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Internet of Things March 2018 Viewpoints

Technology Analyst: Guy Garrud

Developments in 5G Networks

Why is this topic significant?

Next-generation wireless telecoms will be a crucial component of any large-scale Internet of Things implementation. Standards emerging now will influence the IoT for years to come.

Description

In January 2018, the website Axios leaked documents from the US National Security Council (NSC) that propose establishing a centralized, government-run, fifth-generation (5G) cellular network within the next three years. Under these proposals, the US government would construct and own the network and lease it to telecoms providers.

The documents suggested that either the US government could pay for and build the network itself, or it could work alongside private telecoms companies in a consortium. The document cites Chinese "dominance" in the manufacture and operation of network infrastructure as a key security concern. The report also describes establishment of the proposed 5G network as a modern equivalent of President Eisenhower's work to establish a highway network and President Kennedy's influence on the US space program.

Following Axios's publication of the leaked documents, the US Federal Communications Commission (FCC) sought to distance itself from the proposal, and all five FCC commissioners publicly rejected the proposal of a nationalized 5G network. Axios also reported that a source familiar with the document's drafting told the site that the leaked version was an earlier draft and that more recent versions had a toned-down proposal.

Implications

Wireless internet access is a key requirement for many IoT applications. Device developers have several options for connecting devices. Cellular connections are well suited to situations in which remote devices communicate over long distances and in which a Wi-Fi or Bluetooth network is impractical; they are also well suited for mobile applications such as autonomous vehicles.

The proposal for a government-run 5G network is unrealistic without widespread support from both telecoms providers and the FCC. The proposal for heavy federal involvement in telecoms infrastructure is also counter to previous approaches to telecoms in the United States. Telecoms companies have already invested heavily in developing 5G technology, and a common framework for 5G telecoms is emerging. In particular, December 2017 saw the 3GPP (3rd Generation Partnership Project) sign off on a non-stand-alone 5G standard: the 5G NR (5G New Radio).

Impacts/Disruptions

The leaked NSC proposal focuses more on security than on technical and commercial considerations. The report highlights that parts of the intelligence community view the emerging IoT and 5G telecoms as potential security risks. Chinese companies including Huawei and ZTE are major players in the telecoms hardware market, and moves to prevent US telecoms companies from using Chinese equipment would have a dramatic impact on the IoT hardware market. More broadly, protectionist approaches and increased scrutiny on international trade of network hardware could have a strong impact on hardware manufacturers.

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: High

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: 5 Years

Opportunities in the following industry areas:

Telecoms providers, network-infrastructure providers, telecoms-hardware manufacturing, cybersecurity, portable electronic device design and manufacture

Relevant to the following Explorer Technology Areas:

Blockchain for IoT

Why is this topic significant?

Cybersecurity is a major concern for IoT device manufacturers and service providers. Blockchain technology could help enable secure device-to-device communication.

Description

In January 2018, IBM hosted a panel discussion—"Combining IoT and Blockchain Toward New Levels of Trust"—which included representatives of the Massachusetts Institute of Technology (MIT), IBM, and AT&T.

In the panel discussion, Michael Casey of Agentic Group described blockchain as a platform, similar to the internet, that facilitates end-use applications such as supply-chain management. MIT professor Christian Catalini stated that blockchain technology acts both to reduce the cost of verification and also to reduce the cost of networking: "You can bootstrap a digital platform without assigning a lot of market power to one single entity." Ramesh Gopinath of IBM highlighted some of the ways that the IoT and blockchain technology can improve security. IoT devices can provide reliable data sources for a blockchain rather than relying on human input. In addition, blockchain technology can help verify transactions such as ensuring the authenticity of a software update for an IoT device.

December 2017 saw the launch of the lightning network, a second-layer protocol for the bitcoin network. The lightning network facilitates transactions between nodes and, potentially, through third-party nodes, with only the final resolution uploaded to the overall blockchain. The purpose of the lightning network is to increase the speed of transactions by reducing the amount of data that each transaction must upload to the main blockchain. The lightning network also uses encryption and time-locked smart contracts to facilitate so-called trustless transactions.

Implications

Blockchain is approaching the peak of the hype curve, a phenomenon in which overinflated expectations surrounding an emerging technology can generate enormous interest, only to be followed by widespread disappointment when the technology fails to live up to its imagined potential. Some groups are advocating blockchain as a solution for situations for which existing technologies and approaches are likely better suited.

Blockchain, or derivatives of it—particularly the lightning network and smart contracts—could be an important synergistic development for the Internet of Things. The lightning network demonstrates a means of connecting devices through a mesh network. Mesh networking reduces the load on existing network infrastructure and potentially increases connectivity for devices beyond the reach of existing Wi-Fi or cellular antennas. Even so, blockchain is a software layer of interaction but still requires broadcast via a wireless or wired technology such as Wi-Fi or Bluetooth to transmit data.

As Professor Catalini highlights, applying blockchain to mesh networks (such as the lightning network) does not require one particular company or group to control all the nodes that information passes through. The reach of a mesh network could greatly increase if a company's remote devices can securely transmit data via third-party hardware that happens to be nearby. Indeed, applying blockchain to IoT applications could be disruptive to the walled-garden approach taken by many IoT platform providers.

Impacts/Disruptions

Blockchain is still a fairly immature technology, although it has potentially far-reaching applications. The real impact of blockchain applications will likely take years to become clear. First movers in this space are potentially at an advantage but also take considerable risk in implementing a technology that may only offer marginal gains over alternative approaches.

Also, although blockchain could have a large disruptive impact, this impact is strongly dependent on many actors' adopting a common platform and is, perhaps, even more dependent on this cross-compatibility than even other IoT technologies.

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: High

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: 10 Years

Opportunities in the following industry areas:

Warehousing and logistics, fresh produce, retail, cybersecurity, IoT-platform providers

Relevant to the following Explorer Technology Areas: