The U.S. government’s attempts to stymie Chinese vendors’ strength and ability to build radio access networks (RAN) and software for 5G is evolving. A group of U.S. senators last week introduced a bill that would funnel more than $1 billion into 5G-related research and development in open RAN technologies that could elevate U.S. companies as an alternative to Huawei and ZTE.

Some of the American-based companies that could benefit from the proposal include RAN vendors Airspan Networks, Altiostar, JMA Wireless, Mavenir, and Parallel Wireless. Corning and Intel are also partnering on a virtualized platform for indoor 5G equipment, and Cisco is a heavy player in the software space but has said it has no plans to become a RAN vendor.

In 2019, multiple federal agencies and the White House imposed trade sanctions and formally banned Huawei and ZTE from supplying 5G equipment to domestic operators, purchasing American-made products, or receiving federal subsidies. It also pressured its allies to follow suit with mixed results. Federal authorities, regulators, and many politicians view Huawei as a threat to America’s national security.

Huawei denies all allegations of espionage, intellectual property theft, and security vulnerabilities in its software. The vendor also filed a lawsuit against the U.S. government in March 2019, challenging an order that bans the government, its contractors, and suppliers from purchasing Huawei equipment or service.

The legislative proposal and funding marks a new line of attack against Chinese vendors, particularly Huawei’s continued ascendance as 5G deployments gain momentum around the globe. However, there’s an open question about how much impact the federal subsidies will have on the market and the extent to which the proposal will be viewed as hypocritical considering the criticism Huawei has endured for being subsidized by the Chinese government.

The amount of money being proposed is a “big number” but there are bigger questions about how the money will be spent, who will receive the money, and whether the investment will be focused on macro cells or small cells, said Chris Nicoll, principal analyst at ACG Research.

“I don’t think this will blunt the advancement of either ZTE or Huawei in the short term,” Nicoll said. “Open RAN needs maturation and the ecosystem is still fairly complex — something I am hearing from many operators in the United States and internationally.”

Network performance is a challenge, but “pulling together several different companies into a stable and high-performing solution is a big challenge that needs to be addressed now,” he explained. “Fixing that will take time [and] I think orchestration will play a big part in solving the complexity issue.”

Moreover, $1 billion pales in comparison to the amount of money Huawei, ZTE, and other RAN vendors are investing in 5G. ZTE earlier this month announced plans to raise $1.7 billion to invest in 5G research and development.

Huawei officially says it invested more than $600 million in 5G technology research between 2009 and 2013, followed by another $1.4 billion investment in 2017 and 2018. But it also spent $15.3 billion in research and development in 2018 so the total investment in 5G to date is likely much higher.

The latest U.S. government proposal also fails to address the current dynamics of the 5G RAN market, specifically the Scandinavian and South Korean-based companies that are better positioned and already competing at a much higher level with Huawei and ZTE.

Ericsson CEO Börje Ekholm dismissed the notion that Ericsson is getting a “free ride” or otherwise unfairly benefitting from the U.S. government’s widening and sustained campaign against Chinese vendors. “So far there are very little effects in our order books from any of these discussions. It’s more actually creating uncertainty in the market, reducing investments all over the world. I think the whole uncertainty that we have geopolitically is not positive,” he said in an interview with CNBC at the World Economic Forum.

He also rebutted claims that Huawei’s 5G technology is more advanced than Ericsson. “The first operational 5G networks had gear from us. It’s hard to be behind them,” Ekholm said. “I find it to be difficult to say we are behind when we see no one ahead of us.” He added that the first European 5G network was also built entirely on Ericsson equipment.

Later, during a dinner with executives at the World Economic Forum, President Donald Trump reinforced Ericsson and Nokia’s position in 5G, saying that “Ericsson’s done a great job with 5G” and that “[Nokia’s] doing very well and advanced with 5G,” according to Seeking Alpha.

Mobile network operators are pushing for competition in the RAN space, but it is a tightly controlled and difficult-to-enter market dominated by Huawei, Ericsson, Nokia, Samsung, and ZTE. As such, there’s a growing focus on opening and virtualizing the RAN to disaggregate hardware from software and empower new players to emerge.

A number of companies are trying to break into the space with varying levels of success but significant changes will have to occur before RAN stalwarts lose their grip. It’s unclear if and how open RAN will impact Huawei’s dominance in any meaningful way.

“I think success will come from trying to get these companies to work together on an interoperable 5G solution that addresses indoor and outdoor needs in sub-7 GHz and [millimeter wave] networking,” Nicoll said. “Ericsson, Nokia, and Samsung are already building the U.S. macro 5G networks. The real battle will be indoor, mmWave, and industrial 5G small cell networks.”