How is North America affecting policy change and industry competition?
The participation of White House and Congressional speakers at 6G World’s recent symposium shine a light on the strategic prioritization of next generation communications systems. Political participation matters in the context of 6G leadership ambitions, the practicalities of which I outlined in this three-part article series for 6G World - 1: Leadership, 2: Purpose, 3: Leverage.
The event was equally important for shedding light on how industry stakeholders are approaching emerging 6G topics and market development activities. The mix of discussions spanned academic research, commercial and operational implications of 6G, industry competition, long-term Federal funding programs, policy priorities, standardization, and vertical-industry requirements. Rather than summarize each panel discussion chronologically, here are several threads that ran through the different sessions, beginning with the need to learn from the past.
“6G Needs to Learn from 5G”
Technical and standardization experts who are less in the 5G marketing limelight challenged the narrative around 5G’s weak demand. One message was about the flexibility designed into 5G’s architecture, the benefits of which will be realized across the evolution of 5G and subsequent generation systems.
The process of 5G also prioritized eMBB (enhanced Mobile Broadband) over mMTC (massive Machine Type Communications) use cases, partly to manage the scope of work. As industry focus shifts beyond broadband, attention is turning to enterprise, IoT and closely related technologies such as digital twins and AI/ML. Looking ahead, the industry needs to prepare for a wider scope of use cases as 6G contains six categories which will shift market and industry paradigms.
Competition and Industry Paradigm-shifts
The cellular industry emerged from a market defined by voice, roaming and landline communications. This is no longer the relevant backdrop especially as cellular operators are no longer exerting their (central) role in the ecosystem. There is a view that they are not in charge of setting the requirements and that suppliers are not benefiting from the oversight they historically provided. To some extent, this is one consequence of the industry paradigm shift from vertically integrated businesses to open access infrastructure. In parallel, the telco developer ecosystem is giving way to Internet and App developers.
These changes are setting the stage for customized connectivity, full programmability, and resource sharing. Customized connectivity appeals to the enterprise sector whereas many cellular operators are often geared up to consumers. Full programmability sets the stage for a transition from automation to autonomous operations with implications for workforce size and skills requirements. Resource sharing heralds the end of building vertically integrated stacks with providers expected to do less with hardware and more with software with horizontal approaches. Through a transition that might take several years to take hold there are expectations for a shift from current, software-licensing frameworks to ‘as-a-service’ models.
Panelists outlined other technology and standardization paradigm shifts that the industry needs to anticipate. For example, the communications sector dominated the technology development progression from 1G to 5G. However, the industry can no longer depend on communications sector specialists when the next generations of communications systems will involve much higher levels of compute capabilities. In 3GPP Releases 17 and 18, for example, the “data plane is just a pipe with a few add-ons”. The compute world, however, introduces multiple data centric services which will require much greater intelligence capabilities. Since 5G has no ‘compute’ plane, compute awareness is handled as an over-the-top capability, with technical and commercialization and monetization implications. It remains to be seen how existing, telco-centric models will engage other industry specialists and absorb the new requirements they are likely to introduce.
Business Model Implications
Across the industry, network operators are already flagging concerns about 6G-related investments and the need to avoid heavy CapEx network improvements. This is one of the factors favoring the adoption of cloud and open infrastructure offerings. Anticipation for one of the biggest business model changes relates to the commercialization of new capabilities for multiple ‘customer’ groups which include network operators, hyperscalers and multiple developer communities. As an example, Google’s representative put forward the idea of Google becoming the (communications) ecosystem and the developer ecosystem. Such ideas for ecosystem orchestration carry obvious implications for incumbents, industry competition and business model innovation.
One area where communications service providers need to adapt is in the area of business support systems (BSS). This element in the technology architecture tends to hamper innovation and constrain service monetization opportunities. This is a case of a legacy turning into a liability.
Over the top service providers are wise to business operations issues and actively looking for disintermediation strategies. One of the examples discussed applied to cars, many of which only get about 200 hours of use per year. While innovators are interested in tailoring subscription models around usage measures, their approach contrasts with annual subscription models which tend to be the default for many communications service providers.
Subscription management is a middle-person role; in the personal data sector, innovators want to disintermediate telcos. As one speaker noted, this dynamic is reflected in a growing use of the #ownmydata social media tag.
Rationales for Interoperability
The personal data reference illustrates how the scope of the communications industry is changing from its initial voice + roaming + landline paradigm. The many greater uses of data will multiply the application possibilities with corresponding long-tail monetization possibilities. This is one of the reasons to advocate for interoperability.
Another reason concerns the business and operating environments that 5/6G’s flexible open and architecture will enable. Since these will not be vertically integrated or vendor-specific walled garden environments, concepts such as end-to-end service quality and joint optimization on an industry-wide level depend on sound interoperability foundations. This also applies to a future where federated sub-systems are able to support distributed compute and compute-as-a-service offerings.
“Understand Verticals to Interpret Demand”
One way for service providers to gain commercialization leverage is by understanding and addressing demand. The 6G Symposium agenda included panels that addressed agriculture, automotive and digital media sectors. As the NextG Alliance demonstrated in its research into vertical industry needs, to which I contributed, many requirements highlight opportunities for better packaging of communication systems capabilities rather than ground-breaking innovations.
The Agri-sector discussion contained several examples such as the need to plan for a one-week window for seeding or harvesting. That requires a fleet management solution that provides farm managers with information about vehicle availability, vehicle type, operating status, and location. In case of vehicle problems, remote diagnostics can improve workforce management. Farmers currently rely on off-line map data for their fields. Online data would avoid re-farming and re-seeding situations. At some point in the future, it would be desirable to track a seed over its lifecycle, from seeding to harvest.
Innovation vs. Engineering
None of the Agri-sector requirements depends on breakthrough innovations typically associated with 6G. If anything, there is a need to balance 6G research investment between technology innovation and engineering or utilitarian solutions. Examples of the latter include research on energy efficiency in communications systems and developments that can improve spectrum use.
One speaker commented that a promising role for 6G is to make 4G and 5G work together by offering a framework that integrates multiple technologies and fixing the foundations of 5G’s flexible architecture.
North America’s Market-economy Paradox
North American businesses have a strong presence in most of the sectors that make up the communications ecosystem. This is also the case for 6G’s wider scope which covers industrial players that will drive demand and suppliers of cloud, computing, and content capabilities. Market economy principles contribute industry dynamism, market responsiveness and wealth creation to an unprecedented degree. There are a lot of dynamic, short to medium-term activities.
And yet, when it comes to longer term developments, there is a palpable concern that North America is not doing enough to maintain and develop its leadership record. For example, market-economy principles are not producing a large enough or suitably trained workforce for the expertise and jobs that will contribute to the 6G economy. Nor does the current system facilitate basic governance activities – in areas such as site permitting and spectrum management - in ways that support long-term planning and timely deployments.
Market economics also encouraged off-shore technology development and manufacturing leading to long-term supply-chain vulnerabilities and loss of technology sovereignty. As a result, the ecosystem is trying hard to readjust itself with a call for government involvement.
Adjusting for the Future
Industry participants acknowledge that government agencies will have to play a stronger role in 6G and the national agenda. This is coupled to a strong appetite for public-private collaboration. The big challenge is how to incentivize and stimulate dynamism in areas where outcomes take time to materialize and where market-economy principles are not delivering.
A few ideas came up in the panel session I moderated. Firstly, the industry needs to go further in thinking about value chains. As an example, technology suppliers need to explore ways of creating new revenue opportunities for their network operator customers to alleviate the commercial squeeze that the latter face. This is not a short-term undertaking and will raise profound issues about industry structure and value sharing.
Secondly, the communications industry needs to plan for the IT-telco divide giving way to a platform infrastructure that all ecosystem participants can leverage (via multi-sided business models). The foundations for this exist in the flexibility designed into 5G.
Thirdly, learning from 5G’s emphasis on eMBB use cases, 6G developments need to address a broader scope and to do so in a way that is more connected to drivers of demand. That entails closer and earlier involvement with industry verticals. The same applies to the drivers of societal needs, many of them emanating from less privileged and digitally dependent populations.
Adapting to these realities might be the biggest paradigm shift for North America’s 6G ecosystem.
