to make sure you can develop technologies, so you won’t need to call on us.”

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