Larry Kudlow, director of the U.S. National Economic Council, is batting down independent analysts that have roundly determined the U.S. is and is likely to continue lagging behind China on 5G. 

“America is doing very well on 5G. People are always way too pessimistic, how we’re losing to China and this and that. It’s not true. We’re doing just fine. Our technology advances are the best in the world. They remain so,” he said today during a presentation at this week's GSMA Thrive event.

The Trump administration and policy wonks throughout the government are “working very hard” to overcome issues around privacy, security, technology, and market changes as a result of 5G, Kudlow said.

Much of that effort is fueled by what Kudlow described as international outreach and a blossoming of software in network infrastructure. The administration’s approach also includes policies designed to incentivize faster 5G network deployments, and a steady stream of spectrum auctions and a lighter regulatory touch in partnership with the Federal Communications Commission (FCC), he said.

“In fact, after quite a discussion we have agreed, or worked in agreement with the Department of Defense, that we will auction off 100 megahertz of mid-band spectrum. We’ll get that done sometime next year and that’s going to give us a big boost in the mid-band area, which will stretch us out” beyond urban areas, Kudlow said. 

That proposal to reallocate spectrum owned by the Pentagon is still mired in controversy and not a foregone conclusion. The Trump administration has floated and backed away from various plans that would augment how consumers and enterprises gain access to licensed spectrum. 

The federal government’s heavy-handed approach, as with all things related to the economy, is still slanted in accordance with a general distrust of the Chinese government and companies based there. “A number of our allies have decided to essentially throw in with the American approaches, and they have rejected the non-market Chinese Huawei approaches,” Kudlow said. 

He framed it as a matter of technology and national security for the U.S. and its allies. “I think we will be just fine,” he said, applauding similar decisions taken in the United Kingdom, Australia, Japan, and Sweden to ban Huawei from their respective networks. 

Kudlow also highlighted the growing importance and role of software in networks, often to the detriment of some pieces of legacy hardware. “That doesn’t mean hardware is going to end, but it does suggest that the commercial marketplace for 5G and related technologies is really moving toward innovation, moving toward an open [radio access network] approach, moving toward huge, fast speeds,” he said. 

Networks built with more software, cloud technology, and virtualization might ultimately be cheaper, but it also requires continued caution about security “because we don’t want the Chinese or other non-allies, I’ll call them that, to be able to get into our systems and steal our information,” Kudlow said. “This whole market trend toward virtualization is a great thing. We have huge American innovators and they’re clearing the way towards changes.”

That vision is, at least in part, buoyed by restrictions the U.S. government has imposed on Chinese vendors but Kudlow claims that those policies still adhere to free market principles.

“Over the last bunch of years, we've made many strides and successes toward getting 5G out, toward realizing progress in 5G, toward spreading it, toward spreading the gospel of new software, and cloudware, and virtualization approaches. I dare say in the post-pandemic world, all of this becomes even more important,” he said.

“We need to work together,” Kudlow added. “The Trump administration is going to keep its free market approach, and we will rely on the private sector, entrepreneurship, and science, and technological advances, which is the stuff that makes America great.”