Executive Summary

The modern telecommunications infrastructure—made possible by research performed over the last several decades—is an essential element of the U.S. economy and society. But the U.S. position as a leader in telecommunications technology is now at risk because of the recent decline in domestic support for long-term, fundamental telecommunications research. To help understand this challenge, the National Science Foundation (NSF) asked the National Research Council to assess the current state of telecommunications research in the United States. This report provides an examination of telecommunications research support, focus, and time horizon in industry and academia and discusses the implications for the health of the sector. Finally, it presents recommendations for enhancing U.S. telecommunications research efforts.

FINDINGS

Telecommunications has expanded greatly over the past few decades from primarily landline telephone service to the use of fiber optic, cable, and wireless connections offering a wide range of voice, image, video, and data services. Yet it is not a mature industry, and major innovation and change—driven by research—can be expected for many years to come.

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. Promis-



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Renewing U.S. Telecommunications Research Executive Summary The modern telecommunications infrastructure—made possible by research performed over the last several decades—is an essential element of the U.S. economy and society. But the U.S. position as a leader in telecommunications technology is now at risk because of the recent decline in domestic support for long-term, fundamental telecommunications research. To help understand this challenge, the National Science Foundation (NSF) asked the National Research Council to assess the current state of telecommunications research in the United States. This report provides an examination of telecommunications research support, focus, and time horizon in industry and academia and discusses the implications for the health of the sector. Finally, it presents recommendations for enhancing U.S. telecommunications research efforts. FINDINGS Telecommunications has expanded greatly over the past few decades from primarily landline telephone service to the use of fiber optic, cable, and wireless connections offering a wide range of voice, image, video, and data services. Yet it is not a mature industry, and major innovation and change—driven by research—can be expected for many years to come. 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. Promis-

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Renewing U.S. Telecommunications Research ing opportunities for future research include enhanced Internet architectures, more trustworthy networks, and adaptive and cognitive wireless networks. 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. The NSF and the Defense Advanced Research Projects Agency (DARPA) have been the two primary sources of federal telecommunications R&D support. NSF, long a supporter of telecommunications R&D spanning a range of topics, has recently been increasing its attention to telecommunications R&D, with an emerging emphasis on new approaches to networking. DARPA, which funded a number of important telecommunications advances in the past (including elements of the Internet itself), has been shifting its emphasis toward more immediate military needs and giving less attention to long-term telecommunications research. RECOMMENDATIONS A strong, effective telecommunications R&D program for the United States will require a greater role for government-sponsored and university research, and more funding of long-term research by industry. The committee recommends that the federal government establish a new research organization—the Advanced Telecommunications Research Activity (ATRA)— to stimulate and coordinate research across industry, academia, and government. ATRA would be a hybrid of activities of the sort historically associated with DARPA (which through the ARPANET program managed a research portfolio, developed a vision, and convened industry and academia to build what would become the Internet) and SEMATECH (which brought the semiconductor industry together, initially with some federal support to complement industry dollars, to fund joint research, development, and roadmapping activities). There are a number of options for where within the federal government such a program could fit, each with its own set of tradeoffs (see Chapter 4). For example, ATRA’s proposed mission would align with that of existing agencies within the Department of Commerce, and NSF has developed mechanisms for joint academic-industry engineering research, albeit more focused and on a smaller scale. The committee also recommends that all segments of the U.S. telecommunications industry increase their support for fundamental research, possibly taking advantage of the avenue provided by participation in joint, cooperative research activities organized by ATRA. Indeed, industry should provide a significant fraction of total R&D funding for ATRA, which would

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Renewing U.S. Telecommunications Research support researchers from academia and industry and provide industry with a way to pool funds, spread risk, and share beneficial results. ATRA’s mission would be to (1) identify, coordinate, and fund U.S. telecommunications R&D; (2) foster major architectural advances; and (3) strengthen the U.S. telecommunications research capability. Key suggested steps for implementing ATRA are (1) establishment of mechanisms for carrying out project-based research; (2) establishment of advisory committees with high-level industry participation; (3) exploration of the need for R&D centers; and (4) establishment of a forum for key parties to discuss critical technology development issues. Effective expansion of federal support of telecommunications research through ATRA will require participation from both service providers and equipment vendors to help identify the most critical research needs together with complementary industry investments in research. ATRA can play an important role in facilitating mechanisms to enable service providers to pool research support. 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.