The solution for this problem is relatively simple. Satellites should be put in very low orbits. A satellite collision in high orbit is practically irreversible and will pollute space essentially forever. A satellite collision in low orbit is automatically cleaned up by the atmosphere, over a period of years to months to days depending on the orbit height.
In the past it was not practical to put satellites in low orbit for several reasons. One, because the same atmospheric drag that cleans up debris would pull the satellites out of orbit too, severely limiting their useful life. Two, because a satellite in low orbit can only see a small part of the Earth's surface at once and passes over it very quickly. You can't use stationary satellite dishes to communicate with such satellites, and establishing continuous coverage over any part of the Earth's surface would require hundreds or thousands of satellites.
Two things have happened that changed the game. One, phased array antennas are now cheap enough for consumer applications and they are able to communicate with multiple fast-moving satellites at once without physically pointing at them. Two, SpaceX has decreased launch costs to the point where it is now feasible to launch thousands of cheap satellites instead of dozens of expensive satellites, and replace them all within a few years instead of expecting them to last for decades. Starlink satellites orbit at 550km where debris lasts only a few years before automatically being cleaned up by the atmosphere. Future generations may orbit even lower where debris is cleaned up even quicker.
The non-SpaceX proposals for large constellations mostly chose higher orbits. I think it's time to prohibit this. Starlink competitor OneWeb just had a satellite failure at 1200km and that dead satellite will pollute orbit for centuries if it is not retrieved (and there is no realistic plan to do so, nor proper incentives to ensure that it happens). Heaven forbid that it collide with something and produce an ever-expanding debris cloud that can never be fully cleaned up in our lifetimes. Meanwhile, Starlink has had tens of failed satellites and they are all deorbited already or well on their way.
It just doesn't make sense to do things the "old space" way with a small number of expensive high orbit satellites. Low orbit cheap satellites are the future.