Funding models for community-based internet service providers

Brazil still has a wide digital divide: more than 30% of households are not connected to the internet. According to a recent research study, the lack of experience in using technology and the high prices imposed by companies are amongst the main reasons why households are disconnected. Most of those with no access live in the countryside – less than half of households in rural areas are connected – or in low-income neighbourhoods in places that are of no interest to the main commercial internet service providers (ISPs). Connections would come at a premium cost, as maintenance and installation costs are much higher for remote localities – and these are exactly the clients who cannot afford premium service.

On the contrary, people need cheap, not-for-profit connectivity suited to their needs and financial possibilities. As in many countries, there are few companies in Brazil providing access to telecommunication, in contrast to the precarious conditions of autonomous initiatives or local-based ISPs. The scenario changes dramatically within different regions – from wide uninhabited stretches of the Amazon, hundreds of kilometres to the nearest point with electricity, to the overcrowded slums in big cities.

In an effort to counter this situation, Coolab was founded at the beginning of 2017 as a cooperative/laboratory to provide support, capacity building and financing for community telecommunications infrastructure. Considering that both analogue and digital technologies share the potential of empowering hard-to-reach communities, our research focuses on the development of multiple models of community networks that can be experienced through ethnic, experimental and social uses.

What are the values most important for given communities? What would be considered a fair fee? What culture will be experienced online – their own music and language? Or will all neighbours indulge in Instagram? Coolab members believe that connecting people should be understood as a need to improve local production and to provide global/local communication as a fundamental human right.

Improving our digital autonomy, reducing the risks of surveillance and the concentration of power in cyberspace, demand conversations about infrastructure and financing models. At Coolab, we believe in and work actively with free software and open source knowledge to achieve it. Software, knowledge and spectrum should be regarded as a common resource. In this sense, we also advocate for a “free spectrum” paradigm regarding spectrum management policies. In this article, we will describe and evaluate different funding models for community-based ISPs.

External funding model

The members of Coolab have been working on projects and initiatives related to autonomous telecommunication infrastructures, mesh networks and movements like free/community radio for a long time. We used to deploy networks using grants offered by NGOs and international foundations or research grants from universities. In cases like these, after presenting the idea to the local community, someone would gather together a group to write a project proposal and look for funds in order to buy the equipment and other resources needed. After the installation was done, the community would take care of the network on their own.

In 2015, the rural hacklab Nuvem obtained a grant from Commotion to create a Wi-Fi mesh and GSM network in the community of Fumaça, in the state of Rio de Janeiro, with about 1,000 inhabitants. This is a very relevant case, since it laid the ground for what would become Coolab's methodology, combining a week-long immersion of visiting volunteers to start the process with a barn-raising activity within the community. But the financing provided no method for the sustainability of the network: the grant funds were used to provide the community with a cost-free internet, with no conditions except for an agreement that they should do their own maintenance as and when needed later.

Beyond Nuvem, other projects in which the Coolab team was involved were the local networks and intranets installed in Casa dos Meninos (São Paulo, 2016); community-based ISPs in Campos city (Rio de Janeiro, 2008-present), the Kalunga Afro-Brazilian community (Goiás, 2017-present), and the use of digital radio to broadcast data using short waves in the Amazon rainforest (2016-present).

This model (fully supported by one funder) had some advantages, but we also faced some problems. On the one hand, it is easier and cheaper for the community because people can receive all financial and technical support from an external group. In these cases, there is no hesitation from the community to embrace the project, since there is no financial commitment. Hence the process happens in a very fast and straightforward manner, and sometimes it will be the only option for extremely poor neighbourhoods or villages. It dramatically reduces costs, especially at the beginning of the project, a step where expenditure on equipment is concentrated, for instance. As mentioned before, this is a very important factor, since our focus is to work mainly with low-income communities.

But in the long run, these communities are left on their own with no system in place to collect the much-needed funds to eventually replace equipment, pay an expert for maintenance, or even cope with a sudden increase in the backhaul costs. They become dependent on external supporters or fundraising. The long-term sustainability can be compromised, especially if the local organisation or key persons aren't engaged or don't have enough resources not only to keep the infrastructure running but also to provide good interfaces (physical and digital) to end-users.

That is the reason that led Coolab to define itself as a laboratory, to experiment with other models of network sustainability. We believe that there is always a network that can be built with the resources a community can afford. Therefore, from the very beginning, we provide a platform for the community to collect monthly micro funds from their users. And although we finance the acquisition of the equipment and the immersion costs, these must be paid back – even if it takes years – so that we can make new installations in more places.

The model of the self-sustainable and circular economy for communities

We started officially as a group at the beginning of 2017, boosted by winning the award for the "most novel" initiative in the Mozilla Equal Rating Innovation Challenge. The prize made it possible for us to issue a public open call directed to communities in need of connectivity, and we received more than 50 submissions from all regions of the Brazilian territory.

Those submissions were made by NGOs, residents’ associations and other initiatives that could work as “anchor tenants” for our efforts in the communities. Amongst these, five were selected to start building community-owned and managed networks. We took equipment and spent the time to experiment with a methodology that could count on the commitment of the community leaders and engaged with the wider community, such as governmental and non-governmental organisations, universities, schools and independent researchers. A partnership with the Rosa Luxemburg Foundation, for instance, allowed us to create two more networks.

Finally, our technical visit for the installation process would take the form of a week-long immersion in which the neighbourhood is invited to participate in the learning experience and assumes the responsibility for building autonomous self-maintained communications. Our first goal was to establish self-managed telecommunications infrastructures. In some cases, this meant that locals who used to have to walk several kilometres to send a message could now do it from their homes; in another place, a group of young people became so involved with the idea of community networks that they were able to replicate the process in a nearby village.

We're currently supporting seven different networks in four different states of Brazil. The estimated cost depends on many factors, like the topology, social aspects of each territory or even the US dollar exchange rate. But usually it doesn't go beyond USD 8,000.

In Monteiro Lobato, for instance, we are seeing a growing interest from people in how the communication technologies work since the plans to create a community-owned network started. Some people asked to join the network we're supporting, while others started a massive campaign demanding better services from the private ISP currently operating there. Some of them also bought their own antennas to share with their relatives or neighbours. After that, the company reduced the prices of the plans available in this region of São Paulo and installed optical-fibre infrastructure in order to avoid the migration of its users.

This fact strengthened ties in the group dedicated to deploying a community-based network. They realised that the main reason was not actually the lower cost, but to create their own service with a local workforce or to acquire more knowledge about how the internet works. This interest was very common among youths: some of them who were involved with drug dealing in the past are now working to provide maintenance for the community network.

Recently, the local association that manages the network created a technical council aimed at offering workshops and deliberate over technical decisions regarding the community provider. To fight back against some rumours about the initiative, a women’s group created interactive posters to invite people to regular meetings and published a zine about how the internet works.

Reassessing the way forward

After a year and a half since Coolab was founded, we are evaluating this first cycle in order to identify some of the main challenges and advantages of our model. Even though we are very far from completely mapping the digital divide in Brazil, we've realized that the "open call" is a good way to understand where people are organised enough to try to start a process of telecom infrastructure self-development. So we decided to keep it open permanently, which means that communities can subscribe to Coolab’s "waiting list" any time, and we get in touch when we have the funds or partners needed to attend to their request.

The workshop as a collective immersion was a methodology imported from our previous experiences and has been proving to be an important approach to create closer ties with the community, understanding not only their limitations but also their potential. Many times, the main challenge here is to break the mindset of NGOs as "service providers". The goal of immersion is to create spaces for learning by doing, and not to provide ready-made solutions for passive customers. So the engagement of the local population is fundamental to the success of our initiative, since they'll be responsible for the network management. In this sense, from our experience, it's harder to achieve this in communities where there is some kind of connectivity (even if it's awful) than places without any kind of alternative.

Closing the "deal" with the community, even if they applied for the installation, is not always straightforward. Culturally, the term "loan" is something people don’t feel comfortable with: low-income citizens in Brazil are known to be very responsible financially, and do not like to assume debts. The deal we offer may sound like creating a debt for the whole village, which creates resistance. Now we are trying to promote a commitment that is more about engagement than about finances.

The one-week immersion usually is not enough for community members to feel confident as network technologists. Many times we ended up staying a bit longer. But in the next experiences, we plan to pay one of the community members for a year, so that he or she can continue to build capacity while being responsible for maintaining the system.

We have also faced some technical issues, especially regarding the billing system. It turned out that there is a very popular app that is meant to bypass the control systems of mobile phone companies by using VPNs. Almost all of our users access the internet through their phones, so some of the neighbours started to use this app to hack the voucher system in the community network.

This group is composed mainly of low-income young people. Even without financial resources or internet connectivity, they have a smartphone and a lot of free time available (neither studying or working). Maybe they don't know they're compromising the network's sustainability by bypassing our billing portal. Maybe they didn't understand the proposal. While we try to work on technical solutions and improve our dialogue with them, we also understand that it's part of a bigger problem, since a number of big oligopolies create a scarcity scenario and exploit underprivileged users. The dissemination of this kind of app can be viewed as a reaction to this fact and points to a bigger picture of social inequality.

It doesn't happen in every community, and most of the time it is just a minority, but it can jeopardise the ability to raise funds. We have already identified ways to close these holes technically. However, since Coolab has no funding for research and development, the deployment of new solutions depends on our volunteers, and that can take a long time.

The main problem we've faced is the fact that the payback planned hasn't happened yet. We've found that our target communities can only afford very small overheads and that it will take much longer before we can have the financial return from the first experiences. The most advanced installations and ISPs deployed with Coolab support are the ones fully funded by some financer. Considering these challenges, we are now rethinking our methodology in order to face these issues.

We still believe that communities would be able to pay the investment back, particularly if we adopt a contractual model and support local solidarity economy and creative economy initiatives. Moving forward from our previous experiences, we are seeking a grant to cover another five communities, where the model of repayment would be improved and open to further funding from partners that support the creation of networks through straight, non-recoverable grants. We are convinced that match funding and solidarity economy tools can make the implementation of the infrastructure viable and sustainable. We also continue to look for partnerships with educational institutions, governments and NGOs that can act as partners or sponsors.