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'There was a major shift in usage with COVID away from office places to where people live': VerticalBridge CEO

Vertical Bridge CEO Alex Gellman joined Yahoo Finance Live to break down the push to increase 5G in rural areas throughout the U.S.

Video transcript

ADAM SHAPIRO: Let's turn our attention to the fact that a lot of things have gone digital because of the pandemic, and coming down the pike is 5G, or, as our CEO says, "5gee," Hans Vestberg. How do you get broadband to rural areas and do that quickly? Alex Gellman is the VerticalBridge CEO, and when we think about your business, it's the towers, right?

ALEX GELLMAN: Yes, sir.

ADAM SHAPIRO: So are you seeing a great push to erect more towers to help people in parts of the country that don't have good coverage get coverage?

ALEX GELLMAN: Yes. There's a big push to extend coverage. Obviously there was a major shift in usage with COVID away from office places to where people live and a lot of shifting the population away from the city. So that's really stressed the wireless networks in ways that weren't anticipated. So there is a push there.

In addition, there have been commitments by the wireless companies, the major wireless companies, to cover rural areas. And now there's also a push within the infrastructure bill specifically to bridge the digital divide. Because we've all seen how truly important it is, and it's an equity issue.

SEANA SMITH: Alex, what do you think of the infrastructure bill? Do you think it adequately addresses some of these issues?

ALEX GELLMAN: I think it's a great start. I think there's one thing in there that's relatively problematic, in that it dictates a symmetrical speed of 100 megabits both up and down all the way to the premises, which I think is overkill. And my concern is that will lead to a gap of people who won't be served. Because of-- there won't be enough money to go around.

Assuming that that can be adjusted to a more market-based approach where it's predominantly fiber, but if wireless or an existing 5G network-- supposing, you know, AT&T, Verizon, T-Mobile or Dish has great service there, you may not need fiber all the way out down the long road in a rural area to serve the premises. Assuming that can be adjusted, I think it's pretty achievable and my hope is that the money will be deployed. In the past, these rural programs have been plagued by a lot of interest in getting the money committed, and then not as much interest in actually using it.

ADAM SHAPIRO: You know, it's interesting. Because when we talk about 5G, as I've understood it, when you cut the cable-- I mean, you could cut it here in New York City and destroy everything through 5G, and get the kind of data that you need for video, for all of it. But in the rural communities, the Trump administration was allocating billions of dollars to do what we're talking about. Have you seen that money deployed, and do you expect the new infrastructure bill to add on top of it?

ALEX GELLMAN: You know, mostly not deployed. I might get myself in trouble here, but mostly not deployed yet. It is a cumbersome process of how it's allocated, and then the companies that receive the funding have to deploy. So a lot of it has not been deployed of the last round, which was an $8 billion fund. Now we're talking about something on the order of $90 billion. So it will require a lot of work to get that allocated, and I would love to see it deployed faster.

You know, it's an interesting public policy. We have an auction that occurred recently that raised over $80 billion for selling Spectrum to the big carriers. There's not a lot of real requirements on them to build out rural areas. But then we turn around and allocate a similar amount to bridge the digital divide. It seems to me like it would make more sense to say to the carriers who buy the Spectrum in the auction, we'll give you a major discount if you serve the rural areas. If you don't, we'll take your Spectrum back. They'll serve the areas if you do that.

ADAM SHAPIRO: It's interesting. Our current parent company, Verizon, is investing big in 5G, and your company is a company that makes it possible to bring it to everybody. Alex Gellman, VerticalBridge CEO, thank you so much and good luck as we go to "5gee" nationwide.