This commentary reflects my remarks and the discussion at a recent panel hosted by the Center for Business & Public Policy at Georgetown School of Business on Can 5G Technology Create New Opportunities for Competition?, moderated by Carolyn Brandon and featuring Jennifer Fritzsche, Anna-Maria Kovacs, Paroma Sanyal and me as panelists.\nA key 5G application is consumer mobile broadband.\u00a0 When I asked a friend recently what she expected to get out of 5G, she said, questioningly, \u201cFriends on the metro?\u201d\u00a0 It is true that\n5G could potentially allow you to download a\u00a0two-hour movie in 3.6 seconds. \u00a0The same task takes about six minutes on 4G. That\u2019s the difference between 100mbps and 10Gbps from the point of view of the consumer.\nBut the key benefits go well beyond throughput.\u00a0 5G allows for a massive increase in smart, connected devices. For consumers this means light bulbs, thermostats, security cameras, refrigerators, mattresses, TVs, smart speakers, bathroom scales. Big 5G consumer apps might be mobile virtual reality and augmented reality apps. As one participant in the panel put it, \u201cnichey\u201d products.\nFor the enterprise, 5G means smart, connected products allowing real time collaboration for a mobile, decentralized office workforce.\u00a0 Industrial automation, energy, utilities, agriculture and defense all benefit from the increased speeds, low latency and massive capacity of 5G.\n5G is a platform that enhances the capacities of smart, connected devices, but a platform is nothing without applications.\u00a0 5G creates an opportunity for new software applications by accelerating the trend of turning everything into a computer connected to other computers.\nThe key 5G policy challenges arise from the transformation of devices in the home and enterprise into computers linked to other computers\nA key policy challenge is safety as 5G enables connected devices to be used in mission-critical applications.\u00a0 If your connected insulin pump or pacemaker fails, you have a problem larger than a mistaken book recommendation. Reliability and accuracy are key and cannot be left to the beta testing and agile computing development styles that characterize many less critical applications.\nAnother challenge is information security as the exposure of connected devices to the Internet creates new vectors of attack by malicious actors that threaten not just the device but the entire system of which it is a part. And the threats go beyond theft of valuable information like credit card numbers to implicate the safe operation of systems.\u00a0 Misaligned financial incentives arise from the fact that the people who might suffer the cost of intrusions are not the same people who are providing the devices that must be secured. Given high cost of developing systems that work reliably with 5G, companies might be tempted to skimp on security.\u00a0 Bruce Schneier has a great and scary book on the topic, with a clickbait title, Click Here to Kill Everyone.\u00a0 He recommends a dedicated information security agency with authority to prescribe security standards.\nThe threats to safety and security raise the issue of liability.\u00a0 5G system design to minimize risks is urgent but 5G implementations will be complex systems with tight integration among their parts.\u00a0 Accidents are to be expected, even normal.\u00a0 Who is responsible when they happen?\u00a0 Manufacturer? Software designer? User? Connectivity provider?\u00a0 This discussion has already begun in the autonomous car space, with proposals such as no-fault insurance to deal with the difficulty of attributing causal responsibility for accidents.\n5G systems will throw off massive amounts of data that would be valuable for purposes well beyond immediate use.\u00a0 Who controls this data?\u00a0 Policy makers face the same series of alternatives as in liability, with the added worry that user control might not be feasible or desirable.\nPrivacy and government surveillance will be rising concerns as well.\u00a0 Companies can track people and things on 5G systems and governments can keep track of enemy agents, terrorists, criminals, and other persons of interest.\u00a0 What are the rules?\u00a0 As the use of 5G-generated data, it might not make sense to put control purely in hands of ultimate user.\u00a0 Congress might have to deal with these issues in its consideration of national privacy legislation.\nCompetition policymakers need to confront possible concentration in 5G markets\nEconomic forces in 5G markets including scale economies, customization driven by product-usage data and network effects will tend to favor big companies and might create barriers to expansion, switching and entry that will reduce competitive vitality.\u00a0\n5G systems will require huge upfront software development costs, more-complex product design as devices are integrated into systems, and high fixed costs of securing reliable system infrastructure including connectivity, safe and adequate data storage, first-rate analytics, and strong security measures.\u00a0\nThese higher fixed costs create an incentive to cut prices to increase volume and spread the fixed costs over a larger user base.\u00a0 Even if the market starts with vigorous competition, the resulting price wars could drive consolidation.\nThe fixed costs of making products will inevitably increase because they must be designed to be parts of systems.\u00a0 This will make entry and expansion more difficult, since companies must enter and compete in the market as a provider of systems, not single products. John Deere will no longer be a manufacturer of tractors, but a provider of a complete agricultural management system.\nCustomization will create a different tendency for consolidation. The rich data streams that smart connected products throw off will enable companies to know how customers actually use the products, estimate repair and maintenance needs, anticipate breakdowns, plan upgrades, and generally enable providers to customize the product to consumers\u2019 needs and interests. This dependence of product functionality, performance and improvement on historical product-usage data will increase switching costs and create consumer lock-in, making it harder for an existing company to expand or for a new company to enter the market.\nNetwork effects will also increase these tendencies toward concentration. Companies with a large base of users will have a larger amount of data to analyze using the latest machine learning techniques that improve their accuracy with more data.\u00a0 Big companies will be in a better position to upgrade and improve their products.\nThese economic forces will all drive winner take all competition. Policymakers might need to think ahead to possible antitrust remedies such as data portability, data sharing and interoperability to keep competition alive and well in 5G markets.\n5G will accelerate changes in the nature of things and competition\n5G-enabled products will embed sensors, operating systems and software within everyday object in the home and the workplace, and add fast, no-latency, and massive connectivity to allow product data to be stored and processed remotely, adding features that operate instantaneously from the cloud instead of in the product itself.\nPolicymakers have been focusing on the connectivity part of these systems, focusing on spectrum issues.\u00a0 Connectivity providers have made different judgments about whether to deploy in the low and middle band or in the millimeter wave band above 24GHz.\u00a0 These are clearly important business and policy issues that have to be resolved for the technology to be successfully launched and developed.\nThe carriers have made huge, risky bets in moving ahead with this infrastructure, but policymakers can fail them by not addressing the other policy challenges that relate more to the nature of the completely revamped smart connected devices that have to work reliably and safely in order for consumers to take their own risks in adopting 5G products. \u00a0\nThese changes in the nature of everyday things need to be addressed in policy initiatives focused on safety, security, liability, and privacy.\u00a0 Longer term, alert antitrust watchdogs need to focus on the challenges to vibrant competition that might emerge in the 5G marketplace.