Advancing Community Connectivity > Financing: Sustainable Pathways to Affordable Access
Financing: Sustainable Pathways to Affordable Access
Explore funding strategies for community networks and local ISPs. Learn how to navigate financial sustainability, regulatory inclusion, and innovative financing beyond Universal Service and Access Funds.
To get started, networks need money for administrative, regulatory, and equipment costs. Then, to continue operating, they need money to maintain and upgrade systems, and to serve customers, including collecting payments. They need to be financially sustainable, even if they don’t plan to turn a profit. It’s important to shape a regulatory environment that explicitly includes them, rather than replicating the conditions that enabled the market failures in the first place. But there are a range of opportunities for addressing these different financing challenges, well beyond Universal Service and Access Funds.
Keeping the Network On for the Long Haul
Whether it’s a community network, municipal network, or a small ISP, a community-led project needs a plan to bring in revenue, even if it’s entirely volunteer-run and doesn’t seek a profit. They’ll need to maintain and upgrade equipment. They’ll need customer support, billing, and payment systems in place, as well as web services like email and management tools. Some networks use an entrepreneurial franchise model, take in investment, or even use something like an Internet café, where users only pay for food, drink, and other services such as printing.
Improving the policy landscape for small businesses, including offering business training for community-led networks, can help these important initiatives succeed over the long term.
Works Best When: A successful approach is one that recognizes that communities often have solutions of their own, that are unique to them. Don’t be afraid to build on what’s already working.
Obstacles Can Arise if: There’s often a lot of volunteer energy around the start of a project. Ensure that early spirit doesn’t turn to resentment if some people end up doing a lot of work when they’d prefer to be paid.
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Lowering Financial Barriers to Entry
Financing mechanisms for local connectivity will vary between countries, often even between regions or local areas. Opportunities to improve access range from standard business financing and credit union loans, to more telecommunications-specific updates, such as simplified licensing or streamlined reporting for administrative and grant processes. It can also involve voucher schemes, fee exemptions for importing equipment, quality-assured technical help for feasibility studies, and installation grants. Larger grants can also work, delivered in tranches that are released based on milestones.
But there’s no one-size-fits all solution. The key is to recognize all the assets, even unconventional ones, that a community already has, and start there.
Works Best When: A community-led project will always be more successful when it’s led by and for the people who know the needs and capacity of the people and area.
Obstacles Can Arise if: Even though startup costs can involve donations and grants, and a community network might not charge end users for access, this needs to be set up with financial sustainability in mind.
Universal Service and Access Funds
Most countries have a fund that comes from a percentage of profits earned by large telecommunications incumbents. This can be used to fund universal access to the Internet, but access to the money to do that can be difficult. It often ends up unused, or it’s dedicated to a different, non-Internet purpose.
Policies need to be in place so that there are mechanisms to invest those funds in smaller players and initiatives. This can include administrative aspects, such as having a standard application process for funds, or adding requirements, such as an obligation to connect an unconnected area with the same quality of service as is being offered to a more profitable one.
Works Best When: These funds are available for all types of solutions that have recognition, and can include community-led solutions.
Obstacles Can Arise if: If only large-scale operators can access these funds, it can be more difficult for groups or communities who are looking to set up something like a small community network.
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