Building towers in new areas the smartest infrastructure subsidy

Joe Biden and Kamala Harris are about to spend tens of billions unnecessarily building duplicate networks. The wireless industry is demanding subsidies for areas that almost certainly will be covered by 5G without government money. Essentially every cell tower with backhaul will be upgraded with a 5G radio.

But there are very few towers being built in areas not already covered. A 25-75% subsidy would make many profitable. It’s the only broadband spending unlikely to duplicate things.

Mark – Verizon CTO Dick Lynch in 2009 building LTE decided to put a radio on any tower with backhaul that wasn’t overpriced. The result was the side by side maps showing Verizon coverage much better than AT&T, which had to scramble to catch up.

Neville’s plan at TMO looks the same, although I haven’t spoken to him. I’m pretty sure VZ and then T will try to come close.

Radios are relatively cheap – Ericsson M-MIMO in China >$25K, probably twice that in less competitive US. So almost all the towers will get radios, even without subsidy. (My opinion)

So the only sure way to spend subsidy money without waste is on towers and backhaul currently not covered.

As I’m reporting at Fastnet.news, cable upstream is about to go to 100+ Mbps. Bringing in a second carrier nominally would add “competition,” but it usually takes 4-7 companies for the miracles of a competitive market to work well. Scott Wallsten, who was Chief Economist of the US Broadband Plan, just published a study that makes clear that two carrier pricing is about the same as a monopoly.

The 5-10% of the country that can’t get cable or fiber needs close study and in some cases a subsidy, but that would require only a small fraction of the $70-100 billion contemplated by the infrastructure build.

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