How can America achieve a strategic bandwidth advantage? And why does it matter? One might think that those are questions best left to wonky domestic telecommunications experts. If so, one would be wrong. How those questions are answered will drive critical economic decisions over the next decade.

Throughout human history, economic growth has accelerated when incumbent inputs are replaced with new ones. Changes in power sources — from animals to steam engines to electricity — or transportation modes — from canals to rails to cars — caused dramatic growth in the economies that adopted them and long-term advantages to early adopters. America is at one of those key inflection points yet again. In every sector of the economy — from movies to medicine, from energy to education — innovators are replacing physical inputs with inputs that ride on chips, bits and … bandwidth.

Over the last 20 years, increases in computing power and the ability to retrieve and store data, combined with the mobile and data communications revolution, have altered how we exchange information, which in turn has stimulated growth throughout the economy and served as the cornerstone of its fastest growing parts. The Knowledge Economy, while still in its relative infancy, is upon us.

In many respects, the U.S. is well positioned to exploit these trends. America is without peer in launching the iconic global companies that deliver the essential building blocks: chipsets, network infrastructure, software, applications, and device design and integration.

Much of our leadership in this arena stems from America being the Internet’s birthplace. As we led the world in every relevant sector in the early days, we developed an ecosystem in which improvements in our networks drove improvements in applications, which drove improvements in devices, which in turn drove improvements in networks. This created a virtuous cycle that spawned the best human capital for innovating within what has become the broadband ecosystem.

But, future leadership is not assured. While American innovation in chipsets continues, our leadership in providing the underlying bandwidth that fuels this virtuous cycle is in trouble. While no single metric captures the situation fairly, two immediately jump out that suggest real and present danger ahead: a recent Cisco study ranks the U.S. 15th out of 72 countries regarding the quality and availability of broadband connections; and an Akamai study shows that of the 100 fastest cities in the world, only eight of them are in the U.S. — indeed, our fastest broadband city ranks no higher than 77th.

We looked at these trends several years ago while preparing the FCC’s National Broadband Plan and did not see a near-term problem. That is, Japan and Korea currently are not generating new goods and services with their faster networks. Over time, however, that is likely to change, and that is where the danger lies.

With big bandwidth as the driver of innovation and commerce, and with the development of huge bandwidth hogs — such as new medical techniques in genetic research — removing bandwidth as a barrier to innovation and real-time, high-performance collaboration will be critical to America’s ability to maintain economic leadership in numerous strategic sectors. When that day comes, ranking 15th and having none of our cities in the top 50 will place our economy at a significant disadvantage. Worse, by the time we recognize that day has arrived, we will be too far behind to catch up.

So what do we do? We can’t duplicate the breadth of speeds of Korea or Japan. Differences in density and in historic market structure make their paths impractical for the U.S. And we can’t blame our incumbent communications providers, as they are a reflection of our current consumer preferences.

Rather, we need a sober assessment of our challenge, which requires us to consider three fundamental principles.

First, bandwidth is a strategic input and our ecosystem must deliver the right level of bandwidth to the right device for the right application in a timely manner. Twenty-five years ago, both the farmer and the doctor in rural America needed the same thing: a dial tone. And the policy of the time delivered it. Today, the farmer needs greater mobile connectivity, as he drives a great deal and often is outside, and the doctor needs greater fixed connectivity to examine an MRI with experts at a university hospital far away. We need policies that recognize that diversity of needs and help deliver bandwidth to the innovations that are the fulcrum for economic growth.

Second, while the total benefits of a new or upgraded network accrue to the network owner, to the community where the network is located, and to third-party applications, devices and content providers, the only benefits that matter to those investing in networks in the U.S. are those that go to the network owner. If that entity’s investment equation shows that costs will exceed benefits, there will not be an upgrade or new network.

Lastly, while we are unlikely to have world-leading bandwidth in any of our communities without a change in that equation, there is a way forward. Every new or upgraded network we have enjoyed resulted from some change — generally in policy but sometimes in technology — that has reversed the equation through some combination of lowered investment and risk, and increased revenues or competitive threats. For example, cable television started to really take off when cities granted them monopolies (reducing risk) and the federal government gave them preferential access to utility poles (reducing costs) and broadcast programming (raising revenues.) Similarly, investment in new wireless networks occurred when new spectrum became available (lowering costs), and the federal government lowered access charges (effectively raising revenues) and increased the number of competitors.

Armed with such knowledge, 37 leading research universities and their communities responded to the bandwidth challenge by forming Gig.U in the summer of 2011, with the sole mission to accelerate that deployment of next-generation networks and services. The Gig.U strategy will utilize university communities as test-beds for these deployments, understanding that such communities historically have had the most favorable economics and the most favorable culture for broadband network innovation. Our tactical approach is to work with everyone in the ecosystem to reverse the equation through local community action. We already have identified a multitude of ways that local communities can lower investment and risk, and increase revenues for private players willing to upgrade or build new networks — without budget outlays from the local government.

If we are successful, we will take a major step forward in providing America a strategic broadband advantage.

We are not alone in this mission. Hawaii Gov. Neil Abercrombie, Illinois Gov. Pat Quinn and Ohio Gov. John Kasich all recently have taken steps designed to provide their states a strategic bandwidth advantage, and other states will follow. Meanwhile, Seattle recently offered access to the city’s dark fiber to private entities willing to invest in the buildout of ultra-high-speed bandwidth zones in the city. And both Kansas Cities have taken steps with Google’s Fiber project designed to improve that region’s prospects.

Some efforts will succeed; others will fail. But if we are thoughtful, if we learn from our mistakes, if we provide that strategic bandwidth advantage for a critical mass of our best and most ambitious innovators — our young people — our country will continue to lead the world in delivering the most promising products and services for a knowledge-based economy.

Blair Levin is the executive director of Gig.U. He became a Communications & Society Fellow with the Aspen Institute Communications and Society Program on May 2010, following his departure from the FCC, where he served as the executive director of the Omnibus Broadband Initiative.

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