Why Airlines Are Worried About 5G

A cellular tower disguised as a palm tree in Los Angeles.Credit…Patrick T. Fallon/Agence France-Presse — Getty Images

Airlines and 5G: What’s the deal?

AT&T and Verizon’s expansion of nationwide 5G service, which was delayed for months because of concerns about airplane safety, kicked off yesterday without the travel chaos that airline executives had warned about. A last-minute deal to restrict the high-speed cellular service near airports avoided mass cancellations, and the F.A.A. expanded the list of planes approved to land in low-visibility conditions at airports where 5G service is deployed, the focus of airlines’ concerns.

But the 5G issues for both airlines and wireless carriers are still far from resolved.

How we got here: Radio altimeters, which were developed in the 1920s and help pilots determine a jet’s altitude and its distance from other objects, use frequencies closer to the ones used by 5G services than earlier generations of cellular service. Aviation experts warned that 5G interference could have rare but catastrophic consequences for air travel, as some planes may not be able to land at airports near 5G towers. The F.C.C. and the wireless carriers largely dismissed those concerns. AT&T and Verizon last year collectively paid more than $80 billion for 5G spectrum licenses.

Lingering issues: AT&T and Verizon agreed to temporarily restrict 5G in a two-mile buffer zone around a number of large airports, which degrades speeds for users in those areas. For airlines, the biggest issue is how altimeters interact with automated systems. Boeing 787s, for instance, use altimeters to control when reverse thrusters fire on landing. Last week, the F.A.A. said that it had detected “anomalies” of the 787 that could cause 5G interference to affect automated systems, including “degraded deceleration performance, increased landing distance and runway excursion.”

What’s next: The airline industry has been working on new standards for altimeters, but they are not scheduled to be released for review until October. The most likely solution is to spend hundreds of millions of dollars, or perhaps billions, to fix airplane altimeters and reprogram automatic flight systems.

The big question is who pays: airlines or wireless carriers? Harold Feld, a senior vice president at Public Knowledge, a research and advocacy group that has received funding from AT&T and Verizon, told DealBook: “The problem here is because the F.A.A. didn’t have a handle on the extent of the problem until last week, it is going to cost someone a boatload of money.”


The Nasdaq hits correction territory. U.S. markets fell yesterday, extending recent losses, with the Nasdaq dropping 10 percent below its all-time closing high, the technical definition of a “correction.” It’s a sign of investors paring riskier assets as they prepare for higher interest rates. Speaking of which, President Biden said yesterday that he supported the Fed tightening monetary policy.

Starbucks walks back its coronavirus vaccine mandate. The coffee giant told employees that they would no longer be required to get vaccinated or take weekly tests, citing the Supreme Court’s ruling blocking the federal mandate for large employers. Some labor lawyers expect other companies to follow suit.

Unilever ends its quest for GlaxoSmithKline’s consumer venture. In declining to raise its takeover bid above 50 billion British pounds ($68 billion), which Glaxo had rejected as too low, Unilever is essentially walking away from a deal that its investors disliked. But Unilever now faces pressure to find new areas for growth.

Questions arise about Bobby Kotick’s exit pay package. Amid accusations of sexual harassment and discrimination at Activision Blizzard, an investor that had called on Kotick to resign as C.E.O. of the game maker, argued for limits to any payout he would receive upon leaving if the company is sold to Microsoft.

The S.E.C. weighs tighter disclosure rules for hedge fund investments. The agency’s chairman, Gary Gensler, said he may require investors that amass at least 5 percent of a company’s shares to reveal that information more quickly than the current 10 days. That could hurt activist investors, who critics say can build up big stakes in their targets before having to disclose them.

What New York has on the Trumps

It hasn’t been a good week for former President Donald Trump, including a defeat yesterday at the Supreme Court and new revelations about his SPAC deal. But his biggest headache has been fresh accusations by New York State’s attorney general, Letitia James, over what she said were financial misrepresentations of several assets. The question is whether that was fraud or just hyperbole.

Trump is accused of inflating the value of assets more than a dozen times, in instances involving his Trump Tower penthouse, several golf clubs and even his personal brand. That allowed the Trump Organization to collect favorable loans, insurance coverage and tax benefits, which could bolster any civil fraud lawsuit that James may file against Trump and his company.

But there are limits to the damage this could cause him. James noted that some of the statements had not been audited or authenticated. And while James could pursue financial penalties in any civil case, some legal experts say it’s unlikely she could shut the Trump organization down altogether.

Trump still faces battles on other fronts. The Times reports that his media start-up faced difficulty raising money for a so-called PIPE investment for its deal to go public via a blank-check fund; the transaction is still under regulatory scrutiny. And the Supreme Court rejected his request to block the release of White House records concerning the Jan. 6 attack at the Capitol, clearing the way for House investigators to receive those documents.

Making bank

America’s biggest banks ended earnings season with a bang: Bank of America and Morgan Stanley bucked the trend at most of their rivals by reporting higher fourth-quarter profits. That propelled both firms to the highest annual earnings in their history, an achievement that other lenders can also make, despite not ending the year so bullishly.

How much longer can revenue outpace costs? Bumper deal volumes brought in huge profits for big banks last year, but the intensifying war for talent also led to a 15 percent increase in compensation costs. (JPMorgan Chase has raised junior bankers’ salaries for the second time in seven months, Bloomberg reports.) If deal making slows down, the pressure on pay could put a more noticeable dent in profits this year.

Crypto’s power play

Cryptocurrency executives are lobbying lawmakers to embrace blockchain technology, but the industry has a sustainability issue tied to its heavy energy use. Today, members of the House energy committee will hold a hearing on “Cleaning Up Cryptocurrency: The Energy Impacts of Blockchains,” and the experts called as witnesses will try “to turn the conventional narrative on its head,” as John Belizaire, chief of Soluna Computing, put it in his written testimony.

“Crypto’s energy consumption is a feature, not a bug,” Belizaire wrote. Crypto miners need energy, and wind and solar power can’t easily be stored at scale, so his company’s “green data centers” can buy the excess energy generated by renewable power plants. Belizaire contends that Bitcoin’s energy-intensive “proof of work” mining method creates opportunities: “Computing can be a catalyst for growth in clean energy.”

But crypto strains grids — and the patience of officials. Crypto’s energy use is a major concern for the House committee’s chairman, Frank Pallone Jr., Democrat of New Jersey, who called the hearing today. In the U.S., frictions have been emerging between environmentalists and crypto mining companies. In Europe, Erik Thedéen, the vice chair of the E.U.’s markets regulator, this week proposed a bloc-wide ban on proof-of-work crypto mining. Russia’s central bank today proposed banning all crypto mining. China banned crypto mining last year, driving miners to Kazakhstan, where they were first welcomed but now face challenges.

A Guide to Cryptocurrency

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A glossary. Cryptocurrencies have gone from a curiosity to a viable investment, making them almost impossible to ignore. If you are struggling with the terminology, let us help:

Bitcoin. A Bitcoin is a digital token that can be sent electronically from one user to another, anywhere in the world. Bitcoin is also the name of the payment network on which this form of digital currency is stored and moved.

Blockchain. A blockchain is a database maintained communally, that reliably stores digital information. The original blockchain was the database on which all Bitcoin transactions were stored, but non-currency-based companies and governments are also trying to use blockchain technology to store their data.

Cryptocurrencies. Since Bitcoin was first conceived in 2008, thousands of other virtual currencies, known as cryptocurrencies, have been developed. Among them are Ether, Dogecoin and Tether.

Coinbase. The first major cryptocurrency company to list its shares on a U.S. stock exchange, Coinbase is a platform that allows people and companies to buy and sell various digital currencies, including Bitcoin, for a transaction fee.

Crypto finance. The development of cryptocurrencies spawned a parallel universe of alternative financial services, known as Decentralized Finance, or DeFi, allowing crypto businesses to move into traditional banking territory, including lending and borrowing.

NFTs. A “nonfungible token,” or NFT, is an asset verified using blockchain technology, in which a network of computers records transactions and gives buyers proof of authenticity and ownership. NFTs make digital artworks unique, and therefore sellable.

Crypto supporters know that sustainability must feature in policy proposals. “This industry has a critical role to play,” said Tomicah Tillemann, who leads policy at KRH, the new crypto venture firm run by the former Justice Department prosecutor Katie Haun. She hired Tillemann at KRH, DealBook is first to report, after also recruiting him at her previous firm, Andreessen Horowitz, during a D.C. lobbying blitz. These efforts have had “an outsized impact on shaping sentiment” about the crypto industry, according to Rachael Horwitz, KRH’s communications chief. Some of the industry’s contentions will be tested before Congress today.

Remembering Dennis Hersch

Dennis Hersch, a longtime deal maker who helped put together some of the biggest transactions in recent decades, died on Tuesday in New York at age 75. The cause was cancer, according to his son Gregory Hersch.

A senior deal maker in law and banking. Hersch rose up the ranks at the white-shoe law firm Davis Polk over 35 years, becoming the chairman of its M.&A. department and working on deals like Comcast’s takeover of AT&T Broadband and Texaco’s sale to Chevron. In 2005, he joined JPMorgan Chase as chairman of M.&A., working with another lawyer turned banker, Rob Kindler.

Another career change followed, as Hersch left JPMorgan in 2008 to work for Les Wexner, the founder of L Brands. (He was also a director of the clothing company from 2006 to 2019.) Hersch also served on other boards, including the telecom Clearwire and the investment bank PJT Partners.



  • Leon Black accused his fellow Apollo Global Management co-founder, Josh Harris, of trying to oust him from the private equity giant. (FT)

  • Carlyle is reportedly planning to raise $8.5 billion for its latest European buyout fund, its biggest ever. (Bloomberg)

  • A Chicago media nonprofit group is poised to buy The Chicago Sun-Times. (NYT)

  • Peloton execs and insiders sold nearly $500 million of stock, mostly via prearranged trading plans, before a steep drop in teh company’s share price. (CNBC)

  • “Tech Start-Ups Reach a New Peak of Froth” (NYT)


  • A group of insurers that pledged to help eliminate carbon emissions is confronting an unforeseen problem: antitrust laws. (Bloomberg)

  • More than 450 scientists have called on P.R. and advertising firms to stop working with fossil-fuel companies. (WaPo)

  • Washington must do more to help minority-owned banks, argues Gene Ludwig, a former banking regulator and the founder of the financial consultancy Promontory. (Politico)

  • “Lina Khan Is (Still) Bursting Big Tech’s Bubble” (NYT “Sway” podcast)

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  • Here’s the trailer for “WeCrashed,” Apple TV+’s drama series about the rise and fall of WeWork. (YouTube)

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