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Photo: Nyani Quarmyne for the Internet Society (ISOC)

“The digital divide is not a problem the market alone will solve; we need to think differently to really expedite its closure.” The quote from lawyer Adriana Labardini, the Latin American policy and regulation coordinator for the Local Networks initiative, laid the issue out clearly during the most recent Internet Governance Forum (IGF). “Underserved communities can build their own infrastructure and take control of their digital futures, promote circular economies and empower themselves,” she added.

Experiences of community-centred connectivity around the world have been proving her point, such as those featured in the first season of the Routing for Communities podcast. In its first episode, for instance, we learn more about how the Mamaila Community Network, from South Africa, has connected over 3,000 devices since its official launch in March 2022. There, the community can connect via Wi-Fi by purchasing vouchers that give users access to the internet for a limited time, and for a price that is approximately a third of that charged by commercial operators. 

In a different episode we hear from Chris Conder, one of the founders of Broadband for the Rural North (B4RN) – an award-winning, non-profit community network established in a rural farming area of Northern England in 2011.  “We've done it and we've done it really, really well. And it works and it's viable and it's economical and it's owned by the people. It's looked after by the people,” exults Conder in the above-mentioned podcast. Built by the members of the community, the network has already connected over 7,000 homes to the internet and offers one gigabit per second (Gbps) and higher connections at significantly lower costs than commercial operators. According to the website, the average cost for broadband in the United Kingdom is around £0.86 per megabit per month (roughly USD1). B4RN’s official price is closer to £0.03 per megabit. 

Their journeys illustrate how community-centred connectivity alternatives are more than capable of offering reliable services at affordable costs and providing service in areas left behind by large telecommunications companies. 

B4RN, however, struggled to gain access to capital for their initial network development and originally was largely funded by individuals within the community who invested their own resources in the network through a community share investment scheme. It took many years of community mobilisation to overcome the challenges posed by the lack of supportive policy as well as regulation and financing opportunities.

Individual funding, however, is not always an option where communities may not be able to finance their own networks. The Mamaila Community Network, for instance, emerged to bridge the digital divide in a village affected by other inequalities such as water access, high unemployment rates and lack of sustainable and reliable energy sources. The initiative relied on the community members’ mobilisation and solidarity. During the process of consolidating the community network, they got support from other civil society organisations. 

Facing different realities, both B4RN and Mamaila had to overcome serious challenges to start and operate their networks. And they are not the only ones. Their journey also shows why rethinking financing for connectivity is an important step towards bridging the digital divides. “Typically, community-led networks get started with grants from civil society organisations, among other articulations, seeking resources to acquire equipment. But that doesn’t guarantee long-term sustainability,” explained Steve Song, a policy advisor with the Local Networks initiative, in the same podcast episode where we learn more about B4RN journey. “We actually need a multiplicity of business models and technologies to provide affordable access to all,” he added.

Currently there is a gap, and support from a range of stakeholders is needed in order to successfully support communities to bridge the digital divide. This was an important discussion in the last IGF that will continue this year, as we approach the WSIS+20 Forum High-Level. The milestone event, from 27 to 31 May 2024, will be a significant occasion to reflect on the implementation of the outcomes of the World Summit on the Information Society after 20 years. It was at WSIS where the foundations of exploring the role of other financial mechanisms outside of private financing to bridge the digital divide were laid out. 

Proposed solutions for financing challenges

Financing Mechanisms for Locally-Owned Internet Infrastructure, a report that came out in 2022, concluded that community-centred connectivity providers around the world face difficulties in accessing funds and financing. The report analyses a range of operating models and financing mechanisms that could enable the success of community connectivity providers, including community networks, cooperatives, municipal networks, and social enterprises.

The report provided evidence that, in many cases, community-centred connectivity alternatives can be better placed to offer more appropriate, affordable access solutions. Going beyond just addressing market failures in underserved regions, they see their primary goal as sustainably meeting the digital needs of local residents. This means they work for digital equity taking into consideration not only access, but also affordability, adoption and local priorities. Yet, evidence shows that these alternatives have historically struggled to access the capital they need and that there is only limited grant funding available, inhibiting the emergence and growth of community-led networks. Among the recommendations the publication proposes, is that governments should encourage investment through fiscal incentives, subsidies and technical assistance at the national level.

A concrete example of making public funding sources available for communities can be found in Argentina. Responding to a strong community networks movement, the Argentinian government developed state programmes in support of community-led models for connectivity in recent years – which included, for the first time, the use of the Universal Service Fund to finance these initiatives (find out more).

Universal service funds have been established by governments in many countries precisely with the intent of subsidising the roll-out of telecommunications services in underserved regions. Some policymakers and regulators, such as in Brazil and Kenya, have also been considering use resources from universal service fund to support community networks. But, for the large part, community-led initiatives remain unable to use universal service funds

Fostering multistakeholder support for communities 

Another recommendation is that other funders and commercial lenders should also support communities in bridging the digital divide. For these stakeholders, the report points out, there is need to unlock grants and sub-commercial capital for community-centred connectivity, in the form of blended capital that “can bring together philanthropic funding, impact investing, and commercial finance to create sustainable capital stacks that can enable the success of community connectivity providers.”  

Commercial lenders, however, often see community-centred connectivity providers as risky investments. Recognising the importance of community-centred connectivity at the policy level and an enabling regulatory environment could change this perception. The report suggests that there are several ways that governments, impact investors, philanthropic donors, multilateral institutions and others can help to de-risk community-centred connectivity initiatives so they can also access commercial funding sources.

There is some change underway in this direction. A recent review of community network regulation around the world by the Local Networks initiative co-manager Carlos Rey-Moreno points out the growing recognition for community networks at the international, regional and national level, highlighting the fact that various countries around the world have already created community network categories in their licensing frameworks.

Steve Song points out that reducing investment risks in community-led connectivity is a very low-risk decision for governments: "The sums required are modest compared to the resources required for large-scale operators. Yet the rewards are potentially significant, bringing not just affordable access but increased social participation and shared action at the community level.” Just as an example, the programmes established by the Argentinian regulator to support community networks represented 0.63% of the regulator Enacom’s 2020-2022 budget.

"Unlocking financing mechanisms for community-centred connectivity providers is a frontier area of work", one that requires attention by financiers, especially those focused on development finance, emphasise Carlos Rey-Moreno and others who recently co-authored a report about financial mechanisms topic for an upcoming special edition of the Global Information Society Watch (GISWatch), titled WSIS+20: Reclaiming a people-centred information society – Priorities for the global South. The chapter, which will be presented at the WSIS+20 high-level meeting in a session on 29 May 2024, will bring key recommendations to inform the WSIS +20 process as well as potentially other decision-making spaces.

Photo: Nyani Quarmyne for the Internet Society (ISOC). In it, Kgopotso Magoro, founder of the Mamaila Community Network, is on a ladder leading to the network’s tower on a hill above the village of Sephukubje in the Limpopo province of South Africa, on 15 February 2022. 
This article was reviewed by Carlos Rey-Moreno and Steve Song.