Senators Propose $1B to Outpace Huawei in 5G. That’s Small Change

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A bipartisan group of senators Tuesday introduced a bill designed to give Chinese telecom giant Huawei more competition in the market for 5G equipment by pumping more than $1 billion into 5G-related research and development. While the funds could be a boon for smaller companies, it’s paltry compared with what the telecommunications and wireless industries already spend on R&D.

The bill doesn’t mention Huawei by name, but the bill’s cosponsors made it clear that Huawei was on their minds. The US government has long worried the company could build backdoors for the Chinese government into its products. US government pressure has prevented major carriers from using Huawei equipment in US networks, and the Federal Communications Commission has effectively banned smaller carriers from using the company’s equipment as well. But Huawei remains the world’s largest provider of telecom equipment, ahead of Sweden’s Ericsson and Finland’s Nokia.

The bill highlights ongoing concerns that Chinese companies will dominate the market for 5G infrastructure equipment, leaving carriers in the US and elsewhere with few other options.

“Every month that the US does nothing, Huawei stands poised to become the cheapest, fastest, most ubiquitous global provider of 5G, while US and Western companies and workers lose out on market share and jobs,” Senator Mark Warner (D-Virginia), a cosponsor of the bill, said in an announcement. Other Senate cosponsors include Marco Rubio (R-Florida), Bob Menendez (D-New Jersey), and Richard Burr (R-North Carolina).

A National Security Council memo leaked in 2017 proposed a nationalized 5G network in the US that would lease wireless capacity to private carriers. Under the proposal, the government would buy equipment from companies in the US or other trusted providers to help ensure that non-Chinese telecom equipment remains competitive in the market. The suggestion was panned by critics from both political parties, and the Trump administration said it was never considered seriously. The White House did, however, block the Singapore-based chipmaker Broadcom from acquiring US chipmaker Qualcomm, which designs wireless modems used in 5G phones and other equipment, citing fears that the acquisition would make San Diego–based Qualcomm less globally competitive.

Tuesday’s bill echoes those concerns but stops far short of creating a government-owned network. Instead, the bill proposes setting aside at least $750 million for grants to subsidize research and development in 5G technology. It would also provide $500 million that the secretary of state could dispense to “support development and adoption of secure and trusted telecommunications technologies” around the world. Funding would come from auctions held by the FCC for the rights to use parts of the wireless spectrum.

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Still, the spending doesn’t begin to match other companies’ R&D efforts. Huawei invested $15.3 billion on research and development in 2018, according to Bloomberg. US network equipment giant Cisco spent $6.37 billion that year, Qualcomm spent $5.48 billion, Nokia spent $5.46 billion, and Ericsson spent $4.48 billion. Meanwhile, researchers at New York University are already working on technologies that could underpin sixth-generation networks.

It also pales in comparison to existing government spending on broadband networks, such as the FCC’s Rural Digital Opportunity Fund, which is set to spend $20.4 billion over 10 years.

5G networks are already rolling out across the US and the world, especially in South Korea and China. T-Mobile’s network is already available to most of the US population, though it admits its speeds are only around 20 percent faster than its 4G network.

Nearly everyone across the US political spectrum agrees that the FCC needs to make more bandwidth available to carriers for use with 5G networks. Particularly important is what’s known as the “mid-band,” already being used by South Korea and China to build their networks, because it will make it easier to cover large swaths of the country with 5G signals.


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First appeared on Wired

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