A Memo for the President on Regaining U.S. Leadership in Advanced Networks
Hello, I’m Ylli Bajraktari, CEO of the Special Competitive Studies Project. In this edition of 2-2-2, SCSP’s Economy team makes the tech competition case for why we need a National Action Plan for the U.S. Leadership in Advanced Networks.
Advanced networks – the highways of cyberspace and artificial intelligence (AI) – remain a globally contested technology sector. The People’s Republic of China (PRC) continues to lead the United States in key metrics of fifth-generation (5G) mobile network production and deployment, with the United States holding the edge in areas like satellite connectivity and cloud computing. The fiber optic and subsea cable industries remain competitive. Yet the entire sector is evolving rapidly, and the stakes of global leadership in these technologies are too high to be left to chance.
No industry embodies U.S. ingenuity and promise more than telecommunications. U.S. innovators led the development and commercialization of the telegraph, telephone, the Internet, and cellular telephony. These technologies linked the United States with the rest of the world, and unleashed unprecedented prosperity. Today, network infrastructure is embedded with the computing, sensing, and AI capabilities that bring to life autonomy, robotics, and other applications that are changing the tech competition landscape.
Yet in the span of two decades, the United States has fallen behind China in telecommunications equipment production and export, leaving U.S. and allied networks vulnerable to security risks posed by the PRC-made network components, particularly for 5G mobile networks. PRC-based competitors are also seeking to eclipse U.S. firms in networking sectors where the United States is still competitive, including fiber optics, satellite communications, and cloud computing.
As alarm increased around these developments, the United States took steps to block PRC state-backed telecommunications gear from its telecom market and expand broadband access to more households. Yet U.S. policymakers have not put forth a strategy or sufficient funding for the United States to lead development and global deployment of next-generation networks. For the first time in 30 years, Congress failed to renew the FCC’s authority to distribute radio spectrum to the private sector, freezing access to an increasingly scarce resource crucial to launching and scaling wireless networks and productivity-boosting applications. China, meanwhile, leads the United States in licensing to commercial users its mid-band radio spectrum - the spectrum bands which offer the ideal combination of range and performance for 5G networks. Below are additional comparisons of key segments in advanced network infrastructure:
Key Areas of Comparison
Broadband and Fiber Optics Deployments and Production: Fiber optic cables and wireline technologies remain a core backbone of connectivity. China’s broadband mix includes a far larger share of fiber optic cabling than the United States, offering top-level broadband speeds, though the United States is laying more fiber thanks to the roughly $100 billion in federal broadband infrastructure financing allocated since 2018.
The United States remains a global leader in producing fiber optics, including firms like Corning. China, however, has surpassed the United States in total global exports, exporting $2.6 billion worth of fiber optics in 2021, or 28 percent of total global exports, compared with $1.2 billion U.S. exports (14.4 percent of total global exports).
Subsea Cables: Subsea cables carry 95 percent of international data flows, and U.S. firms remain competitive in this increasingly important battleground in the networking sector. SubCom remains a global leader in building these networks, yet the PRC is aggressively pursuing market share in this industry through firms like HMN Tech.
Mobile Networks and Spectrum: In the era of 5G, the role of mobile networks is growing rapidly beyond consumer communications, now encompassing fixed wireless access (FWA) broadband connections, extended and virtual reality, and other use cases. China’s major networking victory has been its domination of global 4G and 5G network equipment, and PRC state-backed firm Huawei remains the world’s largest telecom equipment producer. The quality of China’s 5G networks is marginally higher than those of the United States, but neither country has taken a clear lead in 5G applications in areas like autonomy. The United States is seeing significant uptake in the use of 5G networks for FWA broadband connections, comprising 90 percent of all new net broadband connections in 2022. Both the U.S. and PRC governments have begun planning for 6G mobile networks, which will roll out commercially by 2030, yet build on 5G network developments in the interim.
Harnessing 5G and future generation applications requires access to an increasingly crowded radio spectrum. China has licensed more of its mid-band spectrum for general use. While the United States ramped up spectrum releases in recent years, auctions are currently frozen due to the lapse in authority.
One promising area where the United States has led both China and the world is its framework for “unlicensed,” shared, spectrum, of which it has released more than any other country. This allows relatively low-cost access to spectrum for innovators to manage localized, private 5G networks. The geographic and power limitations of unlicensed spectrum, however, mean that it can supplement but not replace licensed spectrum.
Satellite Technology: Satellites connect crucial network segments and are increasingly being integrated into ground-based cellular networks. The United States has long led in global space technology, and U.S. commercial satellite connectivity technology demonstrated clear national security value in Ukraine, where Starlink provides critical connectivity for military operations and civilian users. The U.S. government recognized the importance of this sector with the recent release of the National Low Earth Orbit Research and Development Strategy. Yet China is also seeking to contest this space, designating satellite internet as a new “national infrastructure,” with plans to launch nearly 13,000 low-earth orbit (LEO) satellites by 2035.
A National Action Plan for U.S. Advantage in Advanced Networks
SCSP has developed an Action Plan for U.S. Advantage in Advanced Networks that lays out a national, public-private roadmap to reassert U.S. leadership in advanced network technology. Key elements of the action plan are as follows:
Set moonshot network technology goals: U.S. leadership needs to set audacious goals to lead the world in development and deployment of advanced network technology.
Pervasive, interoperable connectivity: U.S. network infrastructure buildouts and connectivity policies should not only focus on broadband for households, but should provide pervasive, interoperable connectivity for economic and social benefit nationwide. This means building and planning networks for interoperable smart community and smart industry environments, integrating multiple network domains to drive autonomous vehicles, robotics, logistics, public safety, healthcare, and military applications.
Lead Free Space Optical Networks (FSONs): FSONs are laser-based means of communication that require neither fiber-optic network buildouts nor radio waves, and promise faster, more secure transmissions than radio transmissions. The United States can aim to adapt FSONs for wide-scale domestic connectivity as part of a broader technology mix towards pervasive connectivity.
Win the 6G Race with Open Architectures: Finally, transitioning U.S. mobile networks towards more open, interoperable, and customizable architecture, allowing new U.S. firms to enter the market and capitalize on U.S. leadership in software.
Build a stronger network supply chain: The United States cannot reach moonshot goals without ensuring that its building blocks – network supply chains – are solid. The U.S. government should offer significant financial incentives to develop and scale production of network components, and identify diverse, friend-shored sources for the rest. This includes supporting significant commercial scaling and piloting of Open RAN to help move open network architectures from the margins to the mainstream.
Unleash network applications: Advanced networks will likely yield their true value through the AI-driven, productivity-boosting applications they support. The United States should fund Warp Speed for Network Applications challenge grants demonstrating and scaling high-value use cases with significant commercialization potential. The United States must also immediately reauthorize spectrum auction authority, release more spectrum for private sector use, and prioritize research in spectrum sharing and efficiency using AI tools. In the 117th Congress, the bipartisan Spectrum Innovation Act passed the House of Representatives but stalled in the Senate. This bill would aid innovation by making available to the private sector mid-band spectrum ideal for 5G networks and applications, among its other needed provisions. As of this publication, the bill has not been reintroduced in the House of Representatives or the Senate during the 118th Congress.
Shape Networks Internationally:
The United States’s diplomatic focus on exporting alternatives to PRC 5G network hardware has, at times, overlooked exportable U.S. alternative connectivity technologies, such as satellite, fiber optics, and cloud technologies, which are increasingly merging with telecom. The United States has also been less effective than China at bundling multiple technologies together in digital infrastructure export and investment packages. The United States should create a Tech Export Accelerator as a one-stop shop to manage technology export opportunities, bundling network gear, tech services, and financing to compete with the PRC in third-world countries. The United States must also work closely with its partners to develop a common vision for technology standards – both through existing mechanisms like the Quad and U.S.-EU Trade and Technology Council, but also through a new Free 6G Group of likeminded governments.
Networks comprise a key technology battleground that the United States must lead. The U.S. public and private sectors, with allies and partners, must build and implement an advanced networks vision for long-term competitiveness, security, and prosperity.