NTIA Launching $1.5B Innovation Fund to Explore Alternative Wireless Equipment

WASHINGTON, December 7, 2022 – The federal government plans to leverage funding from the Chips and Science Act to put toward diversifying the country’s supply of equipment for its cellular networks, according to reporting from Axios and confirmed by the National Telecommunications and Information Administration.

The news site reports that $1.5 billion from the $280-billion research and manufacturing legislation will go toward domestic alternatives to current wireless equipment, the bulk of which is supplied by foreign companies including Finland’s Nokia, Sweden’s Ericsson, and China’s Huawei. A rip-and-replace fund has been set up to remove Huawei’s equipment from existing networks due to national security concerns.

The Innovation Fund program will be launched by the NTIA, Alan Davidson, head of the Commerce agency, said on Twitter. There will be a public comment period lasting until January 2023, Axios reports.

“The highly consolidated global market for wireless equipment creates serious risks for both consumers and U.S. companies,” Davidson told Axios.

The money could bolster the open radio access network industry, Axios reports, which advocates for equipment standards that are interoperable with each other, instead of the industry relying on proprietary technologies from a handful of dominant suppliers.

The Federal Communications Commissions has already been leaning favorably toward ORAN technologies. Last year, the commission launched its first inquiry into the technology.

“If we can unlock the [radio access network] and diversify the equipment in this part of our networks, we may be able to increase security, reduce our exposure to any single foreign vendor, [and] lower costs,” said FCC Chairwoman Jessica Rosenworcel after the announcement of the inquiry.

Huawei, one of the world’s largest suppliers of telecommunications equipment, is popular globally because it is less expensive than its large competitors.

A report released in October by Georgetown University’s Center for Security and Emerging Technology said that, due to the low cost of Chinese equipment, public schools and local governments will purchase from the third-party entities that are unknowingly selling the prohibited equipment, leaving government agencies and community anchor institutions vulnerable to security breaches.

At least six state governments had their networks breached by a state-sponsored Chinese hacking group between May 2021 and February 2022, the report said.