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5G will act as a medium to drive integration of artificial intelligence (AI) and machine learning (ML) into the network edge. The next-generation wireless networks will leverage AI and ML to forecast end-user distribution, predict peak traffic, and enhance network capability. The ML algorithms will make it easier for telecom companies to implement network slicing and beamforming. AI and ML will create opportunities for telecom companies to boost network experience and curtail network cost through automation. AI-based communication will further lead to the development of smart cities by facilitating decision making based on real-time data.
Mobile Edge Computing
Many telecom companies have already launched projects to implement mobile edge computing to cater to the exponential growth of smartphones and IoT devices. Many tech analysts believe that mobile edge computing will transform the telecom industry in 2021 as a disruptive technology. The telecom companies will leverage edge computing to bring data storage and computing closer to the end-users’ devices. In addition to reducing latency, edge computing will speed up the processing of real-time data collected and transmitted through connected devices. Many telecom companies are expected to diverse resources to mobile edge computing from a public cloud to store data locally.
This is a time when, as the authorities deal with a lockdown, there needs to be an equal emphasis on providing for large numbers of people without the money for food and necessities, while the rest of us wait it out. Hard as it is, an MIT scholar writes that after the Spanish flu in 1918, cities that restricted public gatherings sooner and longer had fewer fatalities, and emerged with stronger economic growth.1 It is likely that costs and benefits vary with economic and social capacity, and we may have a harder time with it here. Going forward, government action to help provide relief, rehabilitate people and deal with loss needs to be well planned, including targeting aid to the urban and displaced poor.
As important now as to ensure the lockdown continues is to plan on how to revive productive activity and the economy, and restore public confidence. A systematic approach will likely yield better results.
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As a result of the structural changes in the telecommunications industry, the source of funds for investing in research has shifted from the demand side—telephone customers who paid for Bell System research via a tax on telephony usage—to the vendors of equipment, software, and chips, although the U.S. military (through DARPA, the Army, the Navy, and the Air Force) continues to be a major source of investment in telecommunications research. Currently, end-user organizations and commercial intermediaries are investing very little in research (an exception is AT&T, which has maintained a vestige of Bell Labs but has cut that back substantially, due to dramatic reductions in traditional telecommunications revenues over the past 3 years, from a support level of close to $140 million in 2001 to a support level of below $60 million in 2004).
Today, for commercial technologies, most of the investment is made by supply-side equipment vendors and semiconductor and software companies. Service providers and equipment vendors primarily support research leading to near-term incremental additions to their own products and services, and are likely to keep the results of their short-term research programs proprietary in the interest of gaining competitive advantage.
Although demand-side entities are generally more likely to direct their research investments toward more fundamental and long-time-horizon opportunities, a major economic impediment to doing so is so-called free-riding. Since the goal of a demand-side entity is typically not to gain proprietary advantage, but to make innovative solutions available through the totality of its suppliers, demand-side investments in research usually benefit everybody, that is, all suppliers and other demand-side entities. Thus, companies or entities failing to invest in research can still benefit from the investments of others, and there is a temptation to gain a free ride on those investments—and a disincentive to invest in results that become largely a public good.
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Without an expanded investment in research, however, the nation’s position as a leader is at risk. Strong competition is emerging from Asian and European countries that are making substantial investments in telecommunications R&D.For many telecommunications products and services that are now commodities, the United States is at a competitive disadvantage compared with countries where the cost of doing business is lower. Continued U.S. strength in telecommunications, therefore, will require a focus on high-value innovation that is made possible only by a greater emphasis on research. Expansion of telecommunications research is also necessary to attract, train, and retain research talent.
Telecommunications research has yielded major benefits such as the Internet, radio frequency wireless communications, optical networks, and voice over Internet Protocol Nevertheless, research support has fallen off in recent years. Prior to the restructuring of the telecommunications industry in 1984, the Bell System’s research labs played a dominant role in long-term, fundamental telecommunications research for the United States. Post-restructuring, industrial support for such research has declined, become more short-term in scope, and become less stable. A diverse array of competing telecommunications firms— telephone, cable, Internet, and wireless—emerged, leaving most research to equipment vendors, which increasingly focused on short-term goals. Telecommunications research is increasingly being done at universities rather than by industry, and outside rather than inside the United States. In addition, the diversity of players in today’s telecommunications industry makes it difficult to design and deploy major, end-to-end innovations.
Federal funding of long-term research has not increased to cover the decline in industry support. No systematic efforts, such as took place for the semiconductor industry with SEMATECH, have emerged. Because the benefits of much telecommunications research cannot be appropriated by individual firms, therefore, public funding of such research appears necessary.
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U.S. critical infrastructure, national defense, and homeland security, which depend on having uninterrupted access to leading-edge telecommunications technology, are potentially threatened by the loss of a domestic telecommunications industry.
Without a continuing focus on telecommunications R&D, the United States will increasingly be forced to purchase telecommunications technology and services from foreign sources. Risks include (1) U.S. dependence on foreign sources of technology to meet critical defense needs; (2) loss of exclusive or early access to state-of-the-art communications technology; (3) loss of know-how to employ state-of-the-art technology; (4) opportunities for other nations to introduce security holes into equipment and networks; and (5) loss of technical capability for cyberdefense in such areas as cybersecurity, network assurance, and cryptography. Investment in telecommunications research yields major direct and indirect benefits.
U.S. telecommunications research has yielded tremendous direct and indirect returns.Notable payoffs from U.S. investment in telecommunications research and related areas in recent decades include the following: The Internet, which realized a new communications paradigm, introduced a new, highly flexible network architecture and protocols, and ultimately enabled myriad new applications and services;Radio-frequency communications technologies for cellular systems and wireless local area networks, which have enabled modern mobile voice and data communications;
Optical networks, which have revolutionized communications by providing extraordinary communications bandwidths at very low unit cost; and Voice over IP (VoIP), which provides voice communications with enhanced flexibility and efficiency and has provided opportunities for innovation in applications beyond those provided by the public switched network.
There are many promising avenues for telecommunications research, and renewed U.S. investment would yield major dividends, as indicated by the following possible results:
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An implication of defining telecommunications broadly is that every layer involved in communication at a distance becomes, at least partially, part of the telecommunications industry. The broad range and large number of companies that contribute to the telecommunications industry are evident in the following list of examples: Networking service providers across the Internet and the PSTN, wireless carriers, and cable operators. Examples include AT&T, Comcast, Verizon, and DirecTV.
Communications equipment suppliers that are the primary suppliers to service providers. Examples include Cisco, Lucent, and Motorola.Networking equipment suppliers selling products to end-user organizations and individuals. Examples include Cisco’s Linksys division and Hewlett-Packard (local area networking products).Semiconductor manufacturers, especially those supplying system-on-a-chip solutions for the telecommunications industry. Examples include Texas Instruments, Qualcomm, Broadcom, and STMicroelectronics. Suppliers of operating systems that include a networking stack. Microsoft is an example.Software suppliers, especially those selling infrastructure and applications incorporating or based on real-time media. Examples include IBM, RealNetworks (streaming media), and BEA (application servers).
Utility or on-demand service providers selling real-time communications-oriented applications. Examples include AOL and Microsoft (instant messaging) and WebEx (online meetings).Consumer electronics suppliers with communications-oriented customer-premises equipment and handheld appliances. Examples include Motorola and Nokia (cell phones), Research in Motion (handheld e-mail appliances), Polycom (videoconferencing terminals), Microsoft and Sony (networked video games), and Panasonic (televisions).What is striking about this list is how broad and inclusive it is. Even though many of these firms do not specialize solely in telecommunications, it is now quite common for firms in the The societal importance of telecommunications is well accepted and broadly understood, reflected in its near-ubiquitous penetration and use. Noted below are some of the key areas of impact:
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In addition to emphasizing the impact of U.S. communications research on C4I (i.e., command, control, communications, computers, and intelligence2), it is also important to briefly note the relevance to C4I of the engineering disciplines. Much of the basic mathematics that underlies telecommunications engineering is also relevant to command and control systems. Almost any computing device depends heavily on communications technology, both internally to communicate between subelements of the computer and externally to communicate with other devices. And the field of intelligence is replete with examples of reliance on telecommunications. Hence, telecommunications research is significant for and integral to the capability and capacity of many aspects of the overall defense system.
A strong U.S. telecommunications research capability is also important for several indirect reasons related to defense and homeland security: Skill base of engineering talent: education and training. To solve the specialized communications issues in C4I requires that the United States have the best telecommunications engineers in the world, which in turn requires that a vibrant commercial industry be maintained. Otherwise, the best engineers will migrate to countries that have protected or low-cost businesses, and ultimately U.S. security will be put at risk.
Delivery capability of government suppliers. Because meeting military requirements depends on fundamental understanding of very-high-speed optical networks, satellite communications, and support of mobility in the battlefield, it is not sufficient to have a cadre of educated and trained individuals. Corporate environments must also be available in which such individuals are trained to work together in teams on system-level designs, and to take an interdisciplinary approach.
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Even with ATRA, NSF and DARPA will remain important contributors to U.S. telecommunications research efforts. The committee recommends that NSF and DARPA assess their investments in basic telecommunications research and consider increasing both their emphasis on and their level of investment in such research. Both should establish criteria for determining the appropriate level of telecommunications research funding. NSF should continue to strengthen its support for telecommunications research and should consider programs for attracting and developing young research talent. To stay at the forefront, DARPA should continue support of telecommunications research for military applications, even if there is the chance of commercial development of those technologies. In formulating its research programs, DARPA should also consider the telecommunications capabilities of potential adversaries and the risk of dependence on foreign suppliers for key technologies.
How important is telecommunications as an industry, and how important is telecommunications research to the overall health of that industry? Underlying these questions are several others. How important is telecommunications to the U.S. economy and society? To what extent are U.S. consumers likely to benefit directly from telecommunications research in terms of new products and services that enhance their lives or improve their effectiveness or productivity? How much scope for innovation is there left in telecommunications, or has telecommunications matured to the point that it is merely a commodity service or technology?
The core findings of this study—which are supported throughout this report—are that the telecommunications industry remains of crucial importance to the United States as a society, that a strong telecommunications research capability continues to be essential to the health and competitiveness of this U.S. industry internationally, and that the health of this industry strongly affects the U.S. economy in many ways.
Before the emergence of the Internet and other data networks, telecommunications had a clear meaning: the telephone (and earlier the telegraph) was an application of technology that allowed people to communicate at a distance by voice (and earlier by encoded electronic signals), and telephone service was provided by the public switched telephone network (PSTN). Much of the U.S. network was owned and operated by American Telephone & Telegraph (AT&T); the rest consisted of smaller independent companies, including some served by GTE.
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As a result of the structural changes in the telecommunications industry, the source of funds for investing in research has shifted from the demand side—telephone customers who paid for Bell System research via a tax on telephony usage—to the vendors of equipment, software, and chips, although the U.S. military (through DARPA, the Army, the Navy, and the Air Force) continues to be a major source of investment in telecommunications research. Currently, end-user organizations and commercial intermediaries are investing very little in research (an exception is AT&T, which has maintained a vestige of Bell Labs but has cut that back substantially, due to dramatic reductions in traditional telecommunications revenues over the past 3 years, from a support level of close to $140 million in 2001 to a support level of below $60 million in 2004).
Today, for commercial technologies, most of the investment is made by supply-side equipment vendors and semiconductor and software companies. Service providers and equipment vendors primarily support research leading to near-term incremental additions to their own products and services, and are likely to keep the results of their short-term research programs proprietary in the interest of gaining competitive advantage.
Although demand-side entities are generally more likely to direct their research investments toward more fundamental and long-time-horizon opportunities, a major economic impediment to doing so is so-called free-riding. Since the goal of a demand-side entity is typically not to gain proprietary advantage, but to make innovative solutions available through the totality of its suppliers, demand-side investments in research usually benefit everybody, that is, all suppliers and other demand-side entities. Thus, companies or entities failing to invest in research can still benefit from the investments of others, and there is a temptation to gain a free ride on those investments—and a disincentive to invest in results that become largely a public good.
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The telecommunications industry is a major direct contributor to U.S. economic activity. The U.S. Census Bureau estimates that just over 3 percent of the U.S. gross domestic income (GDI) in 2003 was from communications services (2.6 percent) and communications hardware (0.4 percent)—categories that are narrower than the broad definition of telecommunications offered above. At 3 percent, telecommunications thus represented more than a third of the total fraction of GDI spent on information technology (IT; 7.9 percent of GDI) in 2003. In fact, the fraction attributable to telecommunications is probably larger relative to that of IT than these figures suggest, given that much of the GDI from IT hardware (particularly semiconductors) could apply to any of several industries (computing, telecommunications, media, and electronics, for example). If one assumes IT to be the sum of computers (calculating), computers (wholesale), computers (retail), and software and services, the total GDI for IT is
$440 billion, compared to the total for telecommunications (communications hardware plus communications services) of $335 billion, making telecommunications’ contribution to GDI just under 80 percent of IT’s contribution to GDI.4
The telecommunications-related industries are also a major employer—communications services employed 1 million U.S. workers in 2002, representing 1.1 percent of the total private workforce, and communications equipment companies employed nearly 250,000 people.5 Moreover, telecommunications is a high-tech sector, with many highly skilled employees.
Telecommunications is a growth business. Although markedly reduced investment in some parts of the sector (following the bubble years of the late 1990s) may have given an impression of low growth in the long run, a longer-term view taking into account the need for humans and machines to communicate suggests that telecommunications will continue to grow apace, as evidenced by the ongoing expansion of wireless and broadband access services throughout the world.
Telecommunications is also a key enabler of productivity across the U.S. economy and society.6 Not only is telecommunications an industry in itself, but it also benefits nearly every other industry. In the 1990s the U.S. GDP grew rapidly, and the U.S. economy was among the strongest in the world. It is widely believed that the Internet economy played a significant role in this success.
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As supported by the horizontally homogeneous layered infrastructure, applications of various sorts increasingly incorporate telecommunications as only one capability among many. For example telephony, as it evolves into the Internet world, is beginning to offer a host of new data-based features and integrates other elements of collaboration (e.g., visual material or tools for collaborative authoring). Another important trend is machine-to-machine communication at a distance, and so it cannot be assumed that telecommunications applications exclusively involve people.
Like telecommunications itself, the telecommunications industry is broader than it was in the past. It encompasses multiple service providers, including telephone companies, cable system operators, Internet service providers, wireless carriers, and satellite operators. The industry today includes software-based applications with a communications emphasis and intermediate layers of software incorporated into end-to-end communication services. It also includes suppliers of telecommunications equipment and software products sold directly to consumers and also to service providers, as well as the telecommunications service providers
It includes companies selling components or intellectual property predominately of a communication flavor, including integrated circuit chip sets for cell phones and cable and digital subscriber line (DSL) modems.
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No longer a vertically integrated business, the telecommunications industry is enabled by a complex value chain that includes vendors, service providers, and users. The telecommunications value chain begins with building blocks such as semiconductor chips and software. These components are, in turn, incorporated into equipment and facilities that are purchased by service providers and users. The service providers then, in turn, build networks in order to sell telecommunications services to end users. The end users include individuals subscribing to services like telephony (landline and cellular) and broadband Internet access,