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CHAPTER VI - RECOMMENDATION 2. Supporting Innovation and Infrastructure

The second group of recommendations have the goal of spurring innovation and investment through initiatives that create jobs, capture lost opportunity costs of not making necessary infrastructure investments, and solidify U.S. global communications and technology leadership. The recommendations are framed to encourage public/private collaborations, to maximize existing resources and to encourage efficiencies, and support inclusion and expanded access.

RAMPIT. The first recommendation intended to spur innovation calls for the creation of a new public-private partnership to sponsor basic scientific research on advanced wireless and other technologies. Somewhat facetiously given the name, the Advanced Research Project for Mobile Platforms and Information Technology, or “ARMPIT,” this new research organization was described (non-facetiously) as a “Bell Labs model for the 21st Century” to be funded with a portion of the proceeds from the government’s spectrum auctions. On reflection, we will rename it, more accurately, as the Research Alliance for Mobile Platforms and Information Technology, or RAMPIT.

One potential initiative for RAMPIT would be to fund a 5G Test Cities program that would establish labs in one or more cities where 5G technologies could be deployed for evaluation in a real-world environment. (In July 2016, the Obama administration announced an Advanced Wireless Research Initiative that included $85 million, including $50 million from the National Science Foundation, to design and build four city-scale wireless testing platforms.)

Tax Incentives for Infrastructure Investments. The group also recommended providing tax incentives for investments in infrastructure. They based this on the premise that because of the wide impact of broadband on many sectors of society, externalities from broadband investments generate societal rates of return that exceed private ones. Therefore, without some form of stimulus, investments in telecom infrastructure and innovation are likely to be less than optimal. One option to promote critical investments in high cost (e.g., rural) areas would be to offer a 20 percent tax credit for investments in unserved or underserved areas. Another incentive would be to allow accelerated first year expensing of capital investments in next-generation network infrastructure.

Spectrum and Mobile. Another critical ingredient to support continued innovation and investment, beyond sufficient capital, is ensuring the availability of enough spectrum for wireless communications. The FCC’s recent Spectrum Frontiers decision, which opened nearly 11 GHz of spectrum above 24 GHz for mobile use, was an important first step. But more needs to be done to meet the seemingly insatiable demand for wireless communications. The Aspen conference called for continued efforts to provide additional spectrum, both licensed and unlicensed, for both mobile and fixed uses, particularly in the high frequency millimeter wave (mmW) bands that will be vital to next generation 5G networks. This will certainly involve action to more free up federally controlled spectrum and development of new models for spectrum sharing.

Other needed initiatives to ensure the timely and cost-effective deployment of new infrastructure will include action on multiple levels to accelerate the deployment of what will be a much larger number of small 5G cell sites that make use of high capacity, short range millimeter-band (mmW) spectrum and that may cover areas as small as a single room. This will involve setting rules for access to utility poles and rights of way and to buildings, and streamlining—or possibly pre-empting—local permitting processes and/or setting deadlines to ensure timely decisions on cell siting. Another important policy step often recommended in the past but not fully implemented, is a “dig once” rule that would ensure that when roads are built or repaired or when other construction projects take place, they will make provision for installing conduits that can be used to carry wiring for telecom in order to preclude the need for repeated excavations for this purpose.

To advance these proposals, the group called for passage of federal legislation like the Mobile Now Act, which includes a dig once mandate, a shot clock for decisions on siting applications, a mandate to make additional spectrum available for commercial use, and incentives for innovations that would improve spectrum efficiency. The bill was introduced in the Senate by Senator John Thune (R-SD) in February 2016, and received unanimous approval from the Commerce Committee in March, but had not been passed by either house as of this writing.

International. Finally the group called on the U.S. government to act decisively to protect continued innovation and confront a new wave of international “neo-mercantilism” designed to give foreign competitors an unfair advantage over American firms. This would include creating a new White House Directorate of Trade and Competitiveness as part of the National Security Council’s International Economics team. This new group would be responsible for identifying and directing the use of all agencies’ foreign policy tools against emerging free trade threats, and author/execute on a broader strategy to solidify market-based approaches in global trade deals and relationships. For example, the Directorate would coordinate cross-agency efforts to ensure that emerging international standards do not disadvantage U.S. companies in the global market.

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