Financing 5G Rollout in the Face of Nation State Security Threats and Non-Market Subsidies: Policy Options for States to Address Cost Concerns
12 Pages Posted: 8 Mar 2020
Date Written: February 13, 2020
The debate about non-market authoritarian telecom manufacturing firms subsidization and security risk continues to rage but there has been almost no talk about the benefits they provide and how to counter them by open liberal democracies. In this paper, provide a simple financial model of the range of cost differences between market and non-market telecom manufacturers. I then provide different policy options for states of how best to address these concerns. Pleas to national security and alliances will only go so far given the large subsidized cost differentials between market and non-market providers. There are numerous reasonable policy options that will narrow the cost differentials such as moving from cash spectrum auction to royalty, funding risk mitigation with tax on high risk gear, and multilateral lending currently disallowed by the OECD to fund critical infrastructure. Importantly, global 5G financing could be provided by the United States for less than $5 billion capital allocation.
Keywords: 5G, infrastructure financing
JEL Classification: L63, L78
Suggested Citation: Suggested Citation