World Dialogue on Regulation

This research topic examines alternative models of network ownership, management and financing, with a particular focus on local participation and rural communities. It will look at a variety of ownership and control models, including cooperatives, SMEs, municipal government ownership, public-private partnerships and scenarios in which different entities own different parts of the network (i.e. private backbone and cooperative last mile). It will also look at changing technologies that are making local ownership and management possible and at policy and regulatory best (and worst) practices.

Despite the vast resources invested over the past decade, telecommunication networks and services have failed to effectively reach rural areas in developing countries, where sparse populations and low incomes mean that conventional approaches appear to be economically unattractive to market-driven or monopoly providers. Where networks do reach coverage does not mean access since poorer sections of the community often simply cannot afford to use them. Additionally, mobile telephony is only able to deliver a limited spectrum of applications and services. Attempts to address the problem by pooling demand in telecentres or cybercafés have had some success, but results to date are uneven and these centres often do not address the development needs of the poor.

This topic examines how innovative combinations of locally owned enterprises, new wireless and related technologies, and new or reconfigured financing mechanisms might have the potential to extend networks and offer new services to poor communities in rural areas. In combination with a number of positive regulatory trends and ideas, these could make a significant difference to both network access and services among poorer rural communities. They can drive down costs and make maximum use of community resources, enabling the emergence of a new business model that is economically sustainable and empowering. Furthermore, a high degree of community control can significantly enhance the viability and development impact of ‘hybrid’ public/private/community networks and service solutions.

Why community or local enterprises?

Certain advantages of a community ownership or management models have long been demonstrated in infrastructure projects, in both developed and developing countries. Whether in irrigation or water systems, local electricity plants or bridges, community ownership, control and participation usually means that infrastructure can better address community needs, that community resources such as manpower and public commons can be leveraged, that the community is willing to invest in them, that they are more highly valued, and that they are better maintained. The benefits of community ownership and participation in terms of empowerment have also been recognised and exploited to good effect.

There already exists a rich and ongoing history in rural telephony cooperatives, now moving into ISPs, broadband and wireless access. In the USA many of the thousands of cooperatives that first brought telephone service to rural areas in the first half of the last century are still in operation, now providing modern telecom services, including broadband access. More recently, rural telecom enterprises have appeared in countries as diverse as Argentina, Poland and Peru. Local authorities, in both developed and developing countries, have taken on a similar role with a wide variety of wireless schemes. Some of these have been highly successful in terms of price and quality and, more importantly, have been shown to contribute and often stimulate other development activities locally.

The role of technologies

Technological innovations are increasing the potential of these new models. New and emerging technologies, especially wireless, are particularly suited to the deployment of local network infrastructures because of their low level of initial investment, their scalability, their relatively simple technical deployment, their low-cost and open standards, and their adaptability to both voice and data requirements.

Financing

While locally-owned networks sometimes enjoy financial advantages such as free rights of way or inkind contributions from community members (labour, use of community-owned buildings, etc.), their small size and not-for-profit objectives can impede their access to credit sources available to traditional  operations. Large-scale infrastructure development loans of the type offered by the World Bank are not available to community-sized operations and cooperatives and non-profits sometimes face legal hurdles to borrowing or banking cultures that clash with the non-profit service-oriented objectives of community enterprises. Many of the successful models have been enabled by alternative financial arrangements. In the USA, where cooperatives were responsible for extending telephony to rural areas, the Department of Agriculture made start-up loans available. When traditional banks balked at providing loans in Argentina, cooperatives found allies in the country's well-developed network of credit unions. In Bangladesh it was the micro-credit Grameen Bank that financed the community-driven extension of GSM to rural Bangladesh. And in Peru community-owned networks were able to able to tap into universal access funds.

Regulation

Regulatory obstacles have long been the major barrier to progress in many areas of ICT development. But there is some evidence that the mood in governance is changing. Single formula solutions are no longer supportable and principles such as technology neutrality, ‘open access’ to backbone infrastructure, and a ‘public good’ rationale in certain ICT network components are beginning to be heard, for instance in the context of the WSIS preparatory meetings and in a number of developing countries. A layered approach to network development, each with potentially a different set of regulatory and ownership possibilities, is emerging. Alongside private or public ownership, partnerships, local authorities, SMEs and indeed communities are seen as having a role to play.

All this could open the door to a powerful local level dynamic in a variety of directions, including telecommunication cooperatives, entrepreneur-led micro-networks, municipal government networks, public-private partnerships and scenarios in which different entities own different parts of the network (e.g. private ownership of the backbone and a cooperative last mile).

Resources

A wide variety of resources will be gathered to support this area of research, including:

• case studies of existing models and links to their websites;
• examples of policy and regulation that facilitate or hinder the development of locally-owned networks;
• information on emerging technologies and applications;
• relevant research and publications – both online and in print.

Research projects

Research projects under this topic include a study on micro-telcos in Latin America and the Caribbean (conducted by Hernan Galperin and Bruce Girard within the Latin American research network, DIRSI), work on community-based networks and innovative technologies (conducted by Seán Ó Siochrú and Bruce Girard in association with UNDP), and a study on alternative networks in Ghana (conducted by Godfred Frempong, Anders Henten and Morten Falch of the Center for Information and Communication Technology at the Technical University of Denmark).