Engagements

Economic impacts of delayed 5G deployment and adoption in the US

Dr. Debra Aron advised Jones Day, Morgan Lewis, and Huawei Technologies Co., Ltd.  and wrote two reports submitted to the FCC providing analysis and quantification of the effects on the US economy of excluding Chinese manufacturers of radio access network (RAN) equipment from the US market and of delayed deployment of mid-band spectrum in the US.

Dr. Aron conducted economic and econometric analysis using data from seven countries on their adoption of 4G wireless services to estimate the effect of adoption of 4G on the country’s GDP, controlling for other factors.  Applying the regression results to 5G networks, Dr. Aron was able to estimate the anticipated effect on the US economy of delaying deployment of 5G networks on US GDP over the 2019-2024 period. She found that a 6-month delay would decrease US GDP by $104 billion over the 6-year period and an 18-month delay would decrease US GDP by $241 billion over the same period.  She also found that delayed 5G deployment would depress employment in the US by 25.2 thousand jobs in 2019 and by up to 50.3 thousand jobs in 2020, depending on the duration of delay.

In addition, Dr. Aron found that the absence of Chinese manufacturers of radio access network (RAN) equipment from the US market has materially increased market concentration in the US, resulting in prices for RAN equipment that are 12.6-16.0 percent higher on a weighted average basis than they would be with the competition provided by Chinese firms.

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