The R&D Tax Credit Aspects of 5G Cellular Networks
There are a multitude of new technologies
hoping to enable and define future 5G networks. As 4G LTE
networks settle in as the current standard and continue
striving to meet the growth demands of coming wireless
technologies, research races have begun in order to move
towards 5G, the fifth generation of wireless networks.
The Research &
Development Tax Credit
Enacted in 1981, the Federal Research and
Development (R&D) Tax Credit allows a credit of up to 13
percent of eligible spending for new and improved products and
processes. Qualified research must meet the following four
Eligible costs include employee wages, cost of supplies, cost
of testing, contract research expenses, and costs associated
with developing a patent. On December 19, 2014, President
Obama signed the bill extending the R&D Tax Credit for the
2014 tax year.
- New or improved products,
processes, or software
- Technological in nature
- Elimination of uncertainty
- Process of experimentation
About Generations of
Cellular Networks and 5G
Cellular networks have typically evolved
about every decade since the first generation in 1981. G2
arrived in 1991, G3 in 2001, and 4G networks became
standardized in 2012, with 4G LTE settling in as the
transitional standard. These cellular network generations took
approximately a decade to come to market from the start of
their R&D process. Given the facts and trends about
wireless network generations, the time for 5G is coming near
and new internet-enabled technologies require a race towards
the next generation.
Many Directions to 5G
There are competing visions and standards
concerning what the shape and speed of 5G will look like and
how it will function. The main goals of 5G are increased
speed, flexibility, coverage, and volume, however the
standards are not agreed upon because the different
technologies are still being researched and
GSM History has written about the possible nature of 5G
networks, laying out a vision of a hybrid model which
incorporates several technologies. GSM History’s vision
also provides a foundation for both local and mobile access
that is faster, more efficient, and provides wider access to
users and devices.
GSM History explains that the foundation of future 5G networks
- Wireless Fiber: one part of
the approach would be to utilize wireless dark-fiber optic
networks in the dense urban areas where dark-fiber is
unused and leasable for peak network capacities.A wireless
fiber network would be a localized, hybrid form of
cellular networking used for fixed locations. This would
be the fastest of all the networks, at up to 10 Gb/second.
While this is just a composite vision of what the next
generation standard will be, one should recognize that 4G LTE
has only recently become the standard for the current
generation and does not enjoy universal deployment or access.
The evolution of 4G standards and technologies has been marked
with successes and failures in standardization and adoption.
5G standards and technologies may experience a similar course
- Universal Mobile Network:
Second would be implementing a “universal” mobile network
that runs faster and more efficient based on demand. This
network may provide true worldwide access for Internet of
An additional approach involves a super-fast mobile
network, created for high density urban cellular clusters.
This network would be much faster than the IoT network.
The Race is on -
Current Research Efforts
The upcoming cellular generation
development is early and open in nature, therefore companies
and researchers are competing and experimenting with new and
advanced wireless technologies.
Huawei Technologies, global provider of information and
communications technology (ICT) services, also has vision of
the 5G possibilities which includes the “5G HyperService
Cube”, an overview of the future 5G device space. The
HyperService Cube is a useful infographic for understanding
the placement of devices relative to the throughput, links,
and delay that they will expect in a 5G network. Huawei is
collaborating with partners, universities, and governments to
advance research and planning for the future.
Ericsson, another global ICT provider, also has publications
on 5G research. Ericsson's
5G whitepaper describes their ideas for the technical
demands of a 5G network which include data rates, seamless
mobility, reduced device cost, battery lifetime, reliability,
security and privacy, and reduced latency. In an interview
with Light Reading, Ericsson CFO Jan Frykhammar discusses the
efforts of current research - focusing on accommodating
current and future use cases to direct standardization in the
November 2014, Ericsson announced a partnership with IBM in an
effort to research new 5G infrastructure antenna designs.
These advanced antennas are comparable to over a hundred
antennas and radios, all on a chip smaller than a credit card.
The collaboration will help Ericsson create mobile networks
that provide for increased and capacity even in dense
Nokia Corporation has also published a whitepaper regarding
their vision of the 5G technology future. Nokia's
vision of 5G focuses on interconnection through
architecture that enables the family of existing networks to
work together with new and expanded demands, including
real-time, tactile control, and response of applications and
devices. Nokia expects data sizes and rates to drive increases
in demand through new automotive devices and Internet of
Things devices. Nokia's key design principles for 5G networks
are flexibility and reliability.
One of the major engineering challenges to developing a 5G
network standard is understanding the amount of radio spectrum
that is allowed to be used in a network. New York University's
NYU Wireless Center at Brooklyn is a research center dedicated
to next generation wireless technologies in communications and
medicine. The NYU Wireless Center is funded by the National
Science Foundation and the National Institute for Health.
cellular network R&D efforts are influenced by regulatory
policy that divide and apportion radio frequency spectrum for
different uses through government licenses sold at auction.
NYU's Wireless Center has advocated for the auction of wider
areas of radio spectrum to foster innovation and allow for
more sophisticated 5G wireless networks - offering the FCC
over 50 pages of comments on auctioning space of the
millimeter wave portion of the spectrum. The Wireless
Center commented that such an action would support and enable
further R&D activity for 5G networks. So far, the FCC has
auctioned what it calls the AWS-3 bands, which do not extend
into higher range of frequencies.
5G, the fifth generation of wireless
networks, is a frontier with competing standards, visions,
technologies, and no small amount of challenges to overcome
through extensive research and development. The amount of
uncertainty and risk involved in cellular network development
requires significant research and development effort.
Companies performing R&D related to the creation of the 5G
network can qualify for federal and state R&D tax credits.