The US May Have Already Lost the 5G Battle
5G is of course critical for the telecom, semiconductor, display, IOT and broadcasting markets as well as a host of services. However, one report indicates the US may have already lost the 5G battle. After reading their paper, it appears the US has been forced to choose the more expensive 5G standard (mmWave at 24-300GHz) with reduced coverage due to excessive government ownership of the sub-6 GHz spectrum. One study indicated it would cost telecom providers over $400B to adequately build out the mmWave infrastructure, so it will be limited to dense cities only. Thus, there is the possibility that in the US the only reason to buy a 5G phone would be if you live in one of those dense cities or you frequently travel overseas to a country where 5G has been more effectively deployed. The report was authored by the Defense Innovation Board (DIB) which is one of several independent federal advisory committees advising the Secretary of Defense. I will try and summarize the major points of their 33 -page white paper entitled The 5G Ecosystem: Risks and Opportunities for DoD in this article. Note, the paper was published in April 2019, but I suspect little has changed since then.
Why is 5G important? 5G is expected to produce a step-change improvement in data speed, volume and latency (delay in data transfer) over 4G which should enable a host of new technologies that could change the standard of public and private sector operations, from autonomous vehicles to smart cities, virtual reality and more. Historically, the first mover country stands to gain billions in revenue accompanied by substantial job creation and leadership in technology innovation. They also set the standards adopted by later entrants and gain the early lead in establishing services which will be adopted worldwide.
The authors point out that in the early 2010s, AT&T and Verizon rapidly deployed LTE across the US on the 700 MHz spectrum they won at auction in 2008. The US became the first country after Finland to see a comprehensive LTE network that delivered around 10X the consumer network performance of then existing 3G networks. They claim that this step-change in performance drove the adoption of new handsets with new semiconductors that not only could move much more data, but were also computationally faster. US companies like Apple, Google, Facebook, Amazon, Netflix and many others built new applications and services that took advantage of this bandwidth. As LTE was deployed abroad, those same handsets and applications spread across the world and helped the US establish global dominance and wireless services that the US has enjoyed for around 10 years.
Can the US repeat its 4G experience and leadership in 5G? Spectrum availability will play a critical role and the US is behind other countries. China has an impressive 5G program under way, Huawei and ZTE are major players in telecommunications equipment and Chinese handset players Huawei, Oppo, Vivo and Xiaomi are well positioned to take share in 5G.
In 4G, up to five 20 MHz channels can be bonded together. But in 5G, up to five 100 MHz channels can be bonded together, enabling speeds approximately 20x faster than 4G and 4G LTE. While some 5G technology will be deployed in the currently-used cellular spectrum and achieve modest gains in performance (LTE is already fairly well optimized), full 5G development will require significantly more spectrum to provide another step-change improvement in performance for consumers.
The 2 approaches countries are pursuing include the spectrum below 6 GHz known as sub-6 GHz and is in the 2-4GHz bands. It is also referred to as low to mid-band spectrum. The second approach focuses on the spectrum between 24 and 300GHz and is known as high band or mmWave.
A mmWave 5G network could have very fast speeds under specific conditions that did not limit propagation, but would struggle to maintain those speeds at the extended range or “cell edge”. A sub-6 network might have lower maximum speed than mmWave, but can cover a much broader area without risk of interruption from a range of environmental factors.
Advantages of mmWave include:
- The shorter wavelengths of mmWave create narrower beams, which in turn provide better resolution and security for the data transmission and can carry large amounts of data at increased speeds with minimal latency.
- There is more mmWave bandwidth available due to the amount of government ownership at sub-6 GHz, which improves data transfer speed and avoids the congestion that exists in lower spectrum bands.
- A 5G mmWave network could be 20X faster than a 4G LTE network.
- The short wavelengths and narrowness of the beam restrict the distance which mmWaves can propagate. This creates high infrastructure cost due to the number of base stations required which is further aggravated by the fact that mmWaves can be easily blocked by walls, foliage and the human body itself.
- Increased interruptions.
- Higher capex.
- mmWave smartphones require bulkier antennas and today require a separate modem. Since it is easy to block mmWave with just your hand, smartphone makers are having to put 3-4 mmWave antennas in different parts of the phone so that at least one antenna is not obstructed, and a signal can be received. Smartphones offering mmWave network connectivity are typically higher in price than those just offering sub-6 GHz. We have seen multiple mmWave offerings $100 higher than sub-6 GHz only versions.
How expensive will mmWave be top deploy? Verizon installed ~150 fixed wireless broadband stations in Sacramento and only could service ~6% of residences in the tested areas. Google determined that 72,735 cell towers and rooftops would have the following coverage in mmWave vs. sub-6 GHz:
- mmWave - 11.6% of the US population at cell edge speeds of 100 Mbps with just 3.9% coverage at 1 Gbps.
- Sub-6 GHz – 57.4% of the US population at cell edge speeds of 100 Mbps and 21.2% coverage at 1 Gbps.
Another example of the propagation benefits of sub 6-GHz vs. mmWave comes from a splat (propagation) map using the same utility pole height in a flat part of LA with blue representing 100 Mbps speeds and pink representing 1 Gbps speed. Clearly, sub 6 GHz is more effective.
mmWave vs. sub 6GHz Propagation in LA
Sub-6 GHz has the following benefits:
- Broader network coverage per cell tower;
- Less interruption due to its longer wavelength and greater capacity to penetrate obstacles.
- Lower capex;
- Can leverage existing 4G infrastructure;
- Faster time to rollout.
But in the US, the government owns large portions of the sub-6 spectrum and limits commercial access. Thus, there is a lack of spectrum to achieve the desired performance 5G customers are expecting with sub-6 GHz. It is possible to relocate Federal users or share this bandwidth, but this will take a significant amount of time. According to the DIB study, the average time it takes to clear spectrum and then release it commercially either through auction, direct assignment or other methods is typically around 10 years. Sharing spectrum has historically taken around 5 years and there are legitimate Department of Defense concerns around sharing spectrum. It would also increase congestion in the sub-6 spectrum, increasing interruptions.
mmWave propagation performance can be improved through massive multiple input, multiple output (MIMO) and beamforming. According to the DIB study, “Massive MIMO is an antenna array that will greatly expand the number of simultaneous connections and throughput, and will give base stations the ability to send and receive signals from many more users at once and increase the capacity of networks significantly, assuming multiple RF paths to users exist. Beamforming is a technique for identifying the most efficient data-delivery route to a particular user and reducing interference for nearby users in the process. These options can improve the propagation of mmWaves, but challenges remain with maintaining connectivity across a broader area using this part of the spectrum. Significant time and R&D will have to be devoted to solving the mmWave propagation problem before it can be deployed as a more universal wireless network solution.”
So, for now, the US is primarily focused on mmWave which is being pursued by AT&T and Verizon. Sprint was focused on the mid-band spectrum while T-Mobile is focused on mmWave and low-band spectrum.
- AT&T is already branding 4G technology as 5G Evolution and is not true 5G. It has upgraded its cell towers and added new small cells that use LTE Advanced with technologies such as 3-way carrier aggregation, 4x4 MIMO and 256-QAM modulation. These technologies have allowed for improved speeds with theoretical peaks of up to 400Mbps but are not true 5G. AT&T spent $983M to win 24GHz spectrum in May 2019 and will build out its mmWave 5G network. Today it has some mmWave coverage in 35 cities.
- Verizon is exclusively mmWave and it uses 28GHz and 39 GHz bands. It holds 76% of the 28GHz band and 46% of the 39GHz band. It also has some mmWave coverage in 35 cities with plans to get to 60 by the end of the year.
- T-Mobile is using 600MHz low band spectrum which was formerly used by channels 38 to 51 on UHF based TVs. These low frequency signals can travel far and wide, unlike mmWave. It is also planning to use 28 GHz and 39 GHz bands for mmWave transmissions.
- Sprint was only focused on the mid-band spectrum at 2.5 GHz which will likely be utilized by T-Mobile as well due to their merger.
The sub-6GHz currently dominates outside of the US due to improved range over mmWave, resulting in far fewer base stations needed to be deployed to deliver the same coverage and performance.
China is moving aggressively, building out its domestic sub-6 GHz networks. In addition to investing $180B for 5G deployment over five years, China assigned 200 MHz of mid-band spectrum to its three state providers and is considering reallocating 500 MHz of C-band spectrum as well. Domestically China’s 5G deployment is being implemented through China Mobile, China Unicom, and China Telecom. All three are primarily focused on developing a standalone 5G network in China. In 2019, China had ~350,000 5G-operable base stations deployed, which was nearly 10 times as many as the United States. Within China, they are laying down fiber and installing 5G towers as part of its massive Belt and Road infrastructure project which will also be extended to other countries in East Asia and Europe. This project is helping Chinese companies extend the sub-6 GHz spectrum and gain share in building out 5G networks. According to the DIB study:
“5G development is a crucial component of Xi Jinping’s “China Dream” vision and “Made in China 2025” roadmap. Social stability and economic growth are the CCP’s top priorities because failures in those two areas are seen as direct existential threats to the regime, and 5G has the potential to transition China from a capital- and labor-intensive manufacturing economy to an innovation-led, consumption-driven economy with reduced dependence on foreign investment. In light of China’s slowing growth and its ongoing trade war with the United States, the CCP likely feels pressured to pursue technological advancement initiatives like 5G more aggressively.”
In Europe, Huawei and ZTE are offering their services to build individual countries’ sub-6 GHz 5G networks, and have signed multiple 5G contracts despite pressure from U.S. officials demanding that allies block Chinese companies. Part of the reason for the US attempts to block Huawei and ZTE is likely that the US is so far behind in 5G rather than just concerns regarding potential product backdoors and vulnerabilities in the supply chain.
Thus, if sub-6 becomes the global standard, it could become a problem for US companies who build their 5G products and services around mmWave. Chinese companies look to have a large advantage due to the faster and larger roll out of sub-6 GHz domestically and abroad. To catch up and ensure national security, the DIB recommended that the US and DoD pursue the following recommendations. As indicated here, the US is taking a protectionist stance due to its lack of 5G competitiveness.
- DoD needs to make a plan for sharing sub-6 GHz spectrum to shape the future 5G ecosystem, including an assessment of how much and which bandwidths need to be shared, within what timeframe, and how that sharing will impact DoD systems.
- Focus on the bands of sub-6 GHz that are already being used by China: 3.2 – 3.6 GHz and 4.8 – 5.0 GHz. Semiconductors and handsets are already configured for that range. It takes ~ 2 years to add new frequency bands to complex multiband transceivers and the US could save 2 years by focusing on those bands.
- DoD should share the 500 MHz of space in the 4 GHz spectrum that it currently occupies.
- DoD should encourage other government agencies to incentivize industry to adopt a common 5G network for sub-6 deployment.
- The status quo of spectrum allocation is unsustainable. 5G capability requires larger bands of spectrum, and without that additional bandwidth, the United States will not gain true 5G capability beyond the limited range that mmWave can provide. In the next year, DoD is in the position to enable or inhibit 5G adoption in the United States based on its use of sub-6 GHz spectrum.
- DoD stands to significantly benefit if it shares some of its sub-6 GHz spectrum. As the commercial sector develops and deploys 5G technologies and networks, DoD will be able to leverage commercial innovations to build its own new and improved technologies and networks. At a strategic level, 5G can create a step-change in situational awareness and decision-making by integrating more systems into a network that shares more data faster and at lower latency.
- This effort will require close coordination with NTIA to clear and reassign spectrum. Timing is critical - it is not enough to simply share spectrum, it must be done quickly to keep the United States competitive with China, South Korea, and Japan.
- Without aggressive action as outlined in this report, we believe there is a high likelihood that the United States will be unable to convince the rest of the world to adopt mmWave technologies as the standard 5G pathway. This may bifurcate the global market and result in the majority of the world adopting 5G sub-6 technologies, which will be dominated by the Chinese equipment and handset manufacturers.
- DoD must prepare to operate in a “post-Western” wireless ecosystem. This plan should include R&D investments towards system security and resiliency on an engineering and strategic level.
- Sharing parts of the sub-6 spectrum will certainly help the U.S. 5G effort, but gaining a competitive edge over China would require action at a rate and magnitude previously unseen within DoD. For this reason, it is probable that most of the world outside of the United States will adopt a sub-6 5G solution, forcing DoD to operate on a “post-Western” wireless ecosystem. In this event, DoD should assume that all network infrastructure will ultimately become vulnerable to cyber-attack from both an encryption and resiliency standpoint.
- DoD must adopt a “zero-trust” network model. Perimeter defense models have been proven to be ineffective, and 5G will only exacerbate this problem as more systems are linked into a common network. Information access should no longer be granted simply through attachment to a specific network, and instead should be granted through various security checks within the network. DoD should also plan to move to quantum-resistant key exchange mechanisms to deal with the eventual fall of public key exchange algorithms, particularly given China’s investments in quantum computing.
- While “zero-trust” networks can protect context exchange through cryptography, these exchanges will still be subject to traffic analysis and detection of surges in network utilization. DoD should work to keep large amounts of data flowing on a constant basis so that increases in operational tempo will not be noticed.
- In addition to these security precautions, DoD must brace for cyber-attack and penetration by improving resiliency and building in layers of redundancy throughout its networks to ensure uninterrupted connectivity.
- DoD will need to consider options for defending against a compromised supply chain, where Chinese semiconductor components and chipsets are embedded across multiple systems. DoD should invest in R&D to study the impact of compartmentalizing systems to limit an attacker’s ability to move laterally into other systems. This will come with performance costs, and DoD must find the line where it can balance baseline capability with security.
- DoD should advocate for aggressive protection of U.S. technology intellectual property rights (IPR) in an effort to slow down China’s telecommunications ecosystem expansion. The United States should leverage export controls to slow the rate of market loss for Western vendors, even if it may increase the pace at which China becomes self-sufficient.
- DoD will increasingly be driven to operate on shared commercial networks without their own bespoke infrastructure (as in the case of nuclear C3). DoD must analyze the risks and benefits associated with that shift, and adjust its concept of operations to account for it.
- DoD needs to consider the broader implications of a compromised supply chain, such as risk to personal devices and information that can be derived from activity on those devices. If China is able to collect this data, DoD should consider discrete directives to defend against these vulnerabilities that fall outside the traditional DoD systems and platforms, such as training to limit inadvertent sharing of PII through personal device use.
- In addition to these efforts, DoD should initiate testing and experimentation on its bases for future generations of wireless technology beyond 5G. This testing and experimentation will occur over a longer timeframe to ensure that the United States is prepared to lead the next generational transition. These activities can include testing for sub-6 sharing, as well as future mmWave deployment and propagation improvement.
- DoD should advocate for adjusted trade policies to discourage vulnerabilities in its supply chain on the grounds that they put national security assets and missions at risk.
- The compromised supply chain issue poses a serious threat to national security by introducing vulnerabilities into networks and systems, which can be leveraged by a hostile actor to disrupt DoD operations. The spread of these vulnerabilities creates an increasingly unstable environment by lowering barriers to offensive action while weakening defensive positions.
- The proliferation of security vulnerabilities creates incentives for all nations to take offensive action in a conflict, as the barrier to offense decreases while the difficulty of defense increases. This reality is reflected in the new U.S. Cyber doctrine of “forward defense”.
- To counter this threat, DoD should advocate that trade policy reward good security/coding and penalize vulnerabilities through tariffs (“monetization” of good development practices). For example, the United States could automatically impose a heavy tariff (say, 75%) on any goods from any nation found to have backdoors or serious security vulnerabilities. This would impose a market cost for insecurity, and would also create incentives for domestic companies to fund security researchers to find vulnerabilities in competitors’ products, thereby triggering the tariff. This would improve the overall security of DoD ecosystems without having to disclose vulnerabilities found by Title 50 entities.
- The United States should encourage Five Eyes and NATO partners to adopt the same tariffs, regardless of product country of origin. The United States stands to benefit the most in a trade conflict over security of devices.
- DoD should also encourage CFIUS to block transactions of companies with a history of selling products with documented backdoors and security vulnerabilities.
- Additionally, the United States should continue to encourage partner nations to secure their own supply chains and deny access to Chinese state-owned enterprises selling 5G wares.