US legislators pin 5G fightback hopes on the Open RAN

Targeting Huawei, US lawmakers propose over a billion dollars in grant funding for Open-RAN based R&D.

US lawmakers from both sides of the House have proposed a Bill that would make over a billion dollars of R&D grant funding available to wireless equipment providers developing open RAN 5G solutions. It proposes reserving proceeds from US spectrum auctions to finance the grant funds.

The US legislators proposing the “Utilizing Strategic Allied Telecommunications Act” feel that Huawei has received a huge amount of government subsidy over its lifetime – something Huawei absolutely refutes – giving it an unfair market advantage. So they have determined that the best way to combat that is to throw a billion dollars of US government money at non-Chinese vendors, including both US and international vendors.

There are two mechanisms. The first is an R&D grant fund dedicated for research in to 5G O-RAN solutions, up to a maximum of $750 million. Each fund applicant is limited to $20 million per award. The awards can be made for developing products that increase 5G competitiveness and accelerate Open RAN based development, including the management of multi-vendor network integration.

The second is a $500 million Multilateral Telecommunications Security Fund, available to the Secretary of State to make available to non-US companies, once the relevant foreign government has agreed to the terms of the grant process. This proposed fund is intended “to support the development and adoption of secure and trusted telecommunications technologies”.

The Bill also proposes funding to boost US presence in Standards Development Bodies, such as 3GPP and ITU-T.

The Bill’s stated aim is to boost development and deployment of 5G equipment based on open radio architectures, thereby providing a competitive counter-balance to Huawei’s perceived dominance in the market.

The move to support open RAN solutions is a recognition of the fact that US wireless companies do not yet compete at scale in the 5G RAN. Open RAN solutions might provide the best potential for new vendors to develop products and gain presence in MNO 5G networks. Recently, companies such as Mavenir and Altiostar have positioned themselves, or been positioned by others, as primarily US-based companies that can compete in this area. Parallel Wireless, although it has made less of its US base in its messaging, is another that could stake a claim.

Although the US Bill envisions boosting US vendors, a boost for Open RAN and technology developed to O-RAN Alliance specifications could also bring benefits to China’s 5G market itself. All three Chinese MNOs are members of the O-RAN alliance, and would likely be keen to avail themselves of any accelerated product development for their programmes in this area.

Although the Bill uses the term O-RAN, a term usually associated with the specifications developed by the O-RAN Alliance, it actually states that O-RAN refers to “any Open Radio Access Network approach to standardisation adopted by the O-RAN Alliance, Telecom Infra Project, or 3GPP, or any similar set of open standards for multi-vendor network equipment interoperability.”

Although it may look like 5G networks based on Open RAN technology are still a way off, there is definite intention within several major MNOs in to make greater strides in Open RAN as they get past the initial 5G deployment phase. Open RAN deployments migh be first introduced in specific greenfield environments such as large campus or in-building projects, before being deployed more widely within the macro network.

One operator, Rakuten in Japan, has built a macro multi-vendor version (although not based on any specifications from the likes of O-RAN or TIP) and has recently joined the O-RAN Alliance. It also owns a significant stake in Altiostar. Telefonica has also invested in Altiostar from a strategic point of view. Verizon has committed to an Open RAN vision, and AT&T has given very strong public backing to O-RAN and to disaggregating its RAN functions as software running on COTS hardware. Orange has also said that it would back O-RAN as a means of decreasing costs and increasing functional flexibility in the network.

The foreign-based fund appears to be aimed at boosting the efforts of Huawei’s rivals more directly and could, it seems, be available to players such as Samsung, Ericssson and Nokia.