Keating: Hoosiers Don’t Need 5G, or Do They?

March 5, 2020

by Barry Keating, Ph.D.

Turn on the television, and every third add is for something called 5G. The adds say that 5G is fast, reliable, and the next “must-have” technology. But what is 5G, and do you need it?

Your current smartphone is probably a 4G device. That is, it uses 4th generation cellular technology. 3G preceded 4G, and about the only difference, you might have noticed when you purchased your latest phone was that the time for loading webpages seemed to decrease. So, maybe 5G will decrease the wait time even further. Is that all there is to 5G – a speed increase?

Well, “Yes,” it will increase the speed of your communications and “No,” there is a lot more to 5G than simply an increase in speed. 5G is the next generation of telecommunications protocols (i.e., the rules by which your device and my device communicate with one another and any network). The rollout of 5G networks and the devices that can use them is in its infancy. The phone you have now will not be able to use 5G; your current phone and any other current device will require, not an upgrade, but a replacement. The replacement devices will be expensive at first. At the moment there is only a single commercially available 5G phone; that will change this year. Is speed so important that you will need to toss your old devices in the next few years and purchase an expensive new ones that will essentially perform the same functions?

The answer is a bit ambiguous. The solution as to whether to upgrade or keep the old device is a timing decision. You will upgrade sooner or later because 5G and 4G are significantly different from one another. It is not just a speed increase that separates these two standards. 5G is poised to unleash a massive IoT (Internet of Things) ecosystem in which billions of devices (not just smartphones) are connected and trading information instantaneously. 

This speed increase will affect every Hoosier whether you personally upgrade your phone or not. Interactions with the medical community, the safety provided by your police agencies, and how you receive your entertainment will all change with 5G. 

So what exactly will change? Some changes are easy to predict with high accuracy; other changes are probably unforeseen at this time. For certain, healthcare monitoring systems will become much more robust, more autonomous and more frequently used; the ways in which we interact with healthcare providers is due for a sea change. Also certain is that driverless vehicles of all types will become both more common and more capable than the current versions. Note that in both the healthcare and the transportation industries, jobs will be different; Hoosiers cannot assume that every current job will be here 10 years from now. These two industries are just the tip of the iceberg in terms of industries affected by 5G; almost every industry will be affected in some manner. But, why is this different than the rather unnoticed move from 3G to 4G? 

Isn’t it just a speed difference? Why would speedier web browsing make much of a difference in day-to-day life for Hoosiers?

The answer lies not only in the degree of change in the speed of telecommunications but in the opportunities that speed change affords us. Let’s consider a concrete. Imagine a household streaming five different videos while family members browse the Internet on ten different devices. Most communities in Indiana have a single cable television provider.

In South Bend, it’s Comcast; they are a monopoly provider of cable services and take full advantage of that position. This is the provider connection these family members would be sharing in South Bend. With 5G, however, an alternative will become available; without any physical cable, a small antenna will be capable of receiving everything coming down your current cable (television channels as well as Internet services) at a significantly faster rate than you now receive and with 99.999 percent availability. If that happens (and it will) how do you suppose Comcast will respond to the faster, more reliable, and easier to install competition. It’s a good guess that prices for like services will decrease, and reliability of service will increase; competition breeds good results for consumers.

For every Hoosier community, this new delivery technology will require rethinking how to structure government regulations and policies that will either hinder or neutrally treat the new opportunity. Do we still need community ordinances to regulate cable television and the Internet if there are numerous non-cable providers of the same service? What types of policies are appropriate for users of autonomous vehicles? Will healthcare services, especially diagnostic services, be permitted to deliver services digitally?

5G is not something to fear, but it is also not something that we can ignore. It is time to at least begin to examine how we will treat the changes that are coming and to alter what will be antiquated policies and regulations. The game has changed. 

Barry P. Keating, Ph.D., an adjunct scholar of the Indiana Policy Review Foundation, is Emeritus Professor of Finance, University of Notre Dame.


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