Securing the Wireless Supply Chain

Center for Strategic and International Studies
Remarks of Sarah Morris
Principal Deputy Assistant Secretary of Commerce for Communications and Information (Acting)
National Telecommunications and Information Administration
Washington, DC
May 7, 2024

As prepared for delivery

Thank you, Alan. I also want to thank CSIS for hosting this conversation.

As you all know, we depend on our phones for daily life. But without a secure supply chain for network equipment, these devices - and everything we use them for - is at risk.

We saw firsthand the fragility of our supply chains during the pandemic and learned the importance of building resilient networks.

That is what our Wireless Innovation Fund is all about. The goal is to ensure we have a diverse range of high-quality suppliers who can plug their equipment into different parts of the mobile network. This will both strengthen the supply chain and improve competition, in turn driving innovation and network efficiencies.

As you heard from Alan, right now, just a few firms provide the full set of radios and computers that power mobile phones. And some of those vendors pose national security risks to the U.S. and our allies around the world.

We need better options that are secure, open and affordable. I'm excited to share how our next round of funding will help deliver those options.

Through this next funding opportunity, NTIA will make up to $420 million available to drive open radio unit commercialization and innovation.

What do we mean by radio units?

Radio units sit on the top of cell phone towers to receive and transmit signals. These critical components make up the largest - and most expensive - part of a carrier's network. They also provide a key opportunity for carriers to make the switch to Open RAN as they consider network upgrades, available spectrum, and market expansion.

Open radio units have the potential to drive cost savings, energy efficiencies, and new innovations that can then be passed on to consumers.

For open radios to achieve widespread adoption, however, they must not only be cost-competitive, but also meet or surpass the technical performance of traditional radios. NTIA is working to tackle both of these priorities through this round of funding.

1. Our first research area will drive commercialization by incentivizing suppliers and operators to collaborate; and
2. Our second research area will drive innovation through R&D.

By supporting both commercialization and innovation, we can overcome the technical and economic barriers to deployment we heard about when we sought comment in 2022.

Let me share a few more details on the two areas of focus for this next funding round.

The commercialization awards are big ones: We expect to award between $25 and $45 million per project.

To drive commercialization, we are requiring radio suppliers to partner with operators to develop products that meet operators' performance and feature requirements. Bringing together a seller and a potential customer from the start will increase the likelihood that the projects will be commercially deployed.

We are also requiring radio unit suppliers to submit a plan demonstrating their intent and ability to deploy these units commercially, following the grant period.

To encourage capacity building here at home, development of the radio unit products must take place in the U.S. However, we recognize that for the Innovation Fund to be successful, global promotion and commercial adoption are necessary. For this reason, we are giving applicants the flexibility to use funding for certain overseas activities, including operator lab and field testing.

Finally, to ensure applicants are committed to project success and taxpayer dollars are used efficiently, applicants seeking commercialization awards must provide at least 10% of the total project costs. We expect to primarily fund applicants who contribute more than this amount, and we will reward applicants during the evaluation process for doing so.

Now let me turn to the second research area - open radio unit innovation. These awards are smaller but still critically important: We expect to award between $5 and $10 million per project.

Our aim is to advance radio innovation by funding research across key areas that support future radio performance and capabilities.

We've opened up eligibility to both U.S. and foreign entities. We hope to leverage the creativity of expertise found across the private, non-profit, and academic sectors.

Similar to NOFO 1, NTIA is requiring this R&D take place in the United States - so as to support our innovation economy and President Biden's Investing in America agenda.

And while these are R&D projects, we expect applicants to have a plan to move beyond R&D toward post-award commercial application and prototyping. To this end, we are requiring applicants to provide details about their plan for investment and scaling after the grant period.

I will also note that for all awards, whether commercialization or innovation, NTIA will reward applications that demonstrate support for small and medium businesses.

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In closing, this round of funding is a large and strategic investment in key components of the wireless network.

Ensuring a range of high-quality suppliers throughout the hardware supply chain will give network operators options to mix and match equipment. This will help drive competition and lower prices.

And as more wireless carriers adopt open radio units, we will be that much closer to reaching our global goal of secure, resilient and trustworthy networks.

We look forward to engaging with you all to make this program a success.

Thank you.