Mechanisms and Best Practices for Renewing Telecommunications Research


Several factors are cited by former Bell Laboratories researchers as having contributed to that lab’s success with fundamental research. The context for telecommunications research has changed significantly since that time, but these fundamental lessons nonetheless have application today:

  • Stable research funding. The concept of no major growth in boom times and no major cutbacks in bad times for the industry translated to consistent support for fundamental research. The result was a stability of funding and of growth that allowed long-term goals to be pursued.

  • Research that was limited only by ideas, rather than by resources. This ideal was achieved by enabling highly talented individuals to pursue ideas until either success was achieved or it became obvious that the ideas would not work.

  • Research that was problem-driven. Research was managed in the Bell System in accord with a clear and consistent mission informed by constant exposure to real technology (and business) problems and close coupling to the Bell operating companies. People working in fundamental research were made aware of the most pressing technical problems requiring revolutionary solutions. Such close coupling between research and operations enabled the transfer of new technology to practice.

  • Support for interdisciplinary research. At Bell Laboratories, researchers spanned a broad range of disciplines from physics to economics and thus were able to tackle the cross-disciplinary problems that often arise in designing, deploying, and operating telecommunications systems.

It is, of course, extremely unlikely that this full set of conditions can be replicated in an industry research laboratory today. However, they can be seen as characteristics of the ideal

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Renewing U.S. Telecommunications Research 4 Mechanisms and Best Practices for Renewing Telecommunications Research BEST PRACTICES FOR LONG-TERM RESEARCH INVESTMENTS Several factors are cited by former Bell Laboratories researchers as having contributed to that lab’s success with fundamental research. The context for telecommunications research has changed significantly since that time, but these fundamental lessons nonetheless have application today: Stable research funding. The concept of no major growth in boom times and no major cutbacks in bad times for the industry translated to consistent support for fundamental research. The result was a stability of funding and of growth that allowed long-term goals to be pursued. Research that was limited only by ideas, rather than by resources. This ideal was achieved by enabling highly talented individuals to pursue ideas until either success was achieved or it became obvious that the ideas would not work. Research that was problem-driven. Research was managed in the Bell System in accord with a clear and consistent mission informed by constant exposure to real technology (and business) problems and close coupling to the Bell operating companies. People working in fundamental research were made aware of the most pressing technical problems requiring revolutionary solutions. Such close coupling between research and operations enabled the transfer of new technology to practice. Support for interdisciplinary research. At Bell Laboratories, researchers spanned a broad range of disciplines from physics to economics and thus were able to tackle the cross-disciplinary problems that often arise in designing, deploying, and operating telecommunications systems. It is, of course, extremely unlikely that this full set of conditions can be replicated in an industry research laboratory today. However, they can be seen as characteristics of the ideal

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Renewing U.S. Telecommunications Research academic environment for telecommunications research that can be factored into the design and management of both government- and industry-supported research programs. THE IMPORTANCE OF COLLABORATION ACROSS ACADEMIA AND INDUSTRY Researchers outside industry can be disadvantaged for some types of research by a lack of specifically necessary information or access to facilities that are crucial to a quality and relevant outcome. An example is a researcher leveraging network traffic statistics to define a superior protocol (what are realistic traffic models?), or a researcher defining superior mechanisms to manage network recovery from disaster (what are realistic assumptions about the scope of damage to the network?). In fact, as research becomes more immediately relevant it inevitably becomes more dependent on “inside” information and facilities. It is thus essential that industry seek to inform the research sponsors and performers as to their more critical long-term issues and opportunities that are amenable to research. Concerns about intellectual property in such collaboration can be addressed by having faculty researchers sign nondisclosure agreements that let them work with and understand the industrial context in depth but that also protect a company’s intellectual property unless permission is granted by the company.1 Researchers themselves are also motivated to make an impact, and in most cases welcome and appreciate visibility into what the ultimate customers of the research—both industry and end users—see as their greatest need. Armed with that understanding, they can pursue their own ideas, some with more near-term and direct application and others more radical and speculative. This is not to imply that industry should define and direct both the research projects and the approaches that are pursued. Nor does it imply that all telecommunications-related research should tackle issues defined by industry. Researchers are more enthusiastic and ultimately more effective if they pursue their own ideas, and industry itself often fails to encourage or even recognize radical new innovations. THE IMPORTANCE OF VISION Past U.S. leadership in telecommunications has benefited from the creation and pursuit of a well-defined vision for managing investments. However, in today’s telecommunications environment, which includes a broad array of service providers and equipment vendors, such a clearly defined and broad vision is much more difficult to achieve. In the predivestiture Bell System, the development of a vision and associated roadmapping activities for the telephone system were carried out largely by AT&T (together with a small number of overseas telephone companies that were also vertically integrated monopoly providers). AT&T and its peers were successful in developing and realizing a series of major new visions—such as direct long-distance dialing, electronic switching, digital transmission and switching, and out-of-band signaling and intelligent network services (which separated service logic from switching equipment). 1 There are also other ideas emerging regarding new means for collaboration; see, for example, Raymond E. Miles, Grant Miles, and Charles C. Snow, Collaborative Entrepreneurship: How Communities of Networked Firms Use Continuous Innovation to Create Economic Wealth, Stanford University Press, Stanford, Calif., 2005.

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Renewing U.S. Telecommunications Research Significant vision-setting and associated design work have also been carried out in particular sectors of the telecommunications industry. The cable industry developed a new architecture—hybrid fiber coaxial cable—that allowed delivery of digital, two-way services over its networks. The wireless industry is now well into the deployment of a third generation of cellular services (which exist in several different flavors), each of which has supported greater capacity in terms of users and bandwidth per user, and has involved broad thinking about desired capabilities and the technological advances required to achieve them. Such efforts are generally considered to have been successful within the confines of individual industry sectors, but they have not addressed major architectural issues across these sectors. Although individual segments of the industry have successfully pursued the rollout of new services, such as second-generation cellular or hybrid fiber coaxial cable television, the United States today does not have processes or forums for defining or implementing broader (cross-sector) visions or for establishing how much and what types of research are needed. The situation stands in contrast to that in some other regions of the world where institutions and processes are in place to define and implement telecommunications visions (see the section “International Support for Telecommunications Research and Development” in Chapter 2). There are, to be sure, strong arguments on both sides of the debate over the benefits of planned and structured technological programs versus unstructured ones in which many individual firms can attempt to develop their ideas. Nonetheless, it is worth exploring further the role that vision-setting activities could play in fostering future telecommunications advances. VISION FOR THE 21st CENTURY A major shift occurred in telecommunications toward the end of the 20th century. A growing realization emerged that the PSTN was not an efficient and cost-effective way of moving large amounts of data over a network. The basic insight was that packet-based networks could statistically multiplex data (including real-time voice and video) over a best-effort data network and still achieve high performance, universal connectivity, and reliable data transport. The Internet, which is really just an interconnection of hundreds of thousands of such packet networks, has proved this idea on a wide scale and has become the model for telecommunications in the 21st century. This breakthrough arose in an environment in which DARPA leadership, vision setting, and funding allowed research, development, and early deployment and operation to be performed by a diverse yet small and tightly knit community in an environment relatively free of commercial concerns. The promise of the Internet is the ability to bring unlimited bandwidth and computational power to every home, office, and even to individuals who are highly mobile, thereby enabling people to remain in constant contact with other people and with information of virtually any form. Hence one formulation of a big-vision problem for the 21st century would be something like “Universal Broadband Connectivity—Anywhere, Anytime.” But who will espouse this (or an appropriate alternative) vision, who will champion it through the regulatory and standardization bodies, who will invest in the necessary array of technologies, and who will work through the details associated with designing, implementing, and deploying products and services? In contrast to some other regions of the world (most notably Korea and Japan in Asia and various European nations), neither U.S. industry nor the U.S. government has a clearly defined, forward-looking vision for telecommunications, and more importantly, no process in

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Renewing U.S. Telecommunications Research place to define and implement such a vision. The consequence of this lack of vision is that the necessary complementary investments that should be made by the semiconductor houses, the equipment vendors, and the service providers—all in support of a vision held in common— may not be made because of the risk of investing in areas that are not supported across the telecommunications industry. The most successful visions will originate not only from new technological capabilities, but also from commercial and societal need. Execution of a vision requires not only the design and implementation of technology but also coordinated activities by regulators and government and industries such as those that finance the ventures. Thus it is important that not only industry, but also the brightest minds in academia and government and regulatory agencies be active participants. Also, although a U.S. vision would focus on the future of U.S. telecommunications applications and supporting infrastructure and services, the global range of both networks and technology supply chains means that coordination with global vision-setting efforts is essential. Without a clear vision in place, the risk is that the U.S. telecommunications industry will take a “wait and see” approach and make as few risky investments as possible until a de facto vision is defined externally, either in the global telecommunications community by the few countries that take leadership roles, or by the international standards bodies (which in the absence of other leadership provide the de facto roadmaps for the introduction of new technology). Either path could have negative long-term effects on the U.S. economy if leadership in telecommunications moves to Asia and Europe and the United States has to play the role of a fast follower—a role to which we are generally unaccustomed. ROADMAPS The path through which new technologies are introduced varies considerably across different industries. Sometimes, an innovation can be made based on a small, local, granular investment. But more often, an advance requires complementary work to be done in a variety of areas by a variety of actors. In the semiconductor industry, for example, the effort to bring ever-faster processors to market requires an entire industry to move together. Fabricators must make enormous investments in new manufacturing facilities, tooling companies must move to a next generation of fabrication processes, and microprocessor manufacturers must be convinced that a more powerful system will sufficiently expand the market to justify the investment. Roadmapping is a process to address these complementarities. The semiconductor industry, for example, is guided by two fundamental elements. First, there is the semiconductor industry’s International Technology Roadmap for Semiconductors (ITRS),2 a mechanism that allows all players to move to the next generation of technologies and practices smoothly and simultaneously.3 The ITRS identifies the short- and long-term technological challenges and needs facing the semiconductor industry. It is sponsored by the U.S.-based Semiconductor 2 See <http://public.itrs.net/>. 3 For another overview of the semiconductor roadmap, see Bill Spencer, Linda Wilson, and Robert Doering, “The Semiconductor Technology Roadmap,” Future Fab Intl., 18, January 2005, available online at <http://www.future-fab.com/documents.asp?d_ID=3004>.

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Renewing U.S. Telecommunications Research Industry Association (SIA), the European Semiconductor Industry Association, the Japan Electronics and Information Technology Industries Association, the Korean Semiconductor Industry Association, and the Taiwan Semiconductor Industry Association. In addition, SEMATECH (described in more detail below) acts as the global communication center for the ITRS, and the ITRS team at SEMATECH coordinates events in the U.S. region. Second, the industry benefits from the insight provided by more than 20 years’ experience with the successful introduction of new technologies and products—insight that assures manufacturers that each expansion in capability will result in an expansion of market. An industry roadmap is, in essence, a strategic plan for an entire industry, undertaken as a precompetitive industry collaborative activity, that informs the need for specific research directions, identifies necessary complementary investments across the horizontal industry that spans semiconductors to applications and content, and identifies related policy issues. It recognizes that the industry is characterized not only by competition of like companies (like service providers in the same geographical region), but also by non-competitive complements (like semiconductor manufacturing equipment and fabrication facilities, or telecommunications transmission facilities and the applications making use of them) where some level of precompetitive coordination can greatly reduce investment risks for all participants without interfering with competition or negating its benefits. A good roadmap is not overly prescriptive, however, and only does what is necessary to ensure success of the industry as a whole and no more, and leaving as much as possible to market choice. Roadmaps are already used in segments of the telecommunications industry. For example, the Optoelectronics Industry Development Association produces a roadmap covering optical components and, to some extent, optical communication systems. Also, various segments of the industry and individual firms have carried out efforts to define and develop new architectures, including the cable industry (which has deployed hybrid fiber coaxial cable and which is pursuing voice over IP) and both the cable and telephone companies (which are pursuing a variety of strategies for deploying fiber to the home and the “triple play” of video, Internet, and phone services). Broader roadmapping activities for telecommunications would be somewhat different from those for the semiconductor industry—the issues are more complex and involve more interdependencies. There are a large number of potential actors. Delivering a new set of services on a new telecommunications infrastructure may require the cooperation of many component providers, system vendors, application developers, and service providers. The service providers themselves—including incumbent local exchange carriers, competitive local exchange carriers, cable multiple system operators, cellular carriers, and wireless service providers—cover a wide range of interests, regulatory status, and geographical coverage. Moreover, with telecommunications spanning all layers from physical infrastructure to applications and content, investment decisions may involve content providers in addition to service providers. However, the basic idea is still relevant that processes and forums get people thinking about the longer term, and in a more coordinated way. Roadmapping should not be mistaken for a definitive path that a technology or industry must follow. A roadmap certainly does identify certain technologies and applications that are important or even necessary for growth of an industry as a whole, and it identifies the complementary investments (and staging of those investments) necessary for industry progress. However, a roadmap often incorporates alternative scenarios that might ultimately be successful, and does not try to pick which might finally be accepted. Roadmaps often explicitly attempt to

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Renewing U.S. Telecommunications Research leave as much freedom as possible for individual companies to differentiate themselves at the competitive stage—only doing what is necessary to ensure success of the industry as a whole and no more, and leaving as much as possible to the discretion of market choices. Roadmapping requires broad participation and sustained, significant investment. Undertaking an industry-wide roadmap is likely to be a costly and time-consuming task if it is done well and has broad support and participation. Roadmaps are also living documents that must be updated as circumstances change. The environment for telecommunications investment is also shaped by legislative and regulatory decisions. The overall framework for the telecommunications industry as a partly regulated industry has long been the subject of specific legislation. Implementation of this legislation is carried out through ongoing regulatory proceedings. Both factors contribute to the uncertainty surrounding new, long-term infrastructure investments. Another piece of the roadmapping puzzle is the set of standards organizations. Equipment vendors move directly from the standards organization to implement the ideas into products, often even concurrently with the standards negotiations. Here U.S. companies have been leaders recently in setting the standards in some organizations such as the Internet Engineering Task Force. Standards are also developed through organizations such as the Institute of Electrical and Electronics Engineers and the International Telecommunication Union. Today there are new standards organizations (e.g., Chinese efforts to establish unique versions of CDMA; 4G standards coming out of Japan) in which the United States has not been playing as strong a role. A more vertical structure to the telecommunications industry, greater government involvement, or a history of collaboration have made roadmapping a more central part of telecommunications programs outside the United States, accompanying the broader involvement of governments in directing technical developments and infrastructure deployment. Policies in Korea have long emphasized the deployment of broadband infrastructure. In the European Union, collaboration that begins at the research level through the framework programs establishes an early set of partnerships among countries, service providers, manufacturers, and other participants in the value chain. In Europe, these efforts have extended much further—to later standardization of the actual new architectures, as was the case with the GSM wireless system. In contrast, the United States tends to rely heavily on market forces and has a philosophy that lack of central control spurs innovation—and these arguments certainly carry considerable weight. Yet, it may well be possible to make use of roadmapping without unduly inhibiting innovation, nor does roadmapping necessarily imply the heavy hand of government. Certainly the semiconductor industry is widely viewed as having benefited from following that path. Roadmapping and Research There are several ways in which roadmaps can help focus and enhance the impacts of research. First, roadmaps can add predictability to infrastructure deployments. An invention in one part of a value chain has impact only if an industry consensus across many different types of companies motivates each to do its share. The absence of any roadmap makes this consequence doubtful. The result: no motivation to invest in research.

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Renewing U.S. Telecommunications Research Second, roadmaps can enhance the impact of short- to medium-term research. A component maker might create a much better device, but unless the vendor incorporates the new device in its products, the service provider uses it to improve service, and the customer likes the feature, there is no guarantee that it will be used. Third, roadmaps can help enable disruptive system-level research. Disruptive change in technology often requires upsetting the role that each company plays in a value chain. To successfully develop such architectures requires an interdisciplinary approach, namely diverse participants that bring different perspectives to the table. To get system-level insights frequently requires cross-company cooperation, which is difficult. An interesting example is the DARPA-funded MONET program of the mid-1990s. In this cross-company and university consortium, the teams used the opportunity to invent much of the advanced optical technology that had an impact on the industry in the late 1990s. Here the U.S. government played an important convening role, aside from providing the funding. Although opinions vary as to the ultimate effectiveness of the program, the European Union Sixth Framework Programme for telecommunications research provides an example of how research and roadmapping interrelate. The structure of the research projects anticipates the ultimate creation of an infrastructure. Each program involves a variety of players, including component manufacturers, system vendors, software firms, universities, and service providers. As a result, companies can better evaluate the impact of their technology, and several players in the industry can plan new beneficial roadmaps together. Advantages and Disadvantages of Telecommunications Roadmapping To summarize, roadmapping processes could help the telecommunications industry address several critical issues: Ensuring complementary progress in the underlying core technologies. Such a roadmap, which would address physical-layer communications, computing, and storage technologies, has striking similarities to the semiconductor industry’s roadmap. Enhancing intermodal and end-to-end interoperability. Issues include architecture and functional interoperability across vendors, equipment types, and geographic regions. Identifying and exploring complementary elements required for realizing a vision. For example, interactive broadband multimedia applications depend on complementary investments by distinct industry segments including applications (software industry), compelling content (the video game, music, and movie industries), the network and access to broadband connectivity (the telecommunications service provider industry), and customer premises equipment (computer and consumer electronics industry). Identifying knowledge gaps. Obvious gaps include technology or manufacturing processes. Other knowledge gaps include economic viability (e.g., building ubiquitous broadband access facilities) and the viability of the market opportunity (e.g., how much customers would be willing to pay). Identifying complementary policy, legal, and regulatory considerations. Roadmapping can also be used to identify needed changes in the legal or policy framework (e.g., telecommunications policy or intellectual property rights) and needed regulatory initiatives and their viability (e.g., policies relating to spectrum use or broadband deployment).

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Renewing U.S. Telecommunications Research On the other hand, roadmapping is not a panacea and brings with it a number of tradeoffs and possible limitations. For example, the roadmapping process could hinder the adoption of new, disruptive technologies (e.g., incumbents may be unwilling to try radical innovations). It also should be recognized that there is quite a leap from agreement on an element of a roadmap to a commitment to purchase a product. MECHANISMS FOR INDUSTRY, GOVERNMENT, AND UNIVERSITY COLLABORATION ON R&D FUNDING A variety of interesting models for mobilizing research and development support have developed to answer particular R&D needs. CableLabs, described in Chapter 2, provides an example of a telecommunications sector organizing itself to address the focused needs of a particular set of stakeholders. Experiences from the electric power and semiconductor industries provide additional examples of how industry or industry in combination with the federal government can come together to address critical research needs: Electric Power Research Institute. In 1971, U.S. public and private utilities created an organization to conduct electricity-related R&D. Under pressure from Congress (which had signaled in hearings that it might call on a federal agency to play this role), the Electric Power Research Institute (EPRI) began work in 1973 as a private, nonprofit organization to provide clear, credible scientific and technical research. Today, EPRI’s members represent over 90 percent of the U.S. electricity research community, and the organization maintains a member-driven annual budget of around $272 million. The majority of EPRI’s members are investor owned, but the organization’s membership also includes international organizations, and it classifies roughly 7 percent of its members as “federal/state” (e.g., the Tennessee Valley Authority, California Energy Commission, and so on). Semiconductor Research Corporation. The Semiconductor Research Corporation (SRC) was created in 1981 with the help of the Semiconductor Industry Association (SIA) to stimulate cooperative research into semiconductor technology by industry and U.S. universities. SRC was funded by member companies through fees based on their semiconductor sales and other factors. Early 1982 saw the newly incorporated SRC lining up a number of industry and university partners, and by 1983 SRC could count as members nearly 30 universities and such industry heavyweights as, among others, AMD, DEC, Honeywell, Intel, IBM, Motorola, GE, Harris Corp., and HP. SRC’s 1983 budget was approximately $11 million—primarily industry funding—and since it was established SRC has funded more than $500 million in long-term semiconductor research. SRC has also established partner relationships with other institutions such as NSF and SEMATECH. SEMATECH. In 1987, 14 U.S. semiconductor companies joined forces to create a nonprofit research and development organization called SEMATECH to improve domestic semiconductor manufacturing. A year later, Congress—worried about the increasing U.S. dependence on foreign suppliers for semiconductor technology—appropriated $100 million per year for 5 years to match SEMATECH’s industrial funding. The federal funding for SEMATECH was channeled through DARPA because semiconductor manufacturing was seen as vital to the nation’s defense technology base. DARPA continued its investment in SEMATECH beyond the original deadline, but in 1995 SEMATECH announced that it would wean itself from

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Renewing U.S. Telecommunications Research public assistance and seek an end to matching federal funding after 1996 as a result of the renewed health of the U.S. industry. A critical element of SEMATECH’s program over the years has been the development and refinement of a technology roadmap for the semiconductor industry. Reflecting the value of its work, SEMATECH has since grown and expanded to include significant international participation.4 The National Science Foundation has also established programs for collaborative engineering research among academia and industry. Chief among these is the Engineering Research Centers program5 that was established in 1985 to support cross-disciplinary, systems-oriented research between academia and industry, education and outreach, and technology transfer. The engineering research centers (ERCs) have supported research on a range of subjects from bioengineering to earthquake engineering to microelectronic systems and information technology. Fiscal year 2004 total annual funding from all sources provided directly to each ERC ranged from $3.1 million to $11.3 million, with NSF’s contribution ranging from $2.5 million to $4.0 million per year.6 NSF also administers the Industry University Cooperative Research Centers program,7 which aims to use limited NSF investments to stimulate industry-academic research partnerships with the bulk of the support coming from industry center members. Focus areas for centers in this program include advanced electronics, advanced manufacturing, civil infrastructure systems, information and communications, and system design and simulation, among others. In the past, some work coming out of this program has been very telecommunications specific. For example, in 1997 a professor at a communications-related center founded a company to design a new switch capable of applying his algorithms for maximizing quality of service. After 3 years of work, this company was acquired for nearly half a billion dollars.8 ESTABLISHING AN ADVANCED TELECOMMUNICATIONS RESEARCH ACTIVITY The committee believes that a hybrid approach is best suited to the challenges facing the telecommunications industry. Such a hybrid, dubbed the Advanced Telecommunications Research Activity (ATRA) in this report, would (1) draw in part on the strengths of the DARPA model in enabling creative, often risk-taking research under the direction of a lean, agile, and independent cadre of program managers that would include researchers from both industry and academia; (2) draw on the strengths of the industry-driven models represented by SEMATECH, SRC, and EPRI to ensure significant industry participation and buy-in; and (3) reflect the collaborative, multidisciplinary research model in the NSF Engineering Research Centers program. Most research would be performed externally at universities and other research institutions; in-house research might be appropriate in specific areas. 4 A more detailed history of SEMATECH is available in Computer Science and Telecommunications Board, National Research Council, Funding a Revolution: Government Support for Computing Research, National Academy Press, Washington, D.C., 1999, available online at <http://newton.nap.edu/html/far/>, p. 129. 5 See <http://www.erc-assoc.org/> for complete information. 6 As reported at <http://www.erc-assoc.org/factsheets/overview.html>. 7 See <http://www.nsf.gov/eng/iucrc/>. 8 As reported at <http://www.nsf.gov/eng/iucrc/directory/overview.jsp>.

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Renewing U.S. Telecommunications Research Industry funding would represent a significant fraction of total funding, and industry researchers would be deeply involved in research activities. Further, to ensure that ATRA is responsive to industry needs, one or more advisory committees would be established with representatives from equipment suppliers and service providers. Additional advisory committees might be established to address individual major technology areas (e.g., optical and wireless communications or network security) or the interplay between technology and regulatory developments. The new research organization’s multifaceted mission would include the following: Identifying, coordinating, and funding telecommunications research for the nation. The focus would be critical telecommunications research in which the nation is currently underinvesting, including (1) long-time-horizon speculative research that seeks to explore transformative new ideas; (2) precompetitive research that seeks to turn both incremental and transformative ideas into practice, suitable for others to exploit commercially; (3) long-term and precompetitive research on network trustworthiness, when commercial incentives are insufficient to motivate research to make the nation’s critical infrastructure more robust; and (4) interdisciplinary research at the intersection of technology, economics, and policy, including work that studies the technical, economic, and sociological issues underlying regulatory decisions. Fostering the conception, development, and implementation of major architectural advances. Major advances in telecommunications capability—such as direct long-distance dialing, hybrid fiber coaxial cable systems, or the Internet—have all required the conception, development, and deployment of novel network architectures. Similar advances in the future depend on carrying out sustained research and development activities. Strengthening the nation’s telecommunications research capacity by building up research groups, centers, and other institutions with sufficient scale and breadth of expertise to tackle real-world problems and by strengthening connections between the industrial and academic communities and among the telecommunications, semiconductor, and computer segments of the IT industry. To provide major experimental facilities useful to but beyond the capabilities of individual university research groups or firms, an infrastructure for fabrication, prototyping, and testing would be supported as needed. To facilitate research and development on largescale problems, such as end-to-end interoperability testing or network security and reliability, major facilities for experimentation would be supported as needed. Options for Locating the New Telecommunications Research Activity in the Federal Government ATRA could be established simply by supplementing the mission of NSF or DARPA, but it might be preferable to create it as a standalone activity. NSF is largely focused on enabling fundamental breakthroughs and stimulating a wide diversity of activities rather than addressing problems with an explicitly industry focus, although its Engineering Research Centers program is a possible model. DARPA today focuses more on military applications and appears unlikely to sponsor a major activity aimed at challenges and opportunities of a predominantly commercial nature. Another possible home for such an activity is the Department of Commerce, which already conducts research and standards activities through the National Institute of Standards and Technology (NIST) and which supports some telecommunications research through the Na-

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Renewing U.S. Telecommunications Research tional Telecommunications and Information Administration’s (NTIA’s) research and engineering branch, the Institute for Telecommunications Sciences, which is noted, for example, for its work on radio propagation. NIST has a long track record of working with industry on problems of interest to industry and a long tradition of research on IT and telecommunications problems. NTIA’s mission centers around telecommunications, and it has a research program, albeit much smaller and narrower than the activities recommended here. TOWARD INCREASED INDUSTRY SUPPORT FOR TELECOMMUNICATIONS RESEARCH Research that seeks fundamental breakthroughs in communications services and applications or seeks to define new service architectures and transition strategies may not necessarily benefit any one company exclusively, but companies that have made more strategic or rapid research investments stand to benefit as new capabilities are developed and deployed in the industry. The committee believes that the U.S. telecommunications industry should certainly increase its support for more fundamental, cooperative, breakthrough research—although the committee also understands that the issues involved in doing so are complex. For example, a primary obstacle to overcome is “free-riding” (a concept described in more detail in Chapter 2), whereby any one company can benefit from the freely available results of research even while failing to contribute to it. A solution might be the use of mechanisms for sharing resources and responsibility for research across the industry, as an alternative to conducting proprietary research within each carrier. Another way to encourage service provider participation is for government to provide matching funds or other incentives such as R&D tax credits. One avenue for increasing industry support for fundamental research would be participation in joint, cooperative research activities organized by ATRA and funded jointly by industry and government whereby industry could pool funds, spread risk, and share beneficial results through cooperative efforts between industry and academia. Another option is cooperative resource sharing. An example is a shared-responsibility research program conducted not long ago by the regional Bell operating companies through Bellcore, which they owned jointly. However, as the companies began to compete with one another, they divested Bellcore. In contrast, the proposed ATRA would not be subject to the same pressures because it would be led by the federal government rather than a board made up of competing firms. An organization such as Bellcore can provide a forum for research and development work that spans multiple service providers and addresses issues offering little potential for companies to distinguish themselves individually and thus little incentive to invest; for certain activities, significant savings from centralization and economies of scale and scope; and opportunities for conducting end-to-end interoperability testing across equipment manufactured by different vendors that otherwise would entail an investment in equipment too expensive for individual research groups. Examples from other industries of creative cooperation show that, provided care is taken in the type of research conducted (e.g., keeping the time horizons long and focusing on major architectural advances), the outcomes can be mutually beneficial to the industry as a whole while not harming the chance to compete vigorously in current or nearer-term business opportunities. Examples of simultaneous cooperation and competition (“co-opetition”) can be found

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Renewing U.S. Telecommunications Research in such diverse organizations as SRC, SEMATECH,9 and EPRI and in standards development groups organized by the Internet Engineering Task Force, the Institute of Electrical and Electronics Engineers, and the Telecommunications Industry Association. 9 William J. Spencer and Peter Grindley, “SEMATECH After Five Years: High-Technology Consortia and U.S. Competitiveness,” California Management Review, 35(4):9-32, Summer 1993.