Dec 7, 2022 - Technology

U.S. to spend $1.5 billion to jumpstart alternatives to Huawei

Illustration of U.S. flag stripes turning into a wifi signal

Illustration: Annelise Capossela/Axios

The federal government plans to invest $1.5 billion to help spur a standards-based alternative for the gear at the heart of modern cellular networks.

Why it matters: Experts say — and the government agrees — that there are economic and national security risks in having such equipment made only by a handful of companies overseas, with the most affordable products coming from China's Huawei.

Details: The most likely effort to benefit from the new funding is known as ORAN (Open Radio Access Network), which uses standard computing gear to replace what has been proprietary hardware from companies like Nokia, Ericsson and Huawei.

  • The federal government is kicking off the program with a public comment period, which will run through Jan. 23.
  • Funding for the effort was provided by the Chips and Science Act.
  • The U.S. has largely banned use of Huawei's devices over security concerns amid deepening U.S.-China tensions.

Between the lines: Commercial adoption of ORAN is already under way, though mostly in either limited trials or for brand-new networks. Dish Network and Japan's Rakuten are both using it.

  • Facebook and others have been pushing the approach for years, initially mainly as an option for emerging markets.

Yes, but: It's harder for existing network operators to shift to such gear.

  • The grants could help address some of the challenges for existing carriers who might want to use ORAN as they modernize and upgrade their networks.

What they're saying: "The highly consolidated global market for wireless equipment creates serious risks for both consumers and U.S. companies,” Alan Davidson, Assistant Secretary of Commerce for communications and information and NTIA administrator, said in a statement.

The big picture: None of the major cellular gear makers is based in the U.S., with the market dominated at the high end by Ericsson, Nokia and Samsung, along with China's Huawei and ZTE at the low end. Efforts to create alternatives, including U.S.-based options, have been going on for some time.

  • The move to boost efforts like ORAN could bolster the U.S. government's push to convince other countries to stop using Chinese-made gear.
  • "ORAN has been the answer of U.S. policy makers," wireless consultant Chetan Sharma told Axios. "They are putting their money where their mouth is."

What's next: The agency plans to hold listening sessions in January and is required to start making the first grants by August.

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