Who controls the future deployment of 5G?

Economic giants Germany and China started commercial-scale rollouts of 5G – the wireless technology infrastructure that is shifting the way the whole world operates – in late October 2019.

Even though machines and people will still communicate over the internet, 5G networking infrastructure is emerging. Although this is somewhat dependent on the internet, it is distinct from it and will also be subject to more government and private controls.

5G will enable us to do mammoth amounts of computing at high speeds and also without having to connect the input device – a cell phone, or a self-driving car –to any kind of wire. Such rapid speeds are only possible if the rest of the infrastructure is in place and close enough to transmit to these devices. Having your device – whatever it may be – in constant contact with a so-called cloud, sounds intense and very territorial yet, this emerging system will be far more grounded than the internet has ever been.

It is not yet known as to whether 5G controls will be exercised through states or companies but the implications for surveillance, security and national wealth, are huge. Despite this, policymaker’s and business executives have scarcely started to address them.

In the Clouds

The internet has never been easy to govern. Of course its use can be molded and guided by initiatives such as the European Unions (GDPR) but multilateral attempts to control the internet have to this day, failed. This is because the global Internet community is impenetrable and somewhat committed to avoiding state capture.

It is possible that this could change, but for now, the competitiveness of states and unproductive negotiations continue to dominate.

The internet, as you and I know it, can only move data; it does not store it; that’s done by huge servers in data centers. Even in a world of physical servers, location has not really been of importance, however, the emergence of 5G will change this.

Take Amazon Web Services (AWS), today’s leading data storage company. Amazon established the secondary group in 2006 to put its idle server space, intended for holiday sales surges, to better use. The AWS idea was to link that server space into, in effect, a single “virtual” machine, available for rent in any place at any time. The actual machines involved, could be anywhere and distributed across the world.

AWS refined the product which, soon became known as “cloud computing”. This concept became very popular with business owners who were eager to reduce their budgets for information technology departments, servers, software suites, updates, patches, and then more servers. You could store your website and data entirely in the cloud and access it instantly from a laptop using the Internet. AWS quickly became, and still remains, one of the main profitable units in Amazon.

Such a cost-efficient approach resulted in rapid innovation. Instagram was able to store over 100 million images on the cloud. Phones then became extensions of vast computing and storage.

Of course the big names started to compete with AWS and by 2011, major multinationals were embarking on “the great cloud migration”. Even the CIA jumped on the bandwagon in 2013, emphasizing the position of trust secured by the cloud. With unmatchable efficiency, security and ability to adapt to technological innovation, last year, the value of the cloud-computing business was more than $200 billion.

On the land

Even with the cloud, physical space still matters. We can store a movie on the cloud but the closer the laptop on which it plays is to the Wi-Fi router, the faster the movie will stream.  The speed at which a signal gets to the computer and back is known as ‘latency’. The lower the latency, the faster the computing will be. Even with fiber-optic cable, there are latency advantages in physical proximity

With radio signals, such as from a cell phone, latency is much more important, because radio waves carry vastly less information, at slower speeds, and with more interference than is the case with cable.

So, the point is, if physical proximity is still important for cloud computing, it is critical for 5G networks. The magical aspect of 5G will be its ability to connect to a phone or car within milliseconds, this will process the data and then return it to the end device. Latency has to be low for this process to run smoothly and this is why computing is coming back down to earth.

So huge amounts of cash are now being thrown into building remote data centers. Last year, Argentina invited AWS to invest $800 million in a data center in their capital, Buenos Aires. Google plans to invest $850 million in a new facility in Taiwan. The fact that these tech giants are willing to invest so much indicates their awareness of the fact that data-localization laws and the fundamentals of data sovereignty are for now, not going away.

Building the data centers is also a way to get market share by lowering latency for users. These new centers create so-called “availability zones,” where radio-based computing can take place at ever higher speeds. So if cloud computing is global, then these zones are the local clouds which are built to house latency requirements of companies that are placing increasing demands on cloud providers.

So if the big-multinationals don’t claim their territory then others will. There is a parallel world of smaller businesses that are also building data centers around the world. Yes, Google and AWS are market leaders but they are in hot pursuit by Digital Realty Trust and Equinix, neither of which, are household names.

As one might expect, China favours domestic cloud centers even though US companies are more often involved. Much of the data-center growth in India and Africa has been led by smaller companies, frequently in collaboration with the big global names.

Time to take back the clouds

5G’s critical requirement for low latency and also the rapidly increasing competition in the data-center business suggests, the emergence of more local clouds as the new network settles on the land.

But the giants in the industry have responded to this idea defensively, because it threatens their ability to scale across borders and develop services for the largest-possible market.

Last month, France and Germany announced their intent to create a “European cloud” that would give local companies preference over AWS, Alibaba, Google, and other multinational cloud providers.

A spokesperson for AWS retorted that such a project would lack the scale to compete with the industry’s dominant players. “We think that the idea of a ‘national’ cloud is interesting in theory, but in reality it removes many of the fundamental benefits of cloud computing.”

Microsoft was harder hitting in its response: “Real sovereignty requires the most powerful cloud solutions—otherwise Europe will only cement its digital gap.”

Even the market dominating multinationals of today, do not always thrive by mocking the sovereignty of governments. Let’s face it, it is unlikely that Google search will be allowed to return to China anytime soon. Facebook also offended India in 2016 when one of their board members controversially said:

 “Anti-colonialism has been economically catastrophic for the Indian people for decades. Why stop now?”

The launch of the EU’s GDPR and other state monitored guidelines was the start of a public-private fight over data control. Russia is also implementing legislation aimed at calming the multinational tech giants.

Cloud-computing, data-center, and 5G industries are now really becoming one single industry and this is where they need to start thinking ahead. As it stands today AWS, Google Cloud, Microsoft Azure, and Alibaba Cloud, each provides their own distinct cloud products.

Going from one to the other, or even combining the services of more than one of them, is not easy: these are all competitive companies that want to lock in customers and lock out any competition. However if the new global network being created by these companies is to actually be what it says on the tin – GLOBAL – then products intended for it, have to be able to transition flawlessly across corporate borders. If not, the cars and phones and intricate processes of the Internet of Things will not be globally accessible and at some point in their supposedly ethereal progress across the earth’s surface, they will cease to compute. To put it bluntly, they will require corporate visas to cross corporate borders.

As I’m sure you will agree, this borders on the ridiculous and amounts to a redistribution of sovereignty from state to corporation that is so far-reaching that states will push back—as we have seen, they already are. What the Trump administration is doing to Huawei, and China once did to Google, is what the EU might do to AWS. Silicon Valley’s “tomorrow belongs to us” period is ending.

It’s also in the best interests of governments to want to be in the best networks –which are all private. The approximately 50 companies that make up the bulk of the industry have to find ways to harmonize their operating needs with the security and competition that’s non-monopolistic. This is essentially what governments want and if it’s not provided, then states will more than likely engage in a long and drawn out war of destruction against international data-center-cloud-5G platforms, levying fines, imposing regulations, protecting domestic markets, getting rid of foreign competition, subsidizing national champions, and more.

The disruption this would cause in today’s networked society, is colossal. Without a more united stance and concerted effort by the corporate great powers of the new network, the reactions of governments will become more erratic as they confront their real and perceived weaknesses.