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The health of the U.S. telecommunications

The health of the U.S. telecommunications sector depends on maintaining leadership in innovation.

Telecommunications products and services generally become commoditized over time as multiple firms acquire the know-how to supply similar, competing products, and such competition has benefits in terms of lower prices for goods and services. To maintain leadership—or even a strong position—in telecommunications in the face of pressures from lower costs overseas for labor and other essentials thus requires that U.S. firms constantly focus on achieving high-value innovation as a foundation for developing non-commodity products and services. Research leadership in telecommunications by U.S. academic research institutions and government and industry labs has historically given the nation an advantage in terms of access to new technologies and the highest-caliber engineering talent.

Notable benefits have accrued to the United States as a result of its leadership in defining the Internet’s design, for example. However—by virtue of its very success—the existing Internet architecture has become difficult to change. Despite many potential avenues for significant improvements in areas ranging from security to real-time audio and video transmis sion, research and development has become largely incremental in nature. Moreover, the current architecture is largely commoditized, and firms from other nations will become increasingly able to deliver competitive products and services. Research aimed at defining future architectures promises particular benefits because U.S. firms will be positioned to offer new kinds of services and not just incremental improvements to existing ones.
Telecommunications research carried out on behalf of the telecommunications industry can have a powerful payoff for all members of the industry.

Because the value of a network grows with the number of its users, network operators will seek to make their networks interoperable with those of other operators. Interoperation requires some degree of common technology, which means that many network innovations cannot be appropriated by a single player.Without renewed investment and resulting opportunities to do research, it will be very difficult to attract, train, and retain the research talent required for the United States to maintain a strong position in telecommunications.

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