5G Deployment: FCC Needs Comprehensive Strategic Planning to Guide Its Efforts

As the latest generation of mobile communications, 5G networks are expected to provide faster connections to support consumer, industry, and public sector services. While private sector carriers deploy 5G networks, FCC has a role in managing deployment challenges, such as how to allocate low-, mid-, and high-band spectrum for 5G use.

GAO was asked to review 5G deployment challenges. This report examines challenges and the federal government's efforts related to 5G deployment with regard to managing spectrum for 5G and closing the digital divide, among other things. GAO, with assistance from the National Academies of Sciences, Engineering, and Medicine, convened a meeting of 17 experts from academia, industry, and consumer groups; reviewed relevant statutes, literature, and FCC documentation; and interviewed FCC and other relevant federal officials, along with stakeholders that include various localities, wireless carriers, and industry associations.

Approximately every 10 years since the early 1980s, wireless carriers have deployed a new generation of wireless communication technology. This decade is no different, as carriers are now developing and deploying 5G networks, which offer greater speed and higher data capacity than previous generations of mobile wireless networks. Carriers in the United States are currently deploying “hybrid” 5G, which uses 5G technologies in combination with existing 4G networks to improve the networks' speed. In the future, carriers may deploy “standalone” 5G, which relies exclusively on 5G equipment to allow for additional enhanced capabilities (see fig. 1).

Radio frequency spectrum is a finite natural resource used to provide a variety of communication services to businesses and consumers, as well as to federal, state, and local governments. The frequency bands—often referred to as low-band, mid-band, and high-band spectrum—have different characteristics that make them more or less suitable for specific purposes.

Experts GAO convened said that mid-band spectrum is highly congested, leading to an insufficient amount available for carriers to deploy their 5G networks in the United States. The experts stated that to avoid delays in 5G deployment, the commercial sector needs access to more mid-band spectrum.

These experts highlighted the need for mid-band spectrum for 5G due to mid-band's use internationally and because of its properties. Mid-band spectrum allows for higher data capacity than lower bands and can penetrate physical obstacles over long distances—a property known as “propagation”— better than higher bands (see fig. 2).

The Federal Communications Commission (FCC) has some efforts under way to make additional mid-band spectrum available but so far has primarily made high-band spectrum available for 5G because it is more readily available. Making more mid-band spectrum available to the commercial sector will be challenging, as current mid-band spectrum users include federal government users that may not be able to readily transition to new or less favorable spectrum bands.

FCC's planning document for 5G includes a section on making additional spectrum available but does not clearly identify specific and measurable performance goals or measures to manage the spectrum demands for 5G. Without such strategic planning efforts, FCC will be unable to determine the effectiveness of its spectrum management efforts, particularly related to the congested mid-band spectrum that is critical to 5G deployment.

The experts GAO convened also stated that 5G deployment would likely exacerbate disparities in access to telecommunications services, known as the “digital divide.” Specifically, experts as well as stakeholders GAO interviewed said that 5G using high-band spectrum—which allows for high data capacity—is likely to be first deployed in areas already equipped with much of the necessary infrastructure.

Experts said the areas with existing infrastructure are generally urban, densely populated, high-income areas as opposed to rural or low-income areas. Further, within urban settings, experts said that high-band 5G networks are more likely to be deployed in commercially viable areas, including those parts of a city that already are equipped with fiber and power and, presumably, already benefit from the most advanced mobile broadband services available.

FCC has taken steps to address the digital divide, including a recent announcement to make up to $9 billion in funding available to carriers to deploy 5G in rural areas of the United States. However, FCC has not developed specific and measurable performance goals with related strategies and measures to assess how well its actions are mitigating the added effects 5G deployment will have on the digital divide.

FCC should develop specific and measurable performance goals with related strategies and measures to: (1) manage spectrum demands for 5G and (2) determine the effects 5G deployment and any mitigating actions may have on the digital divide. FCC indicated that setting spectrum goals could unnecessarily limit its options but did not agree or disagree with GAO's recommendations. GAO continues to believe that well-considered strategic planning would benefit FCC's efforts.

The fifth generation of mobile communication networks (5G) is expected  to provide faster connections to support consumer services (e.g., video  streaming, autonomous vehicles), industry (e.g., advanced  manufacturing), and the public sector (e.g., smart cities). Deployment of  5G could bring new jobs, and potentially billions of dollars in economic  benefits, to the United States. In addition, the need for reliable wireless  communications takes on new importance to all Americans during times  of social distancing, when we must rely on communications networks for  such things as distance learning, telework, and telemedicine. However,  wireless carriers and governmental bodies throughout the U.S. face  several challenges as 5G networks are deployed.

Several federal agencies play a role in enabling the deployment of 5G  networks. For example, the Federal Communications Commission (FCC)  manages radio frequency spectrum allocation and licensing for  nonfederal users, and the National Telecommunications and Information  Administration (NTIA), an agency within the Department of Commerce,  manages spectrum for federal users. In addition, multiple federal  agencies currently occupy and use spectrum that could be well suited for  supporting 5G deployment.

You asked us to identify challenges to deploying 5G and the ways the  federal government is addressing those challenges. This report examines  challenges and the federal government’s efforts related to 5G deployment  with regard to: (1) managing spectrum; (2) closing the digital divide (i.e.,  addressing equity issues); and (3) addressing economic issues.

To address these objectives we reviewed relevant statutes and literature,  and FCC and NTIA documentation. We also interviewed FCC and NTIA  officials, as well as relevant stakeholders, including wireless carriers and  industry associations. Additionally, we issued a brief questionnaire to  approximately 150 GAO-identified stakeholders with knowledge of 5G  networks (e.g., representatives from the federal government, academia,  industry, and consumer groups) to identify challenges to deploying such  networks in the U.S. These stakeholders were identified by reviewing  previous GAO reports and through background research and were  selected to provide a range of perspectives on 5G deployment. We  reviewed and consolidated responses. We then convened a one-and-a- half day meeting of 17 experts from academia, industry, and consumer  groups to discuss the challenges identified through the questionnaire, as  well as potential actions the federal government could take to address  those challenges. We selected these experts with assistance from the  National Academies of Sciences, Engineering, and Medicine to obtain a  range of perspectives on 5G deployment. We also interviewed four  localities about their experiences with 5G deployment, which we selected  based on, among other things, cities where wireless carriers have  announced they will launch 5G services. The information we obtained  from these interviews is not meant to be generalizable to other cities’  experiences but is meant to provide illustrative examples of actual 5G  deployment. We compared FCC efforts to address 5G deployment  challenges to FCC’s own strategic goals, relevant leading practices for  performance management identified in our prior body of work, and the  requirements of the Government Performance and Results Act (GPRA)  as enhanced by the GPRA Modernization Act of 2010 (GPRAMA). See  appendix I for a detailed description of our objectives, scope, and  methodology, including a list of interviewees.

We conducted this performance audit from February 2019 to June 2020  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

Mobile devices, such as smartphones and tablets, use wireless networks  to enable voice and data communications. These wireless networks  comprise several components. For example, cell sites—a base station  equipped with an antenna—receive and transmit radio signals to mobile  devices. In addition to traditional “macro cells,” 5G networks also use  smaller wireless infrastructure, known as “small cells,” which can be  installed on existing structures, including macro towers, buildings, utility  poles, or streetlights. Base station controllers manage communications  between the cell site and the mobile switching center, or the “core  network.” The core network then directs the communication to landline  phones, other cell phones, or the internet. Finally, backhaul facilities, such  as fiber optic cables or microwaves, transport the communications (See  fig. 1.).

Cell sites use radio frequency spectrum to receive and transmit radio  signals to and from mobile devices. Spectrum is a finite natural resource  used to provide a variety of communication services to businesses and  consumers, as well as federal, state, and local governments. Businesses  and consumers use spectrum for a variety of wireless services including  mobile voice and data, Wi-Fi- and Bluetooth-enabled devices, broadcast  television, radio, and satellite services. Federal, state, and local  governments’ uses of spectrum include national defense, law  enforcement communication, air traffic control, weather services, military  radar, and first responder communications.

The frequency bands have different characteristics that make them more  or less suitable for specific purposes. For example, different bands have  different limits to the amount of information that they can carry, known as  “data capacity,” and different levels of ability to effectively penetrate or  bend around physical obstacles and cover distances, known as  “propagation.” Regarding wireless communication:

Low-band spectrum (generally defined as under 1 gigahertz (GHz))  typically has relatively low data capacity but has propagation  characteristics that enable transmission over longer distances and  penetration of buildings and other physical barriers better than higher  bands.

Mid-band spectrum (generally defined as between 1 GHz and 6 GHz)  tends to provide greater data capacity than low bands and has better  propagation qualities than higher bands.

High-band spectrum (generally defined as those above 24 GHz)  allows for high data capacity but has relatively limited propagation, to  the point that bands at higher frequencies (according to FCC, those  above 95 GHz) are most prone to obstruction by natural or manmade  objects, such as trees or glass.

In the United States, two federal agencies are primarily responsible for  managing spectrum. FCC is the federal agency responsible for allocating  spectrum for consumer and commercial purposes (as well as state and  local government uses), assigning spectrum licenses to those entities,  and making spectrum available for use by unlicensed devices. Licensing  assigns frequencies of spectrum, in a specific area, and—generally  speaking, according to FCC officials—to a specific entity, such as a  telecommunications company. NTIA is responsible for establishing policy  on regulating federal spectrum use. NTIA assigns frequencies to  government agencies, maintains federal spectrum use databases for  those assignments, and oversees, in cooperation with other relevant  federal agencies, which spectrum bands reserved for federal government  use might be made available for commercial use.

Approximately every 10 years since around the early 1980s, wireless  carriers have deployed a new generation of technology, and each  development has changed how people and businesses use mobile  communication. These technologies can bring greater speed and  capabilities to mobile networks and can provide new revenue streams for  carriers and economic gains for national economies. For example, a trade  organization representing carriers reported that U.S. leadership in  developing and deploying 4G brought in significant economic benefits,  adding billions of dollars to the U.S. economy.

The carriers we spoke with are currently developing and deploying 5G  networks, which will allow for enhanced mobile broadband, offering  greater speed and higher data capacity than previous generations of  mobile wireless networks. Carriers in the United States are currently  deploying 5G as “hybrid” 5G, which uses 5G technologies in combination  with existing 4G networks to improve the networks’ speed by enhancing  the technology that connects a user device to a core network. In the  future, carriers that want to deploy “standalone” 5G will have to replace  their existing 4G network infrastructure with new 5G equipment to  enhance the core network. The new, standalone 5G networks will allow  for additional enhanced capabilities, such as lower “latency,” and will be  better able to support other advanced use cases (see fig. 2).

Carriers have thus far deployed limited 5G services as hybrid 5G  networks in the United States, and are taking different approaches with  regard to spectrum use for 5G. For example, some carriers told us that  they are relying on low-band spectrum for their 5G network. Other carriers  are using high-band spectrum in limited locations. In both cases,  customers need to purchase new 5G-capable smartphones to use these  hybrid 5G networks.

In general, telecommunications networks, including mobile networks,  provide important economic and educational opportunities to  communities, but different socioeconomic groups and groups in different  geographic areas have historically received different levels of access to  telecommunications services, leading to a disparity called the “digital  divide.” A number of factors explains the digital divide. For example, as  we have reported in the past, rural areas tend to have conditions—such  as low population density or difficult terrain—that can increase the costs  for carriers to deploy and maintain networks. Furthermore, lower-income  households may have access to the necessary infrastructure for service  but may not be able to afford the service.

FCC Lacks Comprehensive Strategic Planning to Guide Spectrum Policy for 5G Deployment

Experts Identified Availability of Mid-Band Spectrum as a Key Deployment Challenge

Experts we convened told us that the lack of sufficient access to mid- band spectrum is a key challenge to deploying 5G, noting that mid-band  spectrum is particularly important for 5G deployment because of its  network characteristics and potential to be interoperable with other 5G  networks worldwide. Experts stated that the availability of mid-band  spectrum to carriers in the United States is not yet sufficient to meet  carriers’ needs for 5G network deployment because of existing  congestion within the band.

Experts stated that carriers will need a mix of low-, mid-, and high-band  spectrum when deploying 5G networks because of the network  characteristics unique to each spectrum band. For example, one expert  noted that mid-band spectrum provides 5G network characteristics that  cannot be achieved using solely low- or high-band spectrum. Signals  using mid-band spectrum have better propagation (i.e., ability to  effectively penetrate or bend around physical obstacles and cover  distances) than signals using high-band spectrum (see fig. 3) and carry  more data than low-band spectrum.

Global harmonization of spectrum, or the use of the same spectrum  bands among countries around the world, helps ensure that 5G devices  will work across countries. Countries that harmonize spectrum for 5G may  benefit by making international travel and communication more  convenient. For example, consumers from countries that deploy 5G using  the same spectrum bands will have the benefit of roaming across  networks. Spectrum harmonization also creates economies of scale that  can reduce the costs of manufacturing wireless devices and deploying  network equipment. Countries, including the United States, have  identified specific frequencies in mid-band spectrum that may be used for  5G.

However, experts told us that, as currently allocated, mid-band spectrum  is highly congested, leading to an insufficient amount available for carriers  to deploy 5G networks in the United States. According to NTIA officials,  current mid-band spectrum users—known as “incumbents”—include  federal government users that have primary access rights to the spectrum  and face challenges in readily transitioning to new or less favorable  spectrum bands. For example, agencies’ existing technologies may be  designed specifically for their existing spectrum bands. Additionally,  according to FCC officials, it is becoming increasingly challenging to  relocate federal users out of a spectrum band entirely and into a new  band due to a variety of factors, including concerns about potential  interference as well as greater spectrum use in recent years. According to  experts, large consecutive portions of spectrum will be necessary for  commercial users deploying 5G networks. Using smaller or non- consecutive portions of spectrum may limit the capability of the network.

FCC Has Taken Actions to Increase Spectrum Availability

According to FCC officials, FCC has taken several actions to make  additional spectrum available for carriers planning to deploy 5G networks.  Some examples of FCC’s actions to make low-, mid-, and high-band  spectrum available for 5G deployment include:

Low-Band: FCC concluded an auction in 2017 for low-band 600  megahertz (MHz) spectrum licenses, assigning 70 MHz for licensed  wireless operations. Such spectrum auctions allow FCC to use  competitive bidding to choose from among two or more applications  for a spectrum license.

Mid-Band: FCC issued a Report and Order in July 2019 that made  spectrum licenses within the 2.5 GHz band accessible to nonfederal  users.

High-Band: FCC held its first auctions for high-band 5G spectrum in  the 24 GHz and 28 GHz bands in 2018 and 2019. FCC also began an  auction of 3,400 MHz of spectrum in the upper 37, 39 and 47 GHz  bands in December 2019; bidding in this auction concluded on March  5, 2020.

FCC officials told us that they are aware that mid-band spectrum will be  particularly important for 5G deployment despite congestion amongst  federal users in this spectrum range. FCC is taking steps to make some  additional mid-band spectrum available. For example, in February 2020,  FCC announced that it had adopted new rules to auction 280 MHz of mid- band spectrum, which can be used for 5G purposes. This spectrum, (3.7  to 3.98 GHz) is currently being used primarily by satellite operators. In  March 2020, FCC released a public notice seeking comment on  procedures to be used for the auction of this spectrum, which is currently  scheduled to begin on December 8, 2020. As another example, according  to FCC, in April 2020 FCC provided for expanded Wi-Fi use in 1,200 MHz  of spectrum in the 6 GHz band. Such advanced Wi-Fi networks, FCC told  us, will be capable of working hand-in-hand with commercial networks to  enable robust 5G device broadband connectivity and may be able to help  alleviate commercial wireless network congestion. Other activities,  according to FCC, include: (1) opening a proceeding in the 3.1 to 3.55  GHz band to consider potential shared use between federal operations  and flexible use commercial services; and (2) authorizing a private entity  to deploy a low-power terrestrial nationwide network in certain  frequencies that will make available additional spectrum for advanced  wireless services, including 5G.

FCC and NTIA also developed a spectrum-sharing framework in the 3.5  GHz band that will increase the availability of this mid-band spectrum  targeted globally for 5G. This framework separates users into three  hierarchical “tiers,” giving differing priority access to the spectrum (3.55  GHz to 3.7 GHz, also known as the “Citizens Broadband Radio Service”)  depending on the user’s tier. The first tier includes incumbents, such as  federal users (e.g., U.S. Navy radar systems) and a number of  commercial users. These users receive first priority and protection from  all other users. Tier two users—referred to as “Priority Access  Licensees”—are, according to FCC, wireless users that obtain licenses at  auction or, following the auction, via secondary markets. These users,  which can include wireless carriers, have access to the same mid-band  spectrum when a tier one user is not using the spectrum, but FCC  officials said these users will need to move to another frequency when a  nearby tier one user accesses the same frequency. Third tier users  access the band as available.

FCC officials stated that this spectrum-sharing framework will allow for  increased spectral utilization of mid-band spectrum in a band like 3.5 GHz  and that individual users (e.g., the public using mobile devices) will not  notice any difference in their network connection. According to FCC  officials, the technology supporting this spectrum-sharing framework is  now authorized for full commercial deployment. They also said that FCC  certified administrators in January 2020 to coordinate this framework,  which will allow for full commercial operation, and that FCC has  scheduled to begin auctioning licenses for tier two users on July 23, 2020.

Other federal agencies are also involved with managing spectrum in the  United States. For example, NTIA, which manages federal spectrum use,  is working with FCC on the technical design and implementation of the  spectrum-sharing framework discussed above. NTIA is also seeking to  identify additional spectrum for 5G, in conjunction with FCC. According to  FCC, some of the most useful portions of mid-band spectrum are already  occupied by a federal incumbent and FCC is limited in its ability to make  this spectrum available for commercial use. According to NTIA officials,  the agency is focused on meeting the spectrum requirements set forth in  the Making Opportunities for Broadband Investment and Limiting  Excessive and Needless Obstacles to Wireless Act (MOBILE NOW Act)  of 2018, which requires NTIA and FCC to prepare a report by 2022  identifying potential spectrum for future use. For example, NTIA is  currently studying the feasibility of spectrum sharing in the 3.45 to 3.55  GHz band.

Overall, FCC’s efforts, in conjunction with NTIA, to date have primarily  made more high-band spectrum available for 5G purposes. According to  the Department of Commerce’s 2019 Annual Report on the Status of  Spectrum Repurposing, 84 percent (4,950 MHz out of 5,863 MHz) of the  spectrum made available by FCC and NTIA has been within high-band.  According to the report, 12 percent (709 MHz of 5,863 MHz) of the  spectrum FCC and NTIA have made available has been within mid-band.  NTIA officials said there has been more of a focus on repurposing high- band spectrum because there is a far greater amount of this spectrum  available for use and fewer incumbent users within this spectrum. Further,  NTIA officials stated that these amounts are a snapshot as of the time the  2019 report was issued and the ratios will change, as additional spectrum  is made available. Other recent FCC actions, including those described  above, may make more mid-band spectrum available in the future. For  example, FCC told us that it has a number of active proceedings that  could make additional mid-band spectrum available to commercial users.

FCC’s Plan to Guide 5G- Related Efforts Is Missing Key Elements of Strategic Planning

To guide its 5G-related efforts, including spectrum management, FCC  has developed its Facilitate America’s Superiority in 5G Technology Plan  (5G FAST Plan). This Plan includes three “key components: (1) pushing  more spectrum into the marketplace; (2) updating infrastructure policy;  and (3) modernizing outdated regulations.” According to FCC officials,  the 5G FAST Plan represents FCC’s strategy for supporting 5G, and  these key components are FCC’s broad strategic goals for 5G.

However, FCC has not laid out in the 5G FAST Plan how it will implement  and assess progress toward the three key components. Our past work on  strategic planning has identified related leading practices. These include  identifying: (1) specific and measurable performance goals to show  progress toward broad strategic goals; (2) the activities (also known as  strategies) the agency will take to make progress toward its goals; and (3)  related performance measures to assess actual progress made toward  the performance goals.

Although FCC’s 5G FAST Plan notes actions or strategies FCC has taken  regarding managing spectrum for 5G, it does not clearly identify specific  and measurable performance goals and related measures for spectrum  management related to 5G deployment. For example, the plan notes that  FCC’s actions on the 2.5 GHz, 3.5 GHz, and 3.7 - 4.2 GHz bands could  make up to 844 MHz available for 5G, but these strategies are not related  to any identified performance goals or measures. Without such strategic  planning efforts, it is unclear if these actions will be sufficient to address  the challenges experts raised about the lack of mid-band spectrum for  5G. Additionally, establishing performance goals and measures would  allow FCC to assess its spectrum management strategies and track the  progress it is making toward its goals.

Further, according to FCC officials, the priorities noted in the 5G FAST  Plan were not developed with outside entities, such as NTIA or other relevant stakeholders, including carriers. Leading practices, as identified  in our previous work, show that successful organizations base their  strategic planning, to a large extent, on the interests and expectations of  their stakeholders, which could include other federal agencies, Congress,  and others. Thus, involving stakeholders in the strategic planning  process helps ensure that the agency’s efforts are targeted at the highest  priorities.

According to FCC officials, it can be difficult to set goals for specific  amounts of spectrum to be made available because of, in part, the fast- changing nature of the telecommunications industry. While we recognize  that setting such goals, measures, or strategies may be difficult, our past  work on strategic planning has found that there is no more important  element in results-oriented management than an agency’s strategic  planning effort. This effort is the starting point and foundation for  defining what the agency seeks to accomplish, identifying the strategies it  will use to achieve desired results and then determining how well it  succeeds in reaching results-oriented goals and achieving objectives.  Proactively developing performance goals, strategies and measures— with the involvement of relevant stakeholders—to manage spectrum  demands associated with 5G deployment would help ensure that  sufficient amounts of spectrum in consecutive portions are made  available to avoid delaying the deployment and limiting the capabilities of  5G networks. Additionally, by incorporating these key elements into its  strategic planning for 5G, FCC would be able to assess its progress in  managing spectrum, particularly the congested mid-band spectrum that is  important to 5G deployment.

FCC Lacks Comprehensive Strategic Planning to Mitigate the Likelihood of 5G to Widen the Digital Divide

Experts Warned That 5G Deployment Would Likely Widen the Digital Divide

Experts we convened told us that 5G deployment, especially high-band  5G networks, will likely widen the existing digital divide, particularly  between urban and rural areas, as well as within urban areas. Experts  and stakeholders told us that 5G using high-band spectrum is likely to be  first deployed in areas already equipped with much of the necessary  infrastructure (i.e., fiber and power). Experts said these areas are  generally more urban, densely populated, high-income areas as opposed  to rural or low-income areas. Stakeholders told us that rural areas will see  5G deployed mostly on lower frequencies, on which signals can  propagate further but which cannot carry the same bandwidth (i.e., data  throughput) as higher frequencies can. Within urban settings, experts said  that high-band 5G networks are more likely to be deployed in  commercially viable areas, including those parts of a city that already are  equipped with fiber and power and, presumably, already benefit from the  most advanced mobile broadband services available. For example, an  expert representing the wireless industry stated that only about 10  percent of the District of Columbia would receive 5G services using high- band spectrum, as it would be cost-prohibitive for the carriers to install 5G  using this spectrum beyond that 10 percent of the city.

Experts told us that individuals without access to 5G networks will not be  able to take advantage of the use cases that 5G promises, including the  high-speed connections offered by enhanced mobile broadband. Experts  stated that this situation will greatly affect, among other things, the  economic and educational opportunities that 5G promises to make  possible. We have previously reported on the digital divide, or the varying  levels of access to technologies such as internet and wireless services  among different socioeconomic groups, as well as groups in different  geographic areas. For example, as we have reported in the past, rural  areas tend to have conditions—such as low population density or difficult  terrain—that can increase the costs for carriers to deploy and maintain  networks in those areas. Furthermore, lower-income households may  be located in areas with access to the necessary infrastructure for certain  services but may not be able to afford them. The challenge for some  households to afford the most advanced mobile communications services  would become worse if carriers charge more for 5G services.

An Expert’s Perspective on the Digital Divide  “Employers who want to ensure that their workforce has access to  5G, or their factory floor has access to 5G, won't locate in  communities that don't have those services, thereby exacerbating the  existing digital divide.”

FCC Has Efforts to Close the Digital Divide but Has Not Developed Specific and Measurable Performance Goals and Related Strategies and Measures

FCC has taken steps to address digital divide issues, with some of these  efforts potentially affecting the digital divide as it relates to 5G  deployment. For example, according to FCC officials, FCC issued a  recent order approving a merger between two mobile carriers that  included certain service requirements to increase 5G access nationwide.  FCC told us that the merged company will face significant financial  penalties if it fails to meet these requirements.

Additionally, FCC has established financial support that may be used for  5G-related efforts. The Universal Service Fund provides financial support  to carriers through different programs, each targeting a particular group of  telecommunications carriers or consumers. For example, one of these  programs, the High Cost Program, provides support in rural or remote  areas where the customer base is relatively small and the cost of  installing infrastructure is high. According to FCC officials, the support  provided by the Universal Service Fund can evolve over time to address  emerging technologies, including 5G. For example, the officials stated  that in response to recent hurricanes in the Caribbean, the Universal  Service Fund is currently being used to support deployment of fiber and  power in parts of Puerto Rico and the U.S. Virgin Islands, which will help  support future deployment of 5G in those areas.

Further, in December 2019, the FCC Chairman announced his intention  to establish the “5G Fund,” which would make up to $9 billion in Universal  Service Fund support available to carriers to deploy 5G services in rural  areas of the United States. In April 2020, FCC issued a Notice of  Proposed Rulemaking and Order seeking comments on the framework for  the 5G Fund and on approaches to identifying eligible areas for support.

Although FCC’s actions could help address the digital divide, its existing  planning documents for 5G do not include key elements that would allow  FCC to understand the effects of these efforts as they relate to 5G  deployment. Neither FCC’s strategic plan for 2018 through 2022 nor its  5G FAST Plan include specific performance goals—or related strategies  and measures—that would allow FCC to assess the effectiveness of its  efforts to close the digital divide associated with 5G deployment. For  example, FCC’s strategic plan for 2018 through 2022 includes a strategic  goal and performance goals to close the digital divide, but the  performance goals are not specific or measurable. Further, neither the  strategic plan nor the 5G FAST Plan include specific performance  measures regarding the effects of 5G on the digital divide. Moreover,  while FCC’s strategic plan states that a strategy to help close the digital  divide is that it will set rules to encourage and facilitate the development  of 5G networks, the strategy is not associated with specific performance  goals or measures regarding the effects of 5G on the digital divide.  Additionally, the 5G FAST Plan identifies a number of current and future  strategies for FCC but does not include specific performance goals or  measures that would allow it to understand what those strategies are  intended to achieve and the effects those strategies are having on the  digital divide as 5G networks are deployed.

These omissions are contrary to leading practices of results-oriented  organizations identified in previous GAO work. These leading practices  call for performance goals and related strategies and measures, as we  previously described. Such leading practices, as previously noted,  include identifying: (1) specific and measurable performance goals to  show progress toward broad strategic goals; (2) the activities (also known  as strategies) the agency will take to make progress toward its goals; and  (3) related performance measures to assess the results of the strategies  and actual progress made toward the performance goals.

FCC officials said that they are focusing on reducing the digital divide and  have set high-level goals, but have not established goals specific to 5G.  However, by establishing specific and measurable performance goals for  5G with related strategies and measures, FCC will have greater  assurance that it has properly planned actions to effectively address the  likely adverse effects on the digital divide as 5G networks are deployed.  For example, specific goals for 5G will help FCC assess the effectiveness  of its recent decision to make $9 billion in Universal Service Fund support  available to carriers to deploy 5G services.

The High Cost of 5G Infrastructure May Affect 5G Deployment

Experts Identified Economic Issues as a Key Challenge

Experts told us that deploying 5G infrastructure will be very costly for  carriers. According to international standards established for 5G  networks, to support all the new capabilities of 5G, carriers will need to  replace their 4G core networks with new 5G equipment. These  standalone 5G networks will provide new capabilities such as ultra- reliable low latency communications that could enable the development of  new, more advanced use cases. In the meantime, carriers are currently  deploying hybrid 5G, which uses existing 4G network infrastructure, but  they still must make some upgrades to their 4G equipment and in some  instances, deploy additional cell sites, such as small cells, to provide  hybrid 5G service. These small cells can be installed on existing  structures, such as buildings or streetlights. See figure 4 for examples of  small cells.

Some carriers are deploying 5G using low-band spectrum, which is much  less costly to deploy because carriers can use their existing 4G cell  towers. However, low-band spectrum does not enable the same data  speeds as other types of 5G. As discussed previously, the United States  has made a large amount of high-band spectrum available for 5G. The  use of such spectrum increases the cost of 5G infrastructure deployment  because it requires more small cell installations. Experts suggested that,  because of the increased costs, carriers may limit deployment of high- band 5G network equipment to high-density areas such as sections of  cities or stadiums. Moreover, a recent Defense Innovation Board report  referenced a preliminary study that indicated that carriers would have to  install approximately 13 million base stations, at a cost of approximately  $400 billion, to deliver 5G service using this high-band spectrum to 72  percent of the population.

In addition to installing the actual cell site equipment, each small cell site  has costs associated with it:

Fiber: Experts told us that fiber deployment is critical to the success  of 5G. They noted that getting enough fiber in place to support the  large increase in small cells will require a massive infrastructure  deployment. For example, experts stated that currently there is not  enough fiber in the ground in most places to support 5G. The fiber  network must also have the capacity to handle the increased traffic  from 5G. Experts told us that the new fiber needed for 5G will be  costly to install, both in urban and rural areas. For example, installing  fiber in urban areas can be costly due to local rules and difficulty  accessing the right-of-way. In rural areas, fiber deployment costs are  high because carriers must install fiber over longer distances to reach  customers.

Power: In addition to fiber, new cell sites also require a power source.

While some small cells are being installed on light poles that have an  existing power source, an expert noted that sometimes these are only  powered on at night. Another expert noted that carriers may need to  install back-up power sources, in case of a power outage.

Permitting: When installing a new cell site, carriers generally must  seek approval from the federal, state, or local government that  controls the right-of-way or property where the cell site is to be  located. This may require carriers to pay permitting fees or meet  certain aesthetic requirements. Experts told us that the fact that  different cities have different permitting regimes drives up the cost to  build infrastructure. For example, experts told us that making sure  small cells meet different localities’ requirements for design,  dimension, and other aesthetic requirements is difficult for carriers  and could slow deployment. However, other experts noted that these  local permitting processes enable local governments to ensure 5G is  being deployed in such a way that would benefit their citizens. For  example, according to a report by the National League of Cities, San  Jose, California created a tiered pricing structure to encourage  carriers to cover more of the city. The city plans to use some of the  revenues from this permitting process to help close the digital divide in  the city, for example by allowing people to check out devices at  libraries.

Experts’ Perspectives on Permitting Costs  “There are several thousand municipalities in the United States, each  of which has different paperwork, processes, and payment  mechanisms for siting small cells, which increases 5G deployment  cost and time and inhibits the rollout of the networks.” “5G deployment requires many more small cells than 4G required  macro cells, thereby increasing the reliance on public right-of-ways. As  a result, we have seen cities restricted from charging market rates for  permitting. However, cities play a really crucial role in ensuring that the  deployment of these technologies and the use of public right-of-ways  is coupled with public interest obligations.”

Carriers’ current financial condition will also affect how they deploy 5G,  including where and what type of networks they deploy. Experts noted  that carriers in the United States may not currently have the capital  required to fund large-scale deployments of 5G due, in part, to the costs  of recent business decisions. Additionally, an expert mentioned that  carriers would likely only be able to afford to deploy high-band spectrum  in small sections of cities. Another expert predicted that carriers may not  replace existing 4G equipment until it becomes less reliable over time,  leading to a more comprehensive roll-out of 5G in 6 to 8 years. A  representative from a carrier said that while it did not anticipate any  additional revenue from 5G deployment, carriers still must deploy 5G  because to not do so would place their companies at extreme risk of  losing large numbers of customers, potentially eroding their revenue  base.

Experts’ Perspectives on Economic Challenges to 5G  Deployment  “Most of the major carriers in the United States aren't in great financial  shape. They've leveraged up and have made acquisitions into new  spaces. …The challenge for these carriers is do they have the billions  of dollars required for another large-scale capital program, or do they  just sort of put it out there because it’s good PR.” “Right now, from an economic standpoint, there isn't a strong case for  making this enormous investment in 5G and it feels like it's more of a  defensive play by carriers.”

Experts also noted that consumers are not always willing to pay more for  5G service, which reduces carriers’ ability to recoup their deployment  investments. For example, one expert questioned whether consumers in  the United States were willing to pay anything more for 5G, and another  noted that carriers are currently charging the same price for 5G and 4G  service. Additionally, experts told us that there is no clear use case  currently developed for 5G in the United States, besides enhanced mobile  broadband. The 5G use cases often cited, such as remote surgery or  autonomous vehicles, are unlikely to be developed in the near future.  Without such use cases, they said, carriers lack a strong business case  for deploying 5G. Other experts noted, however, that 4G use cases— such as social media or ride sharing apps—did not exist when carriers  started to deploy 4G, but were developed after 4G was in place. Similarly,  experts predicted that 5G use cases would be developed after 5G  networks were available in the United States.

FCC and Others Have Taken Some Steps to Reduce Deployment Costs

To help reduce the cost of deploying 5G infrastructure, FCC has taken  steps to expedite the permitting and review of small cells. For example,  FCC issued a Programmatic Agreement for the Collocation of Wireless  Antennas, which reduces the regulatory approval process for collocating  small cells that are on existing infrastructure, such as utility poles. In  addition, FCC adopted an order and declaratory ruling regarding state  and local government reviews of small cell applications, which set  parameters for fees and time frames for these reviews. This Order went  into effect in January of 2019; however, it is currently being challenged in  federal court.

FCC also adopted an order that, among other things, exempted the  construction of small cells from compliance with federal historic  preservation and environmental review that were applied to large macro  towers. A recent federal court decision, overturned the exemption and  the FCC repealed the section of the order.

In addition to the steps FCC has taken to limit regulatory and permitting  costs, experts suggested that carriers could consider sharing their  network infrastructure to reduce their capital expenditure for deploying  5G. Through infrastructure sharing agreements, two or more carriers  share infrastructure such as radio antennas or fiber to deliver service to  users. This sharing reduces deployment costs for carriers and allows  them to deploy in areas where the costs would normally be prohibitive,  such as rural areas. Such sharing agreements can increase choices for  consumers, as more carriers can afford to operate in areas they would  not normally be able to. FCC officials said that industry is already moving  toward greater shared infrastructure and FCC’s efforts are designed to  promote it. However, such sharing agreements may have the potential to  decrease competition, if not well monitored. In addition, a carrier may not  be willing to share infrastructure with other carriers for fear of losing its  competitive advantage. For example, according to a report by the Body of  European Regulators, a carrier that is the only one offering service in a  certain area could lose competitive advantage and not be rewarded for its  investments in the area under a sharing agreement.

Infrastructure sharing is common in other countries; the same report by  the Body of European Regulators found that carriers in 14 European  countries had active sharing agreements with joint deployment in place.  For example, in Spain, some carriers share their mobile networks in areas  with fewer than 175,000 inhabitants. According to the report, 5G will  further incentivize network sharing, as carriers need to deploy more small  cells and fiber. Experts told us, however, that such sharing agreements  were uncommon in the United States. Instead, carriers typically install  their own network infrastructure, leading to overlapping networks and  higher overall deployment costs. FCC officials said they recognize the  benefits of infrastructure sharing, especially for 5G, but said that the  decision about whether to share infrastructure is ultimately up to each  carrier. Officials noted that carriers will use their own economic and  engineering analysis in determining how to deploy 5G.

5G networks could create significant economic benefits for the United  States, as companies develop products and technologies to access 5G’s  new capabilities. Carriers currently face challenges to deploying 5G,  however, which could delay or even limit the United States’ opportunity to  realize those benefits. FCC has taken a number of actions regarding 5G  deployment, but it has not clearly developed specific and measurable  performance goals and related measures–with the involvement of  relevant stakeholders, including NTIA–to manage the spectrum demands  associated with 5G deployment. This makes FCC unable to demonstrate  whether the progress being made in freeing up spectrum is achieving any  specific goals, particularly as it relates to congested mid-band spectrum.  Additionally, without having established specific and measurable  performance goals with related strategies and measures for mitigating  5G’s potential effects on the digital divide, FCC will not be able to assess  the extent to which its actions are addressing the digital divide or what  actions would best help all Americans obtain access to wireless networks.

We are making the following two recommendations to FCC:  The Chairman of FCC should develop, in coordination with NTIA and  other relevant stakeholders, specific and measurable performance  goals—with related strategies and measures—to manage spectrum  demands associated with 5G deployment. (Recommendation 1)

The Chairman of FCC should develop specific and measurable  performance goals—with related strategies and measures—to determine  the effects 5G deployment and any mitigating actions may have on the  digital divide. (Recommendation 2)

We provided a draft of this report to FCC and NTIA for review and  comment. FCC provided written comments, which we have reprinted in  appendix II. FCC and NTIA also provided technical comments, which we  incorporated as appropriate throughout our report.

In its written comments, FCC neither agreed nor disagreed with our  recommendations. FCC described the challenges associated with  developing performance goals for managing the spectrum demands  associated with 5G deployment. Specifically, FCC stated that such goals  could limit the options available to manage spectrum demands. Instead,  FCC stated that it adopts specific and measurable performance goals— with related strategies and measures—during ongoing rulemakings,  which allow FCC to establish engineering, economic, or other technical  outcomes.

We acknowledge in our report that setting specific and measurable  performance goals, strategies, and measures can be challenging, but  continue to believe such strategic planning would benefit FCC’s spectrum  management efforts. We did not identify what specific and measurable  performance goals, strategies, and measures FCC should develop  because FCC is in the best position to make such determinations.  However, as we describe in our report, FCC still has not engaged in this  strategic planning effort. Our past work has found that there is no more  important element in results-oriented management than an agency’s  strategic planning effort. That effort should be the starting point and  foundation for FCC to define what it seeks to accomplish, identify the  strategies it will use to achieve desired results, and then determine how  well it succeeds in reaching results-oriented goals and achieving  objectives.

Related to our recommendation for FCC to develop specific and  measurable performance goals to determine the effects 5G deployment  and any mitigating actions may have on the digital divide, FCC noted that  it is taking regulatory actions and providing funds designed to reduce the  digital divide. FCC further said that it remains committed to promoting  robust 5G deployment nationwide and, consistent with our  recommendation, will continue to explore new ways to evaluate how it  may impact efforts to close the digital divide.

As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 15 days from the  report date. At that time, we will send copies to the appropriate  congressional committees, the Chairman of the FCC, the Secretary of the  Department of Commerce, and other interested parties. In addition, the  report will be available at no charge on the GAO website at  https://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-2834 or Vonaha@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made key contributions to this report  are listed in appendix III.

Appendix I: Objectives, Scope, and Methodology

This report examines the challenges, and the federal government’s  efforts, related to 5G deployment with regard to: (1) managing spectrum;  (2) closing the digital divide; and (3) addressing economic issues. These  were the top three challenges to 5G deployment identified by the 17  experts we convened.

To identify challenges to 5G deployment, we issued a brief questionnaire  to 146 GAO-identified stakeholders with knowledge of 5G networks.  These stakeholders included officials from the federal government, as  well as representatives from academia, industry, and consumer groups.  Stakeholders were identified by reviewing previous GAO reports and  through background research and were selected to provide a range of  perspectives on 5G deployment. We asked these stakeholders to identify  challenges to deploying 5G networks in the U.S. and received 23  responses. We conducted a content analysis to categorize the responses  into a final set of 13 challenges. See table 1 for a list of the challenges.  Because content analysis relies on the judgment of coders to determine  whether qualitative data reflects particular categories, we took several  steps to ensure that this judgment remained objective, accurate, and  consistent. These steps included using independent coders from two  different mission teams within GAO to ensure consistent judgment of  categories. The independent coders were in general agreement on the  challenges categories. On the basis of this high level of agreement  between coders, as well as a review by a third independent analyst, we  are confident that our content analysis represents an objective, accurate,  and consistent assignment of these coding categories.

We then convened a meeting of 17 experts to discuss the above  challenges to 5G deployment. Our meeting of experts was held at the  National Academies of Sciences, Engineering, and Medicine (NASEM) in  October 2019 over one-and-a-half days. Staff from NASEM assisted us  in identifying experts for the meeting. To identify the experts appropriate  for this meeting, NASEM relied on staff experience and professional  judgment drawn from its Computer Science and Telecommunications  Board. We selected the final panel of experts in consultation with NASEM  staff with the goal of ensuring that a broad range of views was  represented from multiple 5G-related areas, such as those of wireless  carriers, academia, and consumer and industry groups. See table 2 for a  list of the experts that participated in the meeting.

The meeting was moderated by GAO staff who guided the experts  through questions about each challenge to 5G deployment. The experts  also discussed potential actions the federal government could take to  address those challenges and were asked to identify the most significant  challenges to 5G deployment. This meeting of experts was planned and  convened with the assistance of NASEM to better ensure that a breadth  of expertise was brought to bear in its preparation; however, all final  decisions regarding meeting substance and expert participation are the  responsibility of GAO. Any conclusions and recommendations in GAO  reports are solely those of the GAO. The meeting was recorded and  transcribed to ensure that we accurately captured the experts’  statements, and we reviewed and analyzed the transcripts as a source of  evidence. We edited experts’ quotations from the transcripts for clarity  and conciseness to include in this report.

In addition to the experts we spoke to on the panel, we also interviewed  16 stakeholders—as well as officials from the Federal Communications  Commission (FCC), the National Telecommunications and Information  Administration (NTIA), and the National Institute of Standards and  Technology—to further understand the challenges to 5G deployment. We  selected these stakeholders based on our prior telecommunications work,  other 5G literature, and recommendations from stakeholders we  interviewed to provide a range of perspectives on 5G deployment.  Stakeholders were from two universities, four industry associations, five  wireless carriers, as well as five local governments and organizations. To  identify these local governments, we selected a group of cities to include  those where wireless carriers have announced they will launch 5G  services, and selected a mix of cities where there was local opposition to  5G, as well as cities with state or local laws regarding small cell  permitting. We then selected lower-population density cities in the same  states as those cities, using U.S. Census data. To select these cities, we  identified the county with the median population density of the state, and  then selected the city which holds the county seat. We attempted to  contact all the selected cities and were able to schedule and hold  interviews with representatives from Los Angeles, California; Jacksonville,  Florida; Greenville, Illinois; and Naples, Florida. The information we  obtained from these interviews is not meant to be generalizable to other  cities’ experiences, but is meant to provide illustrative examples of actual  5G deployment. See table 3 for a complete list of stakeholders we  interviewed.

Finally, to assess the federal government’s actions to address challenges  to 5G deployment, we reviewed relevant statutes and literature, along  with reports and documents from FCC and the Department of Commerce.  For example, we reviewed FCC reports and orders related to 5G  networks, the Department of Commerce’s Spectrum Repurposing  Report, along with planning reports such as FCC’s Facilitate America’s  Superiority in 5G Technology Plan (5G FAST Plan) and FCC’s and the  Department of Commerce’s strategic plans. In addition, we interviewed  FCC and NTIA officials about their efforts to address 5G deployment  challenges. We compared FCC efforts to address 5G deployment  challenges to its own strategic goals and relevant leading practices for  performance management identified in our prior body of work.

Appendix II: Comments from the Federal Communications Commission

Appendix III: GAO Contact and Staff Acknowledgments

Andrew Von Ah, (202) 512-2834 or vonaha@gao.gov.

In addition to the contact named above, Keith Cunningham (Assistant  Director); Daniel Paepke (Analyst in Charge); Oluwaseun Ajayi; Carol  Bray; Vijay D’Souza; Wayne Emilien; Jonathan Felbinger; Richard Hung;  Catrin Jones; Michael Krafve; Kaelin Kuhn; Hannah Laufe; Dan Luo;  Neelaxi Lakhmani; Brian Mazanec; Jamilah Moon; Cheryl Peterson; Erika  Prochaska; Malika Rice; Oliver Richard; Pamela Snedden; Andrew  Stavisky; Hai Tran; Christopher Turner; Tatyana Walker; and Michelle  Weathers made key contributions to this report.

Wireless carriers are starting to deploy 5G, the next generation of wireless technology. What does this mean for the FCC?

FCC manages access to the radio frequency spectrum wireless carriers use to deliver services. Spectrum is a finite resource shared with other technologies like TV and radar. Carriers need more access to fully deploy 5G.

5G may also worsen the “digital divide.” People in rural and low-income areas that aren’t equipped to access 5G won’t have the economic and educational opportunities full deployment could bring.

FCC’s plans to address these issues don’t include specific and measurable goals—so we recommended improving them.