Stop putting Band-Aids on telecom shortfalls — jump ahead to 5G

Stop putting Band-Aids on telecom shortfalls — jump ahead to 5G
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Manufacturers and policymakers are attempting to onshore more of America’s supply chains, thanks to pandemic-related shortages of everything from gaming consoles to liquor bottles. But in sectors such as batteries, telecommunications or semiconductors, U.S. firms are up against state-supported rivals with entrenched market positions and low prices that make competition all but impossible. The U.S. government will need to do more than control exports or stockpile parts to level the playing field in these foundational technologies and prevent them from becoming tools of economic warfare. 

A once-in-a-generation alignment of opportunities this year would allow the Pentagon, Federal Communications Commission (FCC) and Congress to restore U.S. competitiveness in telecommunications over the long term. Across America, 5G mobile networks are going up, which eventually will supplant the internet backbone we use for nearly all communications. With minor changes, the Pentagon’s ongoing 5G demonstrations, last year’s appropriations to replace Chinese network equipment, and the proposed Infrastructure and Jobs Act could combine to spur deployment of open 5G architectures that would create a market for U.S. telecommunications equipment builders and installers.  


U.S. government action is needed because nearly all of today’s 5G networks are proprietary systems built by foreign companies. Huawei dominates the global market, powered by sustained investment from Beijing, aggressive marketing, and manufacturing and supply chain management expertise enabled by its strong handset sales. The result is a highly integrated “turn-key” network for mobile carriers that want to sell phones, not build radio towers or lay cables. 

Recent U.S. bans on semiconductor-related exports to China and on the use of Huawei equipment in U.S. networks slowed the company’s growth. Unfortunately, while Huawei’s main competitors — Finland’s Nokia and Sweden’s Ericsson — may not pose Huawei’s security risks, their closed, proprietary networks do not help U.S. industry and cannot evolve to realize the promise of 5G.  

Analysts have noted today’s 5G networks generally provide only modest improvements over 4G LTE systems. In large part that is because their radio access and core networks rely on the same hardware-based architectures as their predecessors. Open radio access networks, or O-RAN, would allow easier installation of better hardware over time compared to integrated proprietary networks. More importantly, O-RAN would allow hardware to be virtualized, or replaced by software, which would improve performance and allow introduction of features such as machine learning and edge processing needed for applications such as traffic control or remote surgery.  

This inevitable shift to cloud-based 5G networks turns integrated architectures like those of Huawei or Ericsson into vulnerabilities and creates an opportunity for O-RAN to help restore the U.S. telecommunication industry, which largely disappeared when Lucent disintegrated 15 years ago. By enabling 5G architectures to be assembled from multiple suppliers, O-RAN would allow U.S. companies such as Mavenir, Parallel Wireless or Cisco to compete with fully-integrated foreign rivals.

As noted in our Hudson Institute study from 2020, one of the roadblocks to fielding 5G O-RAN in the United States is a lack of integrators that can help carriers compose their mobile networks the way Huawei or Ericsson do for their customers. U.S. government investment could foster the growth of system integrators, as well as an ecosystem of 5G equipment providers. 

The FCC holds one key to unlock this investment. Although Huawei is now banned from U.S. networks, its equipment is already installed in phone systems throughout the United States. These carriers, many in rural areas, lack the customer base or capital of larger counterparts AT&T and Verizon, and took advantage of Huawei’s low prices and attractive financing when building out their 4G infrastructure. Beyond the privacy risks for customers, some of these networks also cover U.S. nuclear missile fields, where they could afford China’s intelligence services valuable surveillance on the status of America’s strategic deterrent.  

To address these risks, Congress appropriated almost $2 billion in 2020 for the FCC’s fund to rip out and replace equipment from Huawei and other suppliers that pose security risks. Although not prohibited by the legislation establishing the program, the FCC rule governing use of these funds prevents them from being used for improvements such as upgrading to 5G. As a result, affected 4G networks will replace their hardware with proprietary systems from Ericsson, Nokia or Samsung, shutting out U.S. suppliers and delaying a transition to 5G that could help enhance rural economies.

Costs will likely rise if the FCC allows upgrading networks to replace Huawei hardware, which was the original rationale for prohibiting improvements to network performance. Those costs could be addressed by the proposed Infrastructure and Jobs Act, which currently includes $65 billion toward expanding broadband access. Congress should direct some of this funding toward O-RAN based 5G networks, since a growing portion of Americans access the internet only via their phones. 

The Pentagon could address its own needs and foster the U.S. 5G industry by helping refine O-RAN technologies through its ongoing demonstrations. The Senate Armed Services Committee version of the fiscal year 2022 Defense Authorization Act added $100 million to the Department of Defense’s (DOD) 5G initiative. If Congress appropriates these funds and allows demonstration networks to support civilian users, DOD could expand its efforts to new sites, including areas served by Huawei telecommunications equipment. 

The FCC, Congress and DOD should not miss this rare opportunity to apply billions of dollars toward the next generation in communications technology. Rather than putting Band-Aids on today’s security and broadband coverage shortfalls, the shift to 5G O-RAN will help revive the U.S. telecommunications industry and enable long-term economic growth.  

Bryan Clark is a senior fellow at the Hudson Institute and director of the Hudson Center for Defense Concepts and Technology. Dan Patt is a senior fellow at the Hudson Center for Defense Concepts and Technology.