LIZA TOBIN, WARREN WILSON, and CONNOR MARTIN
WASHINGTON, DC – No industry embodies US ingenuity more than telecoms. American innovators spearheaded the development and commercialization of the telegraph, the telephone, the internet, and the cellphone. Today, the latest generations of these telecom networks, including 5G and 6G technology, coupled with the artificial-intelligence revolution, are driving even more powerful capabilities.
The result is a rapid convergence of the physical and digital domains, which could bring huge economic rewards. In the future, 5G-enabled factories could see 20-30% productivity gains, and greater industrial automation, in the form of smart robots, could make workers more efficient. Smart cities could leverage cloud-connected sensors and AI capabilities to redirect traffic flow and optimize energy grids, saving money and reducing carbon dioxide emissions. The deployment of 5G is projected to contribute up to $1.7 trillion to US GDP in the next decade, while enabling an estimated $13.2 trillion of global economic output by 2035.
But the United States has almost allowed these opportunities to slip away, with potentially dire consequences for national security and prosperity. As part of a brute-force strategy to displace the rules-based world order, China has sought to use national firms Huawei and ZTE to dominate next-generation network infrastructure. American missteps also contributed to China racing ahead in the production and export of network hardware, leaving the US and other countries vulnerable to economic coercion and threats to sensitive data and critical infrastructure.
No longer oblivious to the danger, the US has taken steps to address these vulnerabilities, including a ban on new Chinese-backed telecom equipment. But those of us who served in government while Huawei surged ahead to become the world’s largest telecom equipment producer had nothing to offer when partner countries asked for an exportable, end-to-end American alternative.
More alarming still, China’s ambitions are extending to other networking segments where the US remains competitive. While the US remains a global leader in producing fiber-optic cables through firms like Corning, for example, China is ahead in the share of fiber-optic cabling in its broadband mix (95% vs. 16%) and in the share of global exports (28% vs. 14.4%). In subsea cables, China is aggressively pursuing market share through firms like HMN Tech, challenging American firms like SubCom.
China is also competing in satellites – a sector led by the US, which recently released the National Low Earth Orbit Research and Development Strategy – by designating satellite internet as a national “new infrastructure,” with plans to launch nearly 13,000 low-earth orbit satellites by 2035. In cloud computing – a sector worth $544 billion globally and also dominated by US firms – Chinese tech giants Huawei, Alibaba, and Tencent are making inroads in Asia, Latin America, and Africa.
Despite sounding the alarm about Chinese firms, US policymakers have not formulated a strategy to develop and deploy next-generation networks. By contrast, China has a comprehensive strategy to upgrade its digital infrastructure and realize the potential of the data economy. Equally worrisome is that for the first time in 30 years, Congress in March failed to renew the Federal Communications Commission’s (FCC) authority to auction radio spectrum to the private sector, freezing access to an increasingly scarce resource that is crucial to launching and scaling advanced networks.
To reassert American leadership, the Special Competitive Studies Project has developed a four-step Action Plan for US Leadership in Advanced Networks.
For starters, government leaders must set audacious “moonshot” goals to lead the world in the development and deployment of advanced-network technology. The most critical goal should be full, interoperable connectivity. Given that networks are only as powerful as the number of nodes connected to them, efforts to build infrastructure should focus on providing the broadest possible reach and connectivity. That means linking different pieces with the goal of preventing “dead zones,” as well as supporting applications across sectors.
The US should also strive to lead free-space optical networks – wireless laser communications that are potentially faster and more secure than radio transmissions – and to win the 6G race. It can achieve the latter by leveraging Open Radio Access Networks, which allow mobile networks to run on mix-and-match hardware-software combinations, rather than current RAN solutions that require buying the full-stack solution from a single provider.
Second, the government must build stronger domestic supply chains for network components by offering significant financial incentives to develop and scale production, and by “friend-shoring” those parts that cannot be sourced locally.
Third, US strategy must drive demand for advanced networks by creating financial incentives to support the development of AI-enabled, productivity-boosting applications. The government-funded, small-scale “5G Innovation Zone” testbeds are not enough.
Instead, the creation of an Operation Warp Speed for 5G Applications – similar to the program for COVID-19 vaccines – could foster first-mover advantage in strategic industrial and security sectors through purchase guarantees and procurement. Reauthorizing the FCC’s authority to auction spectrum would also aid innovation, as would reintroducing and enacting the Spectrum Innovation Act, which calls for making mid-band spectrum – ideal for 5G networks and applications – widely available to the private sector.
Lastly, the US should work with allies and partners to shape international networks. But to export alternatives to Chinese 5G-network hardware and to compete with China in developing countries, America needs to invest in its own network strategy and leverage technologies that it still dominates, such as satellites, fiber optics, and cloud computing.
The US would also be wise to bundle multiple technologies together in digital-infrastructure export and investment packages: a Global Tech Export Accelerator could serve as a “one-stop shop” for foreign buyers. For this to work, the US must work closely with its partners to develop a common vision for technology standards, both through existing mechanisms like the Quad and the EU-US Trade and Technology Council and a new “Free 6G Group” of likeminded governments.
Techno-economic competition will define the future, and networks comprise a key battleground. Public and private entities in the US, working together with the country’s allies and partners, must build and implement a vision for this critical sector that advances long-term competitiveness, security, and prosperity. Without American leadership, China stands to set the terms for fusing the digital and physical worlds.
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