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Global 5G Competition Is Stiff: FCC Wireless Advisers

By J. Sharpe Smith, Senior Editor

Panelists Debate Whether US is Ahead or Behind

The regulatory panel, “Inside the FCC – Forging the Path for the Wireless Future,” conducted during the AGL DC Summit on Sept. 26, featured the wireless advisers of three commissioners and an unexpected debate about who is leading the race to establish leadership in 5G wireless communications.

The United States is not currently leading the race to 5G, according Umair Javed, wireless adviser to Commissioner Jessica Rosenworcel. For example, he noted that Switzerland has 200 5G deployments, compared with 30 in the United States.

Additionally, he noted that South Korea turned on its 5G network in April and by June it had 1.8 million users or 77 percent of global 5G users, according to the GSM Association, which represents the interests of mobile network operators worldwide.

[It was later reported by Telworld that China’s three major mobile operators have signed up 10 million users  since September for 5G networks that won’t be turned on until the end of this month.]

“If you look at the race in terms of metrics, you can learn something about technology leadership, and there is reason to be concerned,” Javed said.

Will Adams, wireless adviser to FCC Commissioner Brendan Carr, said he believed the United States is actually leading in absolute 5G systems but that any comparison between the United States and South Korea isn’t fair, because the smaller Asian country has coverage advantages in the density of its population and a government mandate for fiber to every premises.

“We have a big, wide-open country that is difficult to cover,” Adams said. “When you look at South Korea, the majority of citizens live in metro Seoul, 26 million out of 50 million.”

The United States will deploy 60,000 small cells in 2019, which Javed found encouraging. But he compared that number with 350,000 small cells deployed in China in 2015.

“When it comes to infrastructure, we have made incredible progress,” Javed said. “While progress is increasing, we are facing a $400 billion investment from our competitors.

The Need for Mid-band Spectrum to Compete

Spectrum is another area Javed asserted United States is not leading. He referenced a CTIA report a year ago that said the United States was not leading in 5G because of deficiencies in its mid-band spectrum position.

“A year later we are even further behind; 16 countries have auctioned off mid-band spectrum specifically for 5G. We have work to do to catch up,” Javed said. “It is important to have mid-band spectrum because that is how we get scale [in networks] and coverage.”

Javed noted the progress in the auction of Priority Access Licenses in the 3550-3650 MHz band, which is set to commence on June 25, 2020.

US Vs. China

But the threat to U.S. leadership from China has been missing from discussions of 5G, Javed said.

“For the first time, U.S. wireless leadership is facing a credible, well-resourced, state-directed threat, and it is coming from China,” Javed said. “And this effort is directed at 5G standards. The race to 5G, or the race to control 5G, began in June 2017, when China had some unexpected success in shaping the New Radio (NR) standard in 3GPP, the international standards development body. China is winning more standards-essential patents than they did with 4G, which is part of their Innovation Economy plan.

Almost 3,500 Chinese venture capital (VC) funds were launched in 2017, raising a combined $243 billion, according to an article in Forbes magazine last year, written by John Mauldin of Mauldin Economics. Of the $154 billion worth of global VC investments in 2017, 40 percent came from Asia (primarily Chinese), compared with at 44 percent in the United States.

“In a great push to scoop up intellectual property and drive growth in key tech sectors, China’s VC scene is booming,” Mauldin wrote. “As of 2016, China’s venture capital investment had roughly caught up to U.S. levels. Now, it is probably ahead.”

Taking the lead in the standards-setting process, according to Javed, allows China to pay less to foreign countries for intellectual property rights.

Bryan Tramont, managing partner at the law firm of Wilkinson Barker Knauer, who moderated the panel, agreed that the Chinese government has mobilized around the idea of being involved in the standards-setting process and he questioned Adams on how the United States can compete with a country that fights with a different set of weapons. Adams answered that the U.S. system will continue innovate in the area of 5G technology. He also noted that the “race” comparison between a free-market system and China’s communist regime is also inherently faulty.

“The advantages we have the United States, which include the rule of law, an ecosystem that develops intellectual properties and the best scientists, will give us plenty of say in the standards,” Adams said.

Huawei Equipment in U.S. Poses Security Concerns

Another way China is establishing its dominance worldwide is through the sale of inexpensive radio network equipment through Huawei and ZTE. William Davenport, wireless adviser to FCC Commissioner Geoffrey Starks, said it is difficult for the U.S. intelligence officials to dissuade other countries from buying the Chinese-made equipment, because they may not be able to afford radios made by Ericson, Nokia or Samsung. They have no option they can afford.

“Radio network manufacturing is an area where the United States is not a leader,” Davenport said. “How do we reestablish an American manufacturing base? How can you take our leadership in software and translate that into network equipment? The government needs to work with the private sector to encourage this development.”

Commissioner Starks has introduced a supply chain rulemaking, which funds new equipment and prohibits carriers from buying equipment from companies that are on a State Department watchlist.

“Carriers have already purchased Huawei equipment and deployed it, particularly in rural areas,” Davenport said. “We have a security problem that exists right now. Commissioner Starks has been very focus on finding the equipment, fixing the security problem and funding it.”