August 17, 2006    Volume 13, No. 15

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National Academies: United States Loses Lead In Telecommunications -- Both Industry And Federal Government Step Away From Long-Term Investments In R&D


The United States must adopt a more aggressive strategy to fund research and development needed to foster its telecommunications industry, concludes a new study from the National Academies of Sciences. "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," says the first sentence of the study done at the request of the National Science Foundation. "Strong competition is emerging from Asian and European countries that are making substantial investments in telecommunications R&D."

The National Research Council's Committee on Telecommunications Research and Development recommends the federal government create a new research organization called the Advanced Telecommunications Research Activity (ATRA) "to stimulate and coordinate research across industry, academia and government," it says. ATRA would be structured on the success of the Defense Advanced Research Projects Agency and Sematech. Where ATRA would reside needs to be determined, but "its 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 small scale," notes the committee in its recommendations.

All segments of the U.S. telecommunications industry -- both equipment vendors and service providers -- should be encouraged to support the new research organization "possibly taking advantage of the avenue provided by participation in joint, cooperative research activities organized by ATRA," notes the committee. "Indeed, industry should provide a significant fraction of total R&D funding for ATRA."

The U.S. lead in telecommunications is at risk because the country has lost its ability to compete in commodity products, due to cost disadvantages. Therefore, it is imperative for the country to focus on high-value innovation that is made possible "only by a greater emphasis on research," says the National Research Council report. "Expansion of telecommunications research is also necessary to attract, train and retain research talent."

But research funding is in decline, with fewer equipment vendors forced to focus more on short-term product development. "Telecommunications research is increasingly being done at universities rather than industry and outside rather than inside the United States," says the committee. "In addition, the diversity of players in today's telecommunications industry makes it difficult to design and deploy major end-to-end innovations."

In the meantime, federal funding of research has not increased to cover declining industry investments, even though the sector still has not matured. "No systematic efforts, such as took place for the semiconductor industry with Sematech, have emerged," says the committee. "Because the benefits of much telecommunications research cannot be appropriated by individual firms, therefore, public funding of such research appears necessary."

The National Science Foundation has been increasing its investment in telecommunications R&D with an emerging emphasis on networking. But the Defense Advanced Research Projects Agency (DARPA), which has been credited with creating the Internet, "has been shifting its emphasis toward more immediate military needs and giving less attention to long-term telecommunications research," says the panel.

Both NSF and DARPA should assess their investments in basic telecommunications research "and consider increasing both their emphasis on and their level of investment in such research," notes the report. "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."

Members of the National Academy of Sciences Committee on Telecommunications Research and Development:

  • Robert Lucky, Telcordia Technologies (retired), Chair
  • James Adams, Rensselaer Polytechnic Institute
  • Frederick Chang, University of Texas, Austin
  • John Cioffi, Stanford University
  • Richard DeMillo, Georgia Institute of Technology
  • Reed Hundt, McKinsey and Company
  • Jeffrey Jaffe, Novell
  • Edward Kozel, Open Range Ventures
  • Rajiv Laroia, Flarion Technologies
  • David Messerschmitt, University of California, Berkeley
  • Eli Noam, Columbia University
  • Daniel Pike, GCI Cable and Entertainment
  • Lawrence Rabiner, Rutgers University
  • Theodore Rappaport, University of Texas, Austin
  • William Spencer, Sematech (Emeritus)
  • David Teece, University of California, Berkeley
  • Hemant Thapar, Link-A-Media Devices
  • Jack Wolf, University of California, San Diego

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