Telecom Officials Say More Government R&D Funds Would Solve U.S. Broadband Penetration Woes
The government must increase telecom research and development funding, industry officials said on an IEEE Globecom panel Wednesday. More spending would increase U.S. jobs and drive broadband deployment, they said. “The United States needs an innovation strategy that increases the incentive to develop new technologies for the broadband economy right here in this country,” said Grant Seiffert, Telecommunication Industry Association president.
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A dearth of government spending has forced the telecom industry to self-generate R&D funds, said Jake MacLeod, Bechtel Communications chief technology officer. Such spending is not popular with Wall Street, which focuses on quarter-by-quarter profit, he said. That near-term view is “very myopic” and “very disturbing for our country,” he said. Years ago, the industry got research money through Bell Labs, but that funding went away after divestiture, he said. Today, the U.S. government spends far less on telecom R&D funding than Europe, he added. The EU spends almost $13.5 billion a year; the U.S. spends between $250 and $350 million, he said.
The funding gap is “chasing research offshore” and killing jobs for Americans, MacLeod said. The government must “make policies that attract development” in the U.S., he said. Policymakers must keep R&D jobs in America, agreed Greg Farmer, Nortel vice president of Global Government Relations & International Trade. “We are by our inaction losing them at a rapid pace.”
The U.S. can’t spend more on telecom R&D, countered Timothy Regan, Corning vice president, global government affairs. The $9 trillion national debt means “there’s no money” to spend on telecom R&D, Regan said: “If we can find the dough, then moving toward funding more research” will make sense. Congress doesn’t need to allocate additional funds, but rather “reprioritize” existing money, MacLeod said. Policymakers should take away “useless” science projects and “allocate them toward something that is valuable to our industry.” Reallocating funds sounds good on paper, Regan said, but “it’s hard to take away someone else’s dough.”
A Democratic president in 2008 could create telecom jobs, Regan said. The government must take a “more aggressive, interventionist” approach to fix the U.S. problem that “we're in a society that frankly doesn’t make things anymore,” he said. Democratic Sens. Hillary Clinton, N.Y., and Barack Obama, Ill., are “hearing this message” and have “better plans” than the Republican candidates, Regan said: “And I'm a Republican.”
The government can drive U.S. broadband penetration by spending more money on education, Farmer said. Policy makers should encourage development of more science, engineering and technology classes so the telecom industry won’t need to look internationally to find qualified employees, he said. Also, promoting global spectrum harmonization would take away a “financial burden” for companies that limits their ability to roll out networks, he said.
Broadband policy makers must not forget computers have about 50 percent penetration in the U.S., Regan said, noting that broadband penetration can’t increase if people don’t have computer access. Also, broadband deployment is expensive, he said. The government could reduces operator costs with tax incentives, he said. Broadband mapping would also help, he said. States with broadband mapping programs have found success creating public-private partnerships to deploy broadband in low-penetration areas, he said.
More industry regulation will not patch the U.S. broadband hole, Farmer said. “Growth will stop.” Nortel and other telcos could lose customers if the U.S. regulates too much, he said, citing proposed net neutrality legislation. Last year, a CEO from a Nortel customer told Farmer: “If you all let net neutrality pass in the United States, future investment from our company in the next three years will be zero.”
The upcoming 700 MHz auction means “an extremely competitive but bright future” for telecom, Farmer said. The auction should create new broadband players that will increase industry competition, reducing prices and improving service, he said. Meanwhile, the auction will effect a “huge change in the architecture of communications networks” in the next five years, MacLeod said. “We're going from a hierarchical architecture to a completely flat” Internet Protocol-based system, he said. A more competitive market will force the industry to create “new, dynamic services” to make money, Regan said. Otherwise, companies could face an “airline situation” and get into a price war where no one makes a profit, he said.