Howard Buskirk

The March expiration of the FCC’s spectrum auction authority threatens U.S. competitiveness with China, Clete Johnson, Center for Strategic and International Studies senior fellow-strategic technologies, warned during a Georgetown Center for Business and Public Policy webcast Wednesday. Johnson is the author of a new CSIS paper arguing for reallocating more federal airwaves for commercial use.

China is probably “at least” two or three years behind the U.S. in generative AI, said Samm Sacks, cyber policy fellow at New America and senior fellow at Yale Law School, during a Brookings webinar Wednesday. China appears to be relying on “iterations off of cutting edge research” published in other countries, she said. Chinese officials are struggling with how to balance information control with their desire to lead the world on AI, she said. “AI generates and disseminates information that’s of real concern to the Communist Party leadership,” she said. Cyberspace Administration of China (CCA) has “really been in the driver’s seat” on AI regulation, but the Ministry of Science and Technology is “likely going to have the pen for China’s AI law, which is in the works,” Sacks said. The CCA would likely take a more conservative stance on AI rules than the ministry, she said. Chinese censorship “has a limiting effect on the availability and quality of data,” she said. Another issue for China is U.S. restrictions on access to the most advanced semiconductors, and the Chinese semiconductor industry is “generally several generations behind,” she said. China has been relying on a loophole to use cloud service providers to “rent access” to advanced chips, she said: “We need to watch is this an area where the U.S. government is going to come in and try to close the loophole. How successful will China’s AI ambitions be given these constraints from the U.S.?” Marietje Schaake, Stanford University Cyber Policy Center international policy director, urged flexibility in EU regulations as negotiations continue between the European Council and the European Parliament. “We may not know what will come next, but we do know that something else will come next and generative AI is certainly not the last disruptive iteration” of AI, she said.

NTIA is fully engaged in the development of a national spectrum strategy (see 2301090035) and intends to release it this year, NTIA Administrator Alan Davidson told the Commerce Spectrum Management Advisory Committee Tuesday. “We’re deep into it,” he said, noting that NTIA is working closely with the White House and at the other federal agencies, including the FCC. “People are deeply engaged right now,” he said. The meeting was CSMAC's first to include an in-person option since the COVID-19 pandemic began in 2020.

Monday was the deadline for carriers to submit a request to the FCC under the Secure and Trusted Communications Networks Reimbursement Program to remove unsecure equipment from their networks. Congress has been examining the issue but so far failed to provide additional money to fund removal of unsecure gear (see 2307130069). The Competitive Carriers Association said the deadline speaks to looming problems for smaller carriers. “Because Congress has not yet fully funded the Program, carriers are forced to undertake the endeavor of removing untrusted equipment with 40% of otherwise approved cost estimates to completely remove, replace, and destroy this untrusted equipment,” CCA CEO Tim Donovan said. “Absent full funding, networks in many rural and sensitive parts of our country are at ever-increasing risk of breaking down and going dark,” Donovan said: “Because of the funding shortfall, impacted carriers must make decisions to ‘rip’ but not ‘replace,’ including in areas where no other carrier provides service. This dire situation ignores our country’s national security and the connectivity of millions of Americans.” Congress’ inaction “has created a scenario that not only risks connectivity across rural America but undermines the nation’s faith in the security of our … networks,” a Telecommunications Industry Association spokesperson emailed. The group called for action. “TIA appreciates Congress’ work on increasing U.S. competitiveness with China and examining the risks posed by Huawei and ZTE equipment, however every day there are U.S. networks operating that contain equipment Congress has determined unsafe, poses a risk to our national security,” the spokesperson said. “It is essential that Congress move swiftly to address the shortfall,” said Jill Canfield, NTCA general counsel. “It is a national priority to remove unsecure equipment from the networks, but without the funding to replace noncompliant equipment, consumers living and working in rural America are at risk of losing service,” Canfield said. “It’s a classical unfunded mandate,” said Recon Analytics’ Roger Entner, who warned some networks may “go dark.”

Industry officials say they’re hearing little about when the FCC will approve final rules for the 5.9 GHz band. FCC commissioners approved an order in November 2020 opening 45 MHz of the band for Wi-Fi, while allocating 30 MHz for cellular vehicle-to-everything technology. Follow-up work remains.

With earnings season getting underway and the major wireless carriers set to report results starting with Verizon July 25, AT&T was down 4.10% Friday to $14.50/share after J.P. Morgan analyst Philip Cusick downgraded the company. "Based on recent commentary from management lowering estimates for wireless (in May and again in June) and broadband (in June), we believe AT&T is facing marginally more pressure in Mobility (from Verizon, T-Mobile, and cable) and Consumer Wireline (from cable, [fixed wireless access]) as well as ongoing pressures in Business Wireline," Cusick told investors. He predicted AT&T will grow its postpaid subscriber base by 2.5% this year, compared with 4.7% in 2021 and 3.5% in 2022. Cusick lowered his rating on AT&T to neutral from overweight and cut his per-share price target to $17 from $22. AT&T Chief Financial Officer Pascal Desroches warned last month the carrier expects net postpaid phone adds in the 300,000 range this quarter, compared with 424,000 in Q1 (see 2306200026). Meanwhile, Finland's Nokia cut its annual outlook Friday, and Sweden’s Ericsson reported lower quarterly profits due to a slowdown in consumer spending. Nokia now projects $26 billion-$27.6 billion in sales this year, down from $27.6 billion-$29.4 billion. “The weaker demand outlook in the second half is due to both the macro-economic environment and customers’ inventory digestion,” Nokia said: “Customer spending plans are increasingly impacted by high inflation and rising interest rates along with some projects now slipping to 2024 -- notably in North America. There is also inventory normalization happening at customers after the supply chain challenges of the past two years.” Ericsson reported overall sales dropped 9% year-over-year as it lost $67.2 million, primarily due to restructuring charges. The company cited a “sharp decline in sales in North America … partly offset by strong sales" in India, which is now deploying 5G. “As we've said before, 2023 is a choppy year and Q2 developed much in line with our expectations and what we have said to the market,” CEO Borje Ekholm told analysts. India “continued its strong development and network rollout, and by delivering a record build-out, we now have the leading market share” there, he said: “As expected, we saw a softening in other markets, primarily front-running 5G markets and that includes, of course, North America.” Ekholm noted world data traffic continues to grow. “In addition, we see that 3/4ths of all base station sites outside of China are not yet updated with 5G mid-band, so this, in combination with the migration to 5G stand-alone, will basically continue to drive the need for investments in 5G networks,” he said. Ericsson expects a “gradual recovery” in late 2023, with improvements next year.

Martin Cooper, known as the inventor of the cellphone as a Motorola technologist, is a skeptic of wireless industry arguments about a pending spectrum crisis. The world “is just at the beginning of the cellular revolution,” he said on a Cooley webinar Thursday, interviewed by former FCC Commissioner Robert McDowell. The standard story is that spectrum “is like beachfront property -- when you use it all up, there isn’t anymore,” Cooper said. “How can that be true?” When Guglielmo Marconi demonstrated the first radio, he used all the available spectrum for most of the world, Cooper said. Fifty years later “we had a million times more capacity, and believe it or not, another 50 years” later “and we did another million times,” he said: “Somehow or other, technology has stayed ahead of the game forever, and we have never had a scarcity of spectrum.” The technology already exists to make much more efficient use of spectrum, he said. The challenge “is to change our perception of spectrum, to get people to understand that we’ve got to … share the spectrum,” he said. McDowell noted Cooper developed what some call “Cooper’s Law,” that spectral efficiency doubles every 30 months and becomes exponential over time. Cooper’s wife, Arlene Harris, who co-founded wireless technology company Dyna with him in 1986, said on the webinar the expiration of the FCC’s auction authority in March could be a good thing for the wireless industry. “Good for Congress -- let’s starve the carriers,” Harris said. The carriers will then have to put pressure on their suppliers to develop technological solutions to capacity issues, she said. The technology Cooper developed in the 1990s “would have improved [network] capacity a ton, and yet the commission goes off and sells more spectrum -- the carriers had no reason to implement that technology,” Harris said: “They were buying spectrum and parking it.” Cooper envisions a world without exclusive licenses for spectrum. Allocations would be done “on the fly,” he said. Someone who wants to make a call would ask for a channel “and that channel is created instantaneously over the optimum frequency, the optimum amount of power,” he said: “We reconfigure as things change. That is the way systems should work. We are a long way away from that today, but that is how we’re going to get another million times capacity in spectrum capacity, and it’s all doable” with the right processing, smart antennas and other technology. The government is going to have to convince carriers to share spectrum, which won’t be easy, he said. “Carriers today think they own the spectrum -- they don’t own the spectrum, they have a license to use it,” Cooper said.

The use of AI and other technologies in managing how spectrum is used tops the agenda for the FCC’s Aug. 3 meeting, Chairwoman Jessica Rosenworcel said Thursday (see 2307130025). The FCC also released the draft items. Commissioners will vote on proposals on power levels for digital FM radio. Also on the agenda, a draft order establishing an up to $75 monthly broadband subsidy for eligible households in high-cost areas through the affordable connectivity program.

FCC Chairwoman Jessica Rosenworcel opened a Thursday FCC workshop on AI saying she sees more reason to be hopeful about what the technology can do than pessimistic about potential threats. Commissioner Nathan Simington warned against reactive regulation of AI. The National Science Foundation co-sponsored the forum.

The House Communications Subcommittee unanimously approved the NTIA Reauthorization Act (HR-4510), the Spectrum Relocation Enhancement Act (HR-3430) and two other telecom bills in a show of bipartisan cooperation Wednesday, promoting the authority of the NTIA (see 2307110079).