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5G wireless will drive economic growth for decades to come, but we need a comprehensive strategy to ensure a robust deployment and adoption of secure networks. A U.S. strategy for 5G should play to our strengths to overcome unfair practices that have made Huawei a leader. Rob and Jackie discuss why 5G is important, separating hype from reality, and what a national framework should look like with Doug Brake, Director of Broadband and Spectrum Policy at ITIF and author of “A U.S. National Strategy for 5G and Future Wireless Innovation.”
- Doug Brake, “A U.S. National Strategy for 5G and Future Wireless Innovation” (ITIF, April 2020).
- Blair Levin and Larry Downes, “The Internet After COVID-19: Will We Mind the Gaps?” (Aspen Institute, April 15, 2020).
- Atkinson and Whisman, hosts. “What the COVID Crisis Teaches Us About Broadband Policy, With Special Guests Larry Downes and Blair Levin,” Innovation Files, ITIF, June 2020.
Rob Atkinson: Welcome to Innovation Files. I’m Rob Atkinson, founder and president of the Information Technology and Innovation Foundation. We’re a DC based think tank that works on technology policy.
Jackie Whisman: And I’m Jackie Whisman. I handle outreach at ITIF, which I’m proud to say is the world’s top ranked think tank for science and technology policy.
Rob Atkinson: And this podcast is about the kinds of issues we cover at ITIF, from the broad economics of innovation to specific policy and regulatory questions about new technologies. And in this particular episode, we’re going to be talking about 5G and wireless innovation. 5G is going to help drive economic growth for decades to come. But in our view, we need a comprehensive national strategy to ensure robust deployment and adoption of secure networks.
Jackie Whisman: We brought in the big guns for this conversation.
Rob Atkinson: That’s right. The brilliant Doug Brake of ITIF I’m sure you’ve heard of him.
Jackie Whisman: I have, yes. Doug Brake, is director of broadband and spectrum policy at ITIF and writes extensively on topics such as next generation wireless, rural broadband infrastructure and net neutrality. He’s here today to talk about his recent report, a “U.S. National Strategy for 5G and Future Wireless Innovation.” And Doug frequently humors my extremely elementary questions about telecom policy. So he’s very kind and brave to have accepted this invitation. Thanks for being here, Doug.
Doug Brake: Oh, absolutely. It’s an honor. I appreciate the opportunity to be on the podcast.
Jackie Whisman: So I’m going to start off with a question that I know might seem silly for you and Rob, but the rest of us may not totally understand, what is 5G?
Doug Brake: Oh sure. Yeah. No, a lot of people, I feel like can be a little confused over what exactly 5G is. I mean, in the short, simple answer is there’s just the next generation of wireless technology. It says we had 1G, 2G, 3G, 4G this is the next step. It’s really a cluster of recent developments in wireless technology that are all stitched together by a new wireless standard called New Radio or NR, which is active, not so creative name. But this transition going from 4G, the LTE standard to this new radio, this sort of new language that your phone uses to talk to the cell tower means a transition: new phones, new devices, new equipment on cell towers. So it’s a big change through the entire industry, a big leap from 4G to the next generation 5G.
Rob Atkinson: Doug, there’s a lot of hype out there about 5G, there’s a lot of hype out there, frankly, about a lot of technologies, but I think 5G is probably at the top of the Gartner hype cycle, if you will. You hear things like you can download any 4K movie in three seconds, you can have robotic surgery. I even read once that the U.S. risks falling behind on 5G because we’re not going to be able to fire our missiles in the South Asian sea. Can’t do that anyway, because you don’t have radio spectrum there. But at the same time, it’s not just an incremental shift from 4G. It’s something bigger. So what’s really the reality behind that.
Doug Brake: No, you’re right. It’s true. I do worry that there is a risk that 5G has been oversold at least in some circles or sort of misunderstood, but it really is an exciting platform, right? Even if it’s at the top of the Gartner hype cycle, and maybe there’s some sort of a realigned expectations that we’re going to go through, eventually, once it’s adopted and out there, there really are some tremendous advantages to it. I think the best way to think about it is really a much more flexible platform compared to 4G. 4G can do one thing really well, mobile broadband, mobile broadband, to a cell phone. It can do that really well. But 5G is able to make trade-offs and obscure sort of technical characteristics, in order to perform very well for different types of applications.
If you want distributed internet of things connections, where you have just a tiny sip of data every day or so, but you want to have a battery life that could last a decade, they can tailor the connection to do that. If you want to have augmented reality with really high throughput, with a lot of sort of image recognition, a lot of battery intensive processing that you can put in the cloud right next to the cell tower, it can do that much better than you can do over LTE. The talk about robotic surgery, it doesn’t sound very realistic. At least I would not be signing up anytime soon to have robotic surgery at a distance on myself, but I think it’s more used as an example of the level of confidence people have in the technology that the connection will be secure and will work. And the low level of latency, where you’re able to control very delicate processes with a very tight time schedule.
Rob Atkinson: I think one of the things that sometimes people miss is we, the U.S., led to in 4G, what was the LTE standard, which almost all of us have on our phones now. And it was, if you can go back and remember 3G, LTE was so much better. And that really was the enabling platform for all of these great applications that we live with and enjoy today. For example, Uber and Lyft, those really would have been much harder applications in 3G. So we created this platform and then it enabled American internet companies to really innovate on top of that. And that’s why I think there’s a lot of concern today about the U.S. Not falling behind, particularly China, because this is a platform that enables innovation all around it. So how do you think the U.S. Is doing on this particularly compared to China, but also other regions like Europe?
Doug Brake: I think part of it depends on what you’re measuring, like sort of, there are different flavors of 5G, different components to it. But at a high level, I’d say the U.S. Is doing quite well, especially when it comes to the sort of initial deployment. We have number of companies have invested a tremendous amount of private capital in order to deploy, at least begin on the initial deployments of 5G. Part of it is a question about the particular type of spectrum companies are using. And the U.S. In particular, and this is maybe getting a little technical, but the U.S. In particular is leading the rest of the world when it comes to high band spectrum. This is a new type of spectrum that previously was not thought to be very useful for mobile communications. The U.S. Is way on front and allocating the spectrum for 5G and companies are already starting to build out on this spectrum.
Initial use cases for this are mainly for the fixed wireless to the home, seeing increased competition with fixed wireless or fixed broadband at the home. And so I think a wonderful story of dynamic competition in other regards, particularly when it comes to the manufacturing of equipment for 5G the U.S. We can get into later on, does not have its own equipment manufacturer. So in that regard, it’s somewhat behind. But when it comes to leadership and developing the foundational technology, the underlying technology and actually getting the systems out there, we’re up there with the best of them.
Jackie Whisman: In your report, you call for a national strategy for 5G. Can you talk about why this is necessary?
Doug Brake: Need a national strategy for a handful of reasons. First of all, there’s the obvious issue, sort of the positive spillover effects. If we can get 5G a large enough platform of 5G deployed out there, you see all sorts of benefits to productivity growth. And productivity growth in traded sectors, you can get really smart agriculture to boost our trade and agricultural products. I mean, there are all sorts of opportunities to boost economic growth in a wide variety of sectors. So if you can get the platform out there early and gain those competitive advantage, it’s a huge boon. There’s also this sort of chicken and egg problem where part of what drives the adoption of 5G networks is the demand for these new applications. But it’s difficult to develop the new applications that really take advantage of the leap in performance without already having the network out there.
And so there’s this potential mismatch in supply and demand. And so policy can help advance that fly wheel, get that spinning in order to see the development of applications that drives the demand that drives the investment. There’s also this bucket of worms around Huawei and potential security risk that I think deserves a more unified, more constructive policy response. So far the response from the U.S. government has been somewhat scattered. I think it’s fair to say somewhat disjointed with a range of policy responses from different bodies within the U.S. government.
Jackie Whisman: So what should a national strategy consists of?
Doug Brake: We kind of break it down a national strategy for 5G should consist of really three kind of general buckets of issues. One is the deployment of 5G. One is the adoption, and then there’s this whole issue around security, China, and the sort of ongoing longterm wireless innovation. Sure, deployment, there are two real obvious policy levers for trying to advance 5G deployment. First is spectrum policy. And the second is infrastructure policy. So spectrum policy, as I mentioned, the U.S. Is really a leader when it comes to the deployment or the allocation really of high band spectrum of millimeter wave spectrum. But it really could do with additional mid-band spectrum in the pipeline. Long story short, you have different flavors of spectrum with different physical characteristics. Low-band spectrum tends to have great coverage, but relatively little bandwidth, relatively little throughput. Whereas high band spectrum on the other end has tremendous capacity for download speeds, right. And great amount of bandwidth.
But just the physical limitations of the spectrum. It doesn’t go very far. It doesn’t get through buildings quite as well. And this mid-band spectrum is really in the sweet spot that leverages new breakthroughs and antenna technology, to really have the best of both worlds of coverage and capacity. So getting more mid-band spectrum out to commercial users, that should be a real priority. There are some options on the table, but I think it would be great if those could be accelerated in the same vein infrastructure policy. Part of the transition to 5G has this moved towards an architecture of more densely deployed networks of small cells, so smaller, less obtrusive, but certainly more numerous small cell towers, small cells, they call them. So much of our infrastructure policy that governs the deployment of wireless towers and cell sites on top of buildings, was written with the assumption that we’re talking about a 200 foot tall cell tower, not something that’s the size of a smoke detector or a pizza box or something like that.
And so a rethinking of a lot of our infrastructure policy, and this is at the federal down to the local level, I think is warranted to help speed the deployment.
Rob Atkinson: Doug, on that question, if you compare us with China, China has had it as a national goal that they’re going to lead the world and 5G at least deployment. And they don’t let the local governments really decide this. They tell the local government, if you want all the perks that come from Beijing, you better get this deployment out there as soon as possible. There’s no worries about, Oh, we better slow this down, or there’s no Chinese governments that are saying, well, let’s see if we can raise taxes on China mobile and get a bunch of money out of it. They’re just going whole hog at it. The central government told them they have to, can you compare that to the U.S. Where it’s much more decentralized. You’ve got a lot of mayors out there who look at this as a cash cow and they don’t really care whether they’re charging money and fees and the light. They don’t really care if they’re slowing it down that much. How are we going to deal with that?
Doug Brake: Yeah, no, that’s absolutely right. There’s a real stark difference between the sort of general structure under which U.S. Operators deploy this technology under compared to those in China. You’re exactly right, where China is able to just sort of steamroll this equipment out there and they have moved quickly in doing so as well. In the U.S. Right, we have this issue where, especially in sort of wealthier more tech-forward cities, the mayors can sometimes see this as an opportunity to extract fees on wireless cell siding applications. Where they know like if they can set the fee level so high, then operators will still want to deploy their, right, demand is still high enough. But the fee gets passed onto the operator that then has to recoup that through its entire footprint. So you have a real problem where the local interest doesn’t always align with the national interest. It also just from a sort of government standpoint, can sometimes get pushback at a local level on issues that are not always so legitimate. There’s some conspiracy theories out there related to 5G and COVID, just sort of really off the wall concerns.
Jackie Whisman: I send them all to you.
Doug Brake: I appreciate the constant flow of memes.
Jackie Whisman: I hope you haven’t missed any, I’m happy to send more memes your way if you need them.
Doug Brake: Keeps me entertained, insane. But yeah, no. So you get this sort of ground up pushback, even on issues that are not really well founded in the science or in reality, really. But mayors in city councils have to deal with these local concerns. And so finding a way to streamline this process would benefit us all in the long run.
Jackie Whisman: What about adoption? The second part of your plan.
Doug Brake: As I mentioned, we’ve got this kind of chicken and egg problem where to really see the biggest benefit from 5G, some of those applications take advantage of the real gains and performance we see between 4G and 5G. Those require kind of R&D and development in their own, right. And when we’re talking about sophisticated manufacturing processes, being augmented by digital twins, run in a local cloud infrastructure on the side of a factory or something like that, right? Like these are really advanced technologies that require a lot of R&D in their own right. And so I think any sort of policies that can help advance along a wide range of different emerging technologies, artificial intelligence, advanced manufacturing, smart cities, to help drive the demand for this sort of large platform of wireless connectivity will help us in the long run. Really, every agency should have a strategy for encouraging the adoption within their sort of own industry area, as well as within their own processes. Oftentimes the government can be a strong first adopter with these sorts of technologies.
Jackie Whisman: It seems like this is even more urgent now with COVID kind of changing the way that we really exist. We went into this with Blair Levin and Larry Downs in episode five, kind of following up on a recent paper that they released. And we can link that in the show notes because they referenced your report too.
Doug Brake: Oh, wonderful. Yeah, no, those guys are very thoughtful. Yeah, no, and that’s absolutely right. The sooner we can get robust wireless 5G networks out there, the more connectivity we’ll have, especially in these days of social distancing, it’s incredibly important.
Jackie Whisman: Security. Rob has lots of thoughts.
Rob Atkinson: We need security.
Doug Brake: We do. Yes. Yeah.
Rob Atkinson: Obviously this is the big kahuna because not just the Trump administration, but the quote, “five eyes” intelligence services of our allies have all asserted that the Huawei or ZTE equipment is not secure and open to hacking or spying. And therefore the U.S government has banned Huawei equipment here. As I think most people know the Canadians decided to go with a European providers what’s going on there. How does that ban affect our ability to deploy those sorts of questions?
Doug Brake: Yeah, sure. I mean, it’s a whole big can of worms, right? I mean, there’s a lot of concern around the continued rise of Huawei that really now is a global tech juggernaut and particularly where it comes to it’s high performance and low cost equipment in the radio, what’s called the radio access network. I mean, there’s equipment in recent years and the market’s down to Huawei, Erickson and Nokia. So there’s sort of this longterm concern that if you have just a handful of suppliers of this type of equipment at some point corner the global market for this particular type of equipment. So this has raised all sorts of security concerns, concerns around risk and longterm, a can of worms. There is a real concern, right? The Huawei, which now is, is really a global tech juggernaut has seen a tremendous gain in market share, particularly in this one piece of equipment, a very important piece of equipment for the network radio access network equipment.
So that part of the market is really down to three major providers, Ericsson, Nokia, and Huawei. And smaller providers also ZTE, Samsung has made a play, but it’s, but they’re really three major providers. Huawei conceived continued gains has grown as market share tremendously, continuing to pour a tremendous amount of capital into R&D. And is, I should mention pollster by numerous unfair trade and trade practices on the part of China, as well as subsidies, illegal subsidies, especially when Erickson and Nokia, as a great company as they are on somewhat shaky financial footing. At least there’s potential, right? That Huawei could continue to gain market share and eventually corner of the global market. And if things go on change, so this presents all sorts of security questions, right? I mean, there’s the acute sort of short term security risks.
Do you really want the critical infrastructure of your country to be run by a company that is at least under the jurisdiction that have control of one of our primary geopolitical rivals? So there’s this sort of short term risk of IP theft or espionage, or potentially even sabotage that is out there, that right, is circulating the policy conversation. There’s also this sort of longterm innovation or competitiveness economic challenge Huawei continues to gain market share unchanged, and the other two providers continue to lose market share and what that means. So there’s a lot of policy questions around that. And to my mind, it’s best to sort of break those challenges down to have.
I mean, when you think about the short term security risk, the real easy answer there is to just not use Huawei equipment in the United States. And try to convince like-minded allies to not use it as well. So that there’s a sufficiently large market for the sort of trusted network equipment vendors to be able to participate. But longer term, we need to work on innovations that can help move us towards an ecosystem with a more diverse and broader number of different suppliers for radio access network equipment. A lot of important questions around.
Rob Atkinson: Doug, I think as you know, ITIF is going to be releasing a new report very shortly. Looking at the effect of Chinese innovation mercantilism and the telecom equipment industry. So particularly as it has affected Huawei and GTE. And looking at this question of how has it affected innovation around the world. And we come to a very clear and stark conclusion that these policies have actually hurt innovation. Huawei is big, but when you really dig into the numbers, for example, standard essential patents as a share of revenue standards, contributions as a share of revenue, R&D as a share of revenue. Huawei is a laggard, ZTE is a laggard companies like Ericsson, Nokia, and even Samsung. Samsung is incredibly innovative in these measures. So I know there are some European carriers you say, Oh, we can’t ban Huawei because we’re going to end up with a duopoly.
I actually think that’s completely wrong. We’ll end up with a tri-opoly, if you will. Samsung would gain market share, and we’d have three very innovative companies. But that’s, I think one of the big challenges right now, you have a lot of carriers, particularly in Europe, who are really looking at the short term. They just want cheap networks. They’re frankly, not as interested in getting better networks and more innovative networks. And so I think that’s really one of the big challenges in this space. The U.S., As you pointed out, isn’t in that space, we’ve already made that decision and we’re going to go with a foreign carrier like Ericsson or Nokia or Samsung.
Doug Brake: Part of the challenge too, especially for Eastern European countries is there’s been a real difficulty in getting existing LTE network, existing 4G network that is built by Huawie to communicate with new 5G equipment built by other vendors. I think this is kind of an underappreciated challenge. This is why I think you saw the policies out of the UK allowing for 35% of the network to be a supplied by Huawei. And I think that you’ll continue to see that in some European countries, particularly Eastern European countries that have significant amount of Huawei 4G equipment. And so I think the goal should be to offer an alternative to something that works better for these countries, for the operators that already have Huawei equipment that can provide an alternative that isn’t just the same old game of traditional radio access and network equipment. And that’s where, to my mind the OpenRAN is what they call, is where you have the interfaces between different parts of that equipment are openly standardized and defined.
And so you can have different companies specialize in different components of it, a much more modular system. And also some of those pieces of equipment can be run over. Basically commercial server infrastructure can be virtualized in running software. And I think this is the answer to see a much more diverse ecosystem in this particular area of equipment, that I think will lead to faster pace innovation and lower cost deployment. Lower costs for network operators, and also make it much more difficult for Huawei to eventually corner this market.
Rob Atkinson: Just as a last point there, that is one of the U.S. strengths. We haven’t done as well in telecom hardware. We still have Cisco, which is more enterprise hardware. We are doing well in software and OpenRAN has a software application. So maybe that plays to our strengths.
Jackie Whisman: So one final fun question. If Congress were to invest an extra, a hundred billion dollars on technology, what should it do with that money?
Doug Brake: Men, a hundred billion dollars. Are we talking a hundred billion dollars just for 5G? That would be fantastic.
Jackie Whisman: Well, yeah, you can decide for what it does.
Doug Brake: Yeah. I mean, to be clear 5G, right? It should be private sector led private sector driven. At the same time you’re always going to have a section of rural America, where the economics just don’t make sense for private capital to try to seek a return there. So at least a chunk of that a hundred billion, should certainly go to supporting subsidizing the deployment of 5G as well as wired internet in rural areas. Another obvious opportunity is just around R&D the National Science Foundation, the national labs already invest a fair bit in wireless R&D, but it certainly should be increased, especially if we’re going to sort of skate to where the puck is going and try to increase our U.S. Competitiveness in the provision of this wireless equipment. R&D is certainly an opportunity. Particularly, as I mentioned, I think one of the exciting opportunities is around these OpenRAN is defining the specifications between the components and the radio access network, gives us a opportunity to potentially see a U.S. manufacturer for this new type of 5G equipment.
And there, I think there’s an opportunity with the Manufacturing USA program. This is a program administered by NIST that really brings together industry academia and the public sector to try to increase U.S. competitiveness for the manufacturing of technology that’s undergoing transition. This transition from traditional radio equipment to this new, more openly defined more virtualized system is exactly the type of opportunity that I think Manufacturing USA program would be well suited to address. We should see a new Institute focused on this 5G or 6G equipment manufacturing, to bring together we have something of a mismatch where we have large operators looking to invest looking for this opportunity in new types of equipment. And then very small startups that are trying to build it. So something we could help see that sector grow would be fantastic.
Jackie Whisman: Well, thanks for being here, Doug. Can you tell our listeners where they can find you follow your work? Follow my, harassing you on Twitter.
Doug Brake: Yeah, absolutely. Twitter I’m @DBrakeITIF then you can find all of my writing at the ITIF website, itif.org. You can sort by broadband or wireless, and that’s where you find most of my stuff.
Jackie Whisman: Or just sort by you.
Doug Brake: Yeah, that’s true. That’s true.
Jackie Whisman: Well, thanks again, Doug. And that is it for this week. If you liked it, please be sure to subscribe and rate us. Feel free to email show ideas or questions to podcast at itif.org. You can find the show notes and sign up for our weekly email newsletter on our website, itif.org. You can also find all Doug’s work there and follow us on Twitter, Facebook and LinkedIn, @ITIFdc.
Rob Atkinson: So that’s it for now, but we have more episodes and great guests coming up, including several with leading members of Congress who are driving technology policy in Congress. New episodes will drop every Monday morning. So we hope you’ll tune in next week.