This article was originally published by Intermedia.
Local, ground-up models are increasingly emerging as a powerful solution to digital inclusivity. In the first of a two-part article, Michael Jensen and Adriana Labardini explore the value of community networks and the policies needed for them to thrive.
John Stuart Mill first posited the notion that utility networks had unique economies of scale, and that this justified a natural monopoly. That argument was embraced and extended by privatised telecommunications incumbents in the twentieth century. Regulation was shaped that embedded this uncontested assumption, with a profound impact not only on competition but on social welfare as well. [1] For decades, the ‘digital divide’ grew wider in the telephone network arena, and then extended to the internet as large-scale operators left rural, remote and low income communities behind, claiming that higher fixed costs and low revenue levels per user made them unprofitable to investors. Mandatory rural coverage obligations attached to a licence also proved challenging to enforce and often ended in reduced coverage or limited service in rural areas, even with a state subsidy.
Why community-centred connectivity matters
Increasing numbers of unserved communities in different countries have thus taken the lead in determining their own digital future; that is, to better communicate and connect with the world on their own terms. Many of these community-centred connectivity (CCC) initiatives are being implemented in ways that reflect the kind of capacities, resources, principles and governance structures that are more appropriate to the needs and values of the community. Such leadership and innovation, driven by the necessity to connect to the internet (and reinforced by the Covid-19 pandemic) has created new possibilities, momentum and a sense of urgency for small communities long left behind by the market and government. [2]
As a result, the emergence of new actors, technologies, ownership models, sustainability strategies and paradigms has accelerated over the last few years. [3] There is increasing recognition that small and large network operators can coexist. In fact, they can be complementary, each serving different layers of the economy. As the noted economic historian Fernand Braudel [4] observed decades ago when documenting subsistence economies, local actors, such as cooperatives, nonprofits and social entrepreneurs, can serve a community more efficiently than a national or global corporation with high capital and operating expenses and expectations of investment returns from shareholders that are disconnected from the communities served.
Community-centred connectivity and communications services therefore fulfil an essential role in the 21st century digital information society. Local, small-scale economic models create value for the whole of society through sustainable connectivity, a circular economy, pluralism, and preservation of cultures, languages and biodiversity as well as the use of clean energy technologies.
Local actors, such as cooperatives, nonprofits and social entrepreneurs, can serve a community more efficiently than a national or global corporation with high capital and operating expenses and expectations of investment returns from shareholders that are disconnected from the communities served
As economist Mariana Mazzucato wrote recently, ‘the myth that only the private sector creates value obscures the role of workers, communities and the state in driving innovation…’. [5] In this respect, the role of the state is as an enabler of an expanded universe of private and social players. This presents opportunities for regulators, policymakers and the financial community to act differently, even disruptively, in addressing the lack of meaningful access to the internet. In turn this will bring benefits in terms of education, healthcare, financial inclusion and sustainable local livelihoods.
A brief history of bridging the digital divide
As far back as 1982 the International Telecommunication Union (ITU) first acknowledged what came to be called the ‘digital divide’ in rural and remote areas, where millions of people lacked access to basic telephony. [6] In subsequent decades this inequality extended to broadband access. By 2005, at the first World Summit on the Information Society (WSIS), there was an explicit intention to narrow the digital divide by including a vision of ‘a people-centred, inclusive and development-oriented information society, that could not be left solely to traditional telecommunication incumbents to solve’. [7] The absence of a business case for rural connectivity from private sector operators emphasised the need for different models and regulatory interventions, as well as public and social impact investment to narrow the gap.
Comunicación Redes, a community project in Mexico
International and national public funding deficits, [8] along with the reticence of private investors to expand to less profitable areas, have gradually opened up a dialogue on finding more innovative models for connecting unconnected communities. Although it has taken some years for the international community to recognise this trend, the debate has begun to shift the focus away from the globalisation remedy to one of localism through small-scale bottom-up models. In 2019 the UN Economic and Social Council recognised community networks in its resolution on the ‘Assessment of the progress made in the implementation of and follow-up to the outcomes of the WSIS’. [9] Similarly the ITU’s resolution 37, adopted at the World Telecommunication Development Conference of 2022 in Kigali, explicitly cites ‘complementary networks’ as a solution to bridging the digital divide. [10] This resolution came 12 years after Recommendation ITU-D 19 on telecommunications for rural and remote areas which proposed that developing countries should, among other actions:
- Include provision of telecommunications/information and communications technologies (ICTs) in rural and remote areas in national development plans;
- In planning infrastructure development in rural and remote areas, assess all available technologies, taking into consideration the regulatory environment, geographical conditions, climate, costs (capital expenditure and operational expenditure), maintainability, operability, sustainability, etc. based on the results of the site survey;
- Recognise that community access to ICT facilities and services is particularly important in rural and remote areas; business models which can achieve financial and operational sustainability can be operated by local entrepreneurs supported by a variety of initiatives. These facilities, where necessary, should also be supported by universal service funds (USFs) as an essential component of rural communications;
- Ensure that local institutions, such as village committees, are involved in planning and implementing ICT facilities.
The Organisation for Economic Operation and Development has also recognised community networks and access to local spectrum for unserved communities in several reports and policy briefs, [11] as has the OAS (Organization of Americas States) in a general assembly resolution which invites states to ‘incentivize participation of small operators and community operators to serve unconnected areas, through special licensing frameworks, access to essential facilities and to promote social programs for network coverage’. [12]
At the national level, community networks have now been recognised in the legal and regulatory frameworks of Mexico, Argentina, Brazil, Ecuador, Colombia (communities of connectivity), Uganda and Kenya. Mexico has introduced special spectrum and not-for-profit service licences which are free of charge for community and indigenous networks. Argentina also features a simplified community internet access registration procedure and, until 2023, allocated a small proportion of its USF to rural and peri-urban networks. [13] Kenya has created a simplified licence framework for CCCs and is evaluating allocating a portion of its USF for these initiatives. Yet, many other nations of the global south have not implemented any of the ITU/CITEL [14] recommendations to enable small, local collectives to provide connectivity from within. As a result, the digital divide is not ebbing in these countries.
Bridging the digital divide with innovative policies and regulation
Twenty years after the 2005 WSIS highlighted the connectivity disparity, we are still discussing how to address the issue and struggling to bridge it permanently and for all. Fortunately, we now have more tools and possibilities to trigger digital abundance and inclusion, but specific policy and regulatory measures are still necessary to close the digital access gaps because the current one-size-fits-all approach stifles new local initiatives. As basic as it may sound, regulators and legislators seldom ask themselves: ‘What will our proposed rules solve or remedy? What could be their unintended negative effects? Do they foster inclusion?’
In addition, the rapid pace of digital innovation is such that policymakers and regulators are perennially playing catch-up in addressing the adoption of new technologies. Thus, it is vital for them to consider the context, time and market structure in which policies and regulations were issued and determine if they are no longer fit for purpose or justifiable. Most regulations were built on the assumption that only two or three national operators could provide services efficiently due to economies of scale. Regulations were designed to harness their market power and to manage competition between them. National spectrum licences were awarded for 20 to 30 years on an exclusive basis regardless of whether the licensee is using the spectrum nationally or not. (Resources from USFs have traditionally been allocated to operators and equipment providers. [15]
Technology, innovation and mass-scale manufacturing have dramatically reduced the cost of providing connectivity. Governments therefore need to consider changing regulations, procedures or requirements that are no longer adequate to promote meaningful connectivity or that are creating barriers to digital inclusion in the economy. The key question is to assess whether the legacy regulatory framework serves the public interest or not.
In most cases, licensing restrictions, burdensome compliance requirements, high spectrum and licence fees and spectrum management policies, mostly designed for a few large-scale players, are all entry barriers for smaller operators. Mandatory spectrum auction processes are often adopted even where there is no scarcity of spectrum and where there is no appetite to deploy wireless networks by large operators at all. [16] Many states in the global south have been diverted from attention to these critical basic connectivity issues by the much more fashionable topic of how to promote artificial intelligence in the developing world, ostensibly to put an end to social and economic problems. This time, though, leapfrogging will not do the job without universal, high-speed and robust connectivity infrastructure.
A different path to digital inclusion
Excluded communities face many economic, socio-political and security challenges which make equality and wellbeing harder to achieve. Threats from climate change, political unrest, war and crime often force them to migrate. Communications and broadband are a key to mitigating hardship and reducing rural-urban migration. They are vital for local economies, emergency management, education and healthcare. Of course, it is not only affordable access that is needed. Digital skills, relevant local content and affordable devices are all essential too.
Given the structural discrimination faced by people in many rural and remote areas, especially indigenous and tribal communities, affirmative actions are required to address inequality and lack of access. [17] Indigenous and tribal communities have been especially affected by discrimination and displacement in the Americas, mainly due to racism, mineral, oil and lumber extractivism in their territories , violence and lack of communications. With the right enabling frameworks these communities can develop their own means of communication, in their own territories. Under the right to autonomy in Convention 169 of the International Labor Organisation, communities are entitled to self-determination and can put their traditional knowledge, creativity and entrepreneurship to work on their own communications networks, if the enabling policies are put in place. [18] In the mountains of Oaxaca, Mexico, several indigenous villages got together a decade ago to start a wireless, 2G network using the 850 MHz band. The Mexican constitutional amendment of 2013 and the 2014 Telecommunications and Broadcasting Act [19] enabled indigenous peoples to access spectrum in rural villages on a non-profit basis for 15 years for community networks and media. More recently, the Māori people of New Zealand finally had legal recognition of ‘spectrum sovereignty’ in their 2013 territory amendment and the government allocated a portion of the 3.5 GHz band to be put in a trust for them to manage. Supporting local entrepreneurs, cooperatives and community-centred initiatives is a more sustainable and effective approach. We turn to this in more detail next.
The second part of this article will be published in the December issue of Intermedia.
Michael Jensen is technology adoption coordinator in the Local Networks (LocNet) initiative, a collective effort led by APC and Rhizomatica in partnership with grassroots communities and support organisations in Africa, Asia and Latin America and the Caribbean.
Adriana Labardini is policy coordinator for Latin America and the Caribbean for the Local Networks (LocNet) initiative. She is an IIC member and director, and a former commissioner at the Federal Telecommunications Institute (IFT).
[1] Bourdeau de Fontenay A, Liebenau J and Savin B (2005). A New View of Scale and Scope in the Telecommunications Industry: Implications for Competition and Innovation. Communications & Strategies, 60(4), p85. John Stuart Mill, in Chapter IX of the first book of his Principles of Political Economy, referring to the work of Charles Babbage (On the Economy of Machinery and Manufactures), widely analyses the relationships between increasing returns and scale of production inside the production unit.
[2] Rajan R (2019). The Third Pillar: how markets and the state leave the community behind. Penguin Press.
[3] Forster J, Matranga B and Nagendra A (2022). Financing mechanisms for locally owned internet infrastructure. APC, Connect Humanity, Connectivity Capital and the Internet Society, 22 September. bit.ly/3ZiB38r
[4] Braudel F (1979). The Perspective of the World. Civilization and Capitalism, 15th-18th Century Volume 3. Armand Colin. p143.
[5] Mazzucato M (2024). Collective Intelligence and the Common Good. Project Syndicate, 5 August. bit.ly/3MFe3ZF
[6] Maitland D (1985). The Missing Link: Report of the Independent Commission for World Wide Telecommunications Development (known commonly as ‘The Maitland Report’). bit.ly/3MLzf0f
[7] For a more detailed history of the international strategies, models and action plans to bridge the digital divide since 1982, see: Rey-Moreno C, Greene L and Jensen M (2024). WSIS+20: Reimagining horizons of dignity, equity and justice for our digital future. Global Information Society Watch 2024 Special Edition. pp52-62. bit.ly/4ejSsBB
[8] Universal Service Funds have had very limited success in addressing the divide in developing countries. See, for example, the ITU report, Universal Service Fund and Digital Inclusion for All. bit.ly/47jEdui
[9] Resolution adopted by the UN Economic and Social Council on 7 June 2023. bit.ly/3Tpx2uV
[10] Resolution 37 instructs the Director of the Bureau to ‘continue supporting Member States, where requested, in developing policy and regulatory frameworks that could expand and support the engagement of telecommunication/ICT complementary access networks and solutions in bridging the digital divide.’
[11] See the following OECD reports: Developments in Spectrum Management for Communication Services, 2022 at bit.ly/3XyyX2N and Building Better Societies Through Digital Policy, 2022, p11. bit.ly/3XNeh7z. Also the executive summary of Rural Policy Review of Colombia 2022. bit.ly/4cX9WTn
[12] OAS, General Assembly Resolution 2966, Rev.1: Resoluciones De La Asamblea General De La OEA de Interés para la Citel
[13] Roberto Arias’ and Barrios Populares’ funding programmes were dismantled by the current Miléi administration in 2024.
[14] Inter-American Telecommunication Commission.
[15] ITU (2021). Financing universal access to digital technologies and services. bit.ly/3TtcUrS
[16] In Colombia and Guatemala it is argued that any spectrum allocation to the private sector (communities included) requires a competitive bidding process, assuming there is always more than one bidder interested in using spectrum for mobile services in a given rural area.
[17] Inter-American Court of Human Rights (2019). ‘Pueblos Mayas Kaqchikel de Sumpango and others. v. The State of Guatemala’. Final ruling. Mayan communities were de facto prevented from accessing spectrum frequencies for community radios and were prosecuted criminally if they used the spectrum unless they bid for an FM frequency in an auction (something which is totally unfeasible). The court ruled in favour of the plaintiff communities, mandating the state to repair damages, allow use of frequencies and approve a legal framework, withheld for more than two decades, that enables affordable spectrum allocation for these and similar communities outside an auction system. bit.ly/3MC6B1t
[18] See International Labour Organization (1989). Indigenous and Tribal Peoples Convention. bit.ly/3XMzX3B
[19] Section 28 of the Mexican Constitution. bit.ly/3XJTTEc and sections 67-IV, 76-IV, 83, 85, 87 of the Telecommunications and Broadcasting Act. bit.ly/3MQFdwN