America’s infrastructure needs a serious upgrade. That includes the nation’s digital infrastructure — the critical networks underpinning commerce, defense, transport, and public safety.  It sustains innovation power — the ability to invent, adapt, and adopt new technologies — integral to our competitiveness and national security in the 21st century.

This nation has been the pacesetter of the digital era, with a sequence of game-changing innovations in cellular technology: 2G brought text; 3G brought mobile broadband and BlackBerry; 4G brought mobile video and the app stores. But now we are far behind in technologies like 5G, with less than half the speed of Bulgaria or Malaysia, and just 7% of South’s Korea’s number of 5G base stations per capita. While the Chinese technology firm Huawei’s global market dominance in 5G has been slowed somewhat by sanctions and export controls, it is not threatened by superior U.S. innovations.

Now, with the release of the first-ever National Spectrum Strategy, the Biden administration has shown it is taking America’s waning digital infrastructure seriously. The strategy — along with the broadband investments of the Infrastructure Investment and Jobs Act and the CHIPS and Science Act’s industrial policy — recognizes that telecommunications policy and infrastructure are critical for preserving American technology leadership. But despite these advances, our approach to spectrum innovation isn’t sufficient.

One problem is our failure to address the evolving telecommunications technology landscape. For example, accelerated mobile network deployment, now entering the 5G era, dominates the debate on spectrum policy and allocation. That made great sense in the 1990s and 2000s, when the cellular technology leaps mentioned above powered the smartphone revolution, but it makes less sense today.

While we should worry that the United States is so far behind in 5G, mobile networks are just one part of an increasingly complex communications system of data exchanges between people, computers, devices, apps, the cloud, and autonomous agents.

Hyperscale companies process two-thirds of global data traffic — including that flowing from mobile cellular networks — and own the undersea fiber-optic cables transmitting data between continents. Much communication happens via internet connections enabled by Wi-Fi, an unlicensed wireless technology. We spend 90% of our time, and consume 80% of data, indoors where mobile cellular coverage is less and less practical. Even looking at mobile network users alone, half or more of all smartphone data is transmitted over Wi-Fi, not the carrier’s spectrum.

Our spectrum policies don’t reflect this, and mobile network operators themselves acknowledge the present model does not encourage them to build. They are already slowing investment in 5G network deployments and signaling their disinterest in 6G investment. Europe’s third-largest telco, Orange, has gone further, saying: “5G is the last ‘G’ and we’re moving beyond Gs . . . Orange will not be marketing 6G when its form emerges.” As wireless use cases evolve, our spectrum management regime must keep pace.

We should further define the strategy to play to our strengths and avoid competing where we don’t have a chance of winning. Targeted government subsidies can be helpful and necessary, but we probably won’t see another round of substantial government investment soon, and we probably can’t or won’t outspend China anyway. We’re also unlikely to produce commodity communications equipment better or cheaper domestically, and shouldn’t embrace a government-directed command economy. We can pressure countries not to use Huawei systems, but absent a clear alternative that is cheaper or superior, this is tantamount to asking them to live in the past and give up the growth we know the digital economy brings.

But we do have comparative strengths on which to build, specifically in software, in competitive innovation, and in market shaping and design, that provide us a strategic opportunity to develop world-class digital infrastructure.

First, America excels at software development, and network architecture is increasingly software-defined, similar to how computing has been virtualized into the cloud. Even where non-American companies supply network hardware, American companies can compete if they excel at producing the software necessary to manage those networks. Open Radio Access Networks — which allow multiple vendors to build the mobile ecosystem — are a good start and will encourage innovation. We also need to make more “killer app” use cases for wireless technology. If we create more game-changing wireless applications — from advanced manufacturing, to smart cities, to autonomous transport, to remote sensing — we create demand that pulls digital infrastructure forward. Advancements in AI applications for network management will also increase the technical capacity for spectrum utilization.

Second, in response to competitive command economies, we could promote competitive access to spectrum in order to accelerate innovation. The National Spectrum Strategy reflects a refreshing openness to sharing of spectrum “by design,” but we can do more. As FCC chairwoman Jessica Rosenworcel articulated, we need to “turn spectrum scarcity into abundance.” Exclusive use increases scarcity and we should avoid it unless there is a clear and credible rationale.

Licensing innovation can foster innovation, as seen in the successful Citizens Broadband Radio Service experiment to share spectrum, with over 370,000 access points deployed. There are also opportunities in spectrum auction design — an American innovation the world has adopted that provides a useful mechanism for allocating spectrum usage rights. For example, Nobel winner Paul Milgrom and others have developed a concept called “depreciating licenses,” where auction winners declare a spectrum value that determines both an annual license fee and buyout price at which they agree to sell. When Congress restores the FCC’s auction authority — hopefully soon — it should consider how it can enable creative spectrum allocation tools to maximize public benefit.

At the same time, we need to devise policies to ensure we achieve the ultimate objective — a functional network. We should develop creative uses of funds that reduce service costs and incentivize fast and vast deployment. Perhaps auction payments could be set aside to provide low-cost loans for network development, with strict performance requirements and clawback provisions. While this may result in forgoing some auction revenue, the lasting economic value created in GDP, productivity, and new products would easily outweigh this shortfall, promoting best-in-class digital infrastructure.

America’s vast innovation potential has been a powerful engine for prosperity and security. But we can’t compete against our global peers with that engine throttled by last-generation digital infrastructure and policy. We must acknowledge new realities and play to our strengths to reverse digital infrastructure deterioration.

America’s infrastructure needs a serious upgrade. That includes the nation’s digital infrastructure — the critical networks underpinning commerce, defense, transport, and public safety.  It sustains innovation power — the ability to invent, adapt, and adopt new technologies — integral to our competitiveness and national security in the 21st century.

This nation has been the pacesetter of the digital era, with a sequence of game-changing innovations in cellular technology: 2G brought text; 3G brought mobile broadband and BlackBerry; 4G brought mobile video and the app stores. But now we are far behind in technologies like 5G, with less than half the speed of Bulgaria or Malaysia, and just 7% of South’s Korea’s number of 5G base stations per capita. While the Chinese technology firm Huawei’s global market dominance in 5G has been slowed somewhat by sanctions and export controls, it is not threatened by superior U.S. innovations.

Now, with the release of the first-ever National Spectrum Strategy, the Biden administration has shown it is taking America’s waning digital infrastructure seriously. The strategy — along with the broadband investments of the Infrastructure Investment and Jobs Act and the CHIPS and Science Act’s industrial policy — recognizes that telecommunications policy and infrastructure are critical for preserving American technology leadership. But despite these advances, our approach to spectrum innovation isn’t sufficient.

One problem is our failure to address the evolving telecommunications technology landscape. For example, accelerated mobile network deployment, now entering the 5G era, dominates the debate on spectrum policy and allocation. That made great sense in the 1990s and 2000s, when the cellular technology leaps mentioned above powered the smartphone revolution, but it makes less sense today.

While we should worry that the United States is so far behind in 5G, mobile networks are just one part of an increasingly complex communications system of data exchanges between people, computers, devices, apps, the cloud, and autonomous agents.

Hyperscale companies process two-thirds of global data traffic — including that flowing from mobile cellular networks — and own the undersea fiber-optic cables transmitting data between continents. Much communication happens via internet connections enabled by Wi-Fi, an unlicensed wireless technology. We spend 90% of our time, and consume 80% of data, indoors where mobile cellular coverage is less and less practical. Even looking at mobile network users alone, half or more of all smartphone data is transmitted over Wi-Fi, not the carrier’s spectrum.

Our spectrum policies don’t reflect this, and mobile network operators themselves acknowledge the present model does not encourage them to build. They are already slowing investment in 5G network deployments and signaling their disinterest in 6G investment. Europe’s third-largest telco, Orange, has gone further, saying: “5G is the last ‘G’ and we’re moving beyond Gs . . . Orange will not be marketing 6G when its form emerges.” As wireless use cases evolve, our spectrum management regime must keep pace.

We should further define the strategy to play to our strengths and avoid competing where we don’t have a chance of winning. Targeted government subsidies can be helpful and necessary, but we probably won’t see another round of substantial government investment soon, and we probably can’t or won’t outspend China anyway. We’re also unlikely to produce commodity communications equipment better or cheaper domestically, and shouldn’t embrace a government-directed command economy. We can pressure countries not to use Huawei systems, but absent a clear alternative that is cheaper or superior, this is tantamount to asking them to live in the past and give up the growth we know the digital economy brings.

But we do have comparative strengths on which to build, specifically in software, in competitive innovation, and in market shaping and design, that provide us a strategic opportunity to develop world-class digital infrastructure.

First, America excels at software development, and network architecture is increasingly software-defined, similar to how computing has been virtualized into the cloud. Even where non-American companies supply network hardware, American companies can compete if they excel at producing the software necessary to manage those networks. Open Radio Access Networks — which allow multiple vendors to build the mobile ecosystem — are a good start and will encourage innovation. We also need to make more “killer app” use cases for wireless technology. If we create more game-changing wireless applications — from advanced manufacturing, to smart cities, to autonomous transport, to remote sensing — we create demand that pulls digital infrastructure forward. Advancements in AI applications for network management will also increase the technical capacity for spectrum utilization.

Second, in response to competitive command economies, we could promote competitive access to spectrum in order to accelerate innovation. The National Spectrum Strategy reflects a refreshing openness to sharing of spectrum “by design,” but we can do more. As FCC chairwoman Jessica Rosenworcel articulated, we need to “turn spectrum scarcity into abundance.” Exclusive use increases scarcity and we should avoid it unless there is a clear and credible rationale.

Licensing innovation can foster innovation, as seen in the successful Citizens Broadband Radio Service experiment to share spectrum, with over 370,000 access points deployed. There are also opportunities in spectrum auction design — an American innovation the world has adopted that provides a useful mechanism for allocating spectrum usage rights. For example, Nobel winner Paul Milgrom and others have developed a concept called “depreciating licenses,” where auction winners declare a spectrum value that determines both an annual license fee and buyout price at which they agree to sell. When Congress restores the FCC’s auction authority — hopefully soon — it should consider how it can enable creative spectrum allocation tools to maximize public benefit.

At the same time, we need to devise policies to ensure we achieve the ultimate objective — a functional network. We should develop creative uses of funds that reduce service costs and incentivize fast and vast deployment. Perhaps auction payments could be set aside to provide low-cost loans for network development, with strict performance requirements and clawback provisions. While this may result in forgoing some auction revenue, the lasting economic value created in GDP, productivity, and new products would easily outweigh this shortfall, promoting best-in-class digital infrastructure.

America’s vast innovation potential has been a powerful engine for prosperity and security. But we can’t compete against our global peers with that engine throttled by last-generation digital infrastructure and policy. We must acknowledge new realities and play to our strengths to reverse digital infrastructure deterioration.