How to approach 5G policies The implementation of 5G will be a major milestone not only in national communications, but also for the national economies and societies. 5G represents a fundamental step towards bringing the virtual and real worlds closer together. It will bring unprecedented amounts of helpful data, ability to process them both on a localized as well as centralized basis, along with the ability to operate robotic devices remotely in the real world. It will fundamentally change the ways how we do business, how we work, live, interact and entertain ourselves. Governments will play a pivotal role in transition to 5G and digital economies by finding the right balances between economic competitiveness, security, privacy, digital inclusion and democratic rights of citizens. A successful outcome would entail concurrent expansion of economies, improvement in human health, well-being, health of societies, quality and sustainability of our environment, management of scarce resources, our security and human freedoms. 5G may also boost inclusiveness by helping disadvantaged groups to overcome physical, geographical and other barriers. Disruptive power of 5G and digital technologies may be helpful in in addressing some of the world’s most fundamental challenges, both regionally and globally. To avert adverse outcomes, it is however imperative to manage such disruptive powers rightly. Choice of digital and 5G policies is hence most crucial for the future of our economies, societies and nations. The purpose of this report is to provide a visionary strategic overview of options and opportunities around 5G and to give high-level policy recommendations, also relevant for the Czech Republic. We have approached this topic as broadly as possible, putting it into the context of the latest industry trends in global technology and telecommunications. Among others we have looked into emerging new economic and technology driven opportunities for 5G wholesale networks, open RAN, a case for private 5G networks for Industry 4.0 and beyond, emerging synergies between the energy utilities and digital communications infrastructure, strategic implications of the latest trends for telecoms, as well as health and security considerations. We suggest policymakers to approach digital and 5G policies, including spectrum allocation, along the following principles: a. b. c. An open mind about digital policies, 5G policies and spectrum allocation. When designing their digital and 5G policies, policymakers should remember that the current wireless industry’s business model was practically designed in the 1980-90s by their predecessors, mainly through spectrum allocation. 5G and future wireless technologies are likely to require a fundamental rethink of the wireless business model for both infrastructure and services. Given the strong role of regulation in wireless, any transformative changes in the wireless business model would likely have to involve the policymakers as well as the wireless industry, along with multiple other stakeholders. Transformative changes may entail for example building super-secure national wireless networks, national wireless wholesale networks or localized private wireless networks. Moves in this direction may lead to the emergence of new entities, resulting from transformation of the legacy telecoms, entrants from other legacy industries such as power utilities, or newcomers, who adopt differentiated business models right from the onset. Spectrum allocation policies will continue playing crucial role in driving the right type of transformation in digital connectivity to the benefit of national economies. While policies should encourage spectrum owners to make the best contribution to the national economies also through their own success, the current spectrum owners cannot not implicitly assume that methods of spectrum allocation and use will never fundamentally change, and that they, in their current form and with their current business models, will remain the best suitable candidates for acquiring of all future spectrum in a form of long-term nation-wide allocations. Fairness, lawfulness, and proportionality. Digital policies should be fair. They should avoid infringing the rights of any entities or giving an unfair advantage to others. Spectrum allocation policies should not substitute broader regulations, which require different legislative and enforcement mechanisms. Policies should also not attempt to introduce rules retrospectively. Finally, policies should be proportional, i.e. avoid situations when some entities are forced to incur excessive regulatory-induced costs to secure their ability to continue their normal operations on grounds, which are not clear, fair, linked to transparent policies and supported in a law. That said spectrum has always been awarded with conditions and the nature of such conditions may evolve with changing policy priorities. Long-term vision, transparency and co-operation with all stakeholders. It is important that commercial entities have grounds to endorse the new policies. Given the often strongly conflicting interests between different market players and industries, combined with aversion to risks and changes in many industries, it is essential that policymakers present sensible long-term visions in a transparent way. Such visions should be constructively discussed with commercial stakeholders from different industries, to give them an opportunity to see how to best adapt and what long-term benefits they may expect. Given the importance of digital economies and 5G, not utilizing 5G spectrum auctions for pursuing digital transformation policy visions would be a missed opportunity. Executive summary 11