By Bret Swanson

Inflation, COVID-19, and chaos on the southern border: Look
around and you will see policy mistakes everywhere. If you had to choose one
arena in which recent US policy has been mostly successful, however, you might quickly
settle on internet infrastructure.

Even before the pandemic, massive private investment in US
wired and wireless networks was the foundation on which entrepreneurs built the
world’s most valuable companies in the nation’s most successful industries —
software, e-commerce, smartphones, social media, cloud computing, and more. The
pandemic performance of the US internet only put this broadband policy success in
starker relief.

Part of America’s broadband policy success has been rooted
in a wireless spectrum approach that balances licensed and unlicensed airwaves.
Finding, packaging, and auctioning spectrum hasn’t always been easy or smooth. But in the last few
years, the US has made major strides — especially in the “mid-band,” which is crucial for 5G mobile and beyond.

Early this year, the Federal Communications Commission (FCC) completed its largest ever auction: 280 megahertz (MHz) of prime radio waves known as the C-band, which fetched $82 billion for the US Treasury. Right now, the FCC is engaged in another auction of 100 MHz of mid-band spectrum situated at 3.45–3.55 gigahertz. To date, the auction has completed 69 rounds of bidding, and provisional gross proceeds total $20.83 billion. These two auctions alone will nearly double the existing deployed commercial spectrum in the US.

And yet not everyone is happy. For example, my AEI colleague
Paul Wolfowitz, writing last month in the Wall Street Journal, argued that
the auction approach hampers American technological advance. Wolfowitz implies
that networks built and operated by the Pentagon or by states and
municipalities would be more efficient. These entities wouldn’t have to pay for
spectrum; they would share it. And government networks wouldn’t be
“duplicative” like the major mobile carriers that must compete against one
another. The suggestion is that we could plow more money into network infrastructure
with a public, as opposed to a private, approach.

But where’s the dearth of network investment? With just 4
percent of the world’s population, the US makes 18 percent of all capital investments in wireless
networks. It’s true that mid-band spectrum seems pricey. But why would anyone
pay princely sums for these airwaves if they didn’t plan to build the advanced
networks needed to recoup these large investments?

Washington and the states already subsidize the building of otherwise uneconomical networks in sparsely populated rural areas. But that’s a targeted intervention to correct a narrow market failure. Turning over the bulk of the internet to government entities with little or no network experience seems foolhardy. Most of these bureaucracies are having a difficult time focusing on and accomplishing their primary missions. The internet, meanwhile, is one piece of infrastructure that is manifestly operating at a high level of performance under the policy of private-led investment and operation.

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