Executive Summary

Financing Mechanisms for Locally Owned Infrastructure

Report cover image

© AirJaldi / TooMuchWifi

© AirJaldi / TooMuchWifi

Since the pandemic, there’s been a growing appreciation of the economic and human costs of a world in which half the population lives without internet access and the tools needed to meaningfully participate in a digital society.

This has come with a new energy to close digital divides. But the discussions among policymakers, development experts, philanthropy, and corporations too often focus on how much money is needed and not enough on how money needs to be used differently.

We commissioned this report to help change the conversation. The second half of humanity will not be connected in the same way as the first — by large for-profit incumbent telecommunications companies. While these firms have connected billions of people in the last 25 years, they are meeting their limits. It is simply not in their business models to invest in low-income, often rural, communities that do not offer the profit margins they have come to expect. They have not and will not connect everyone. 

The digital divide is not a problem the market alone will solve. We need to do things differently. Globally there is a growing movement of community connectivity providers — including community networks, municipal networks, cooperatives, and social enterprises — connecting underserved communities, often at faster speeds and lower prices than incumbent providers.

These are the networks we need to promote, support, and invest in.

Yet, almost all of them struggle to access capital. This is a nascent movement and the financial tools and capital stacks have not yet matured to meet the needs of these networks and the communities they serve. We now need to cultivate the financial infrastructure that will allow community connectivity providers to grow and scale.

This report is designed to provide a foundation of understanding about what these providers look like, their various ownership and operating models, and how they can be financed sustainably. It is a practical tool for those who want to build networks and for funders and investors. The report’s 10 case studies show where and how community connectivity providers are already getting the job done and demonstrate how underserved communities can build their own internet infrastructure and take control of their digital futures.

We hope this report will help more communities to achieve digital equity, catalyze more funding for community connectivity providers, and accelerate access to the internet and digital tools so that everyone can fully participate in our digitalizing world.

Jochai Ben-Avie
Chief Executive, Connect Humanity

The report explores:

  • The state of global internet access and how community connectivity providers (CCPs) can expand broadband access
  • Options for network ownership and operating models, demonstrated with case studies of successful networks
  • Finance mechanisms to sustainably fund community connectivity providers
  • Recommendations for policymakers, funders, and network builders to support the ecosystem

Recommendations

gray and black lines

Photo by H Liu on Unsplash

Photo by H Liu on Unsplash

Governments and policymakers should:

1) Create an enabling regulatory environment that allows CCPs to operate cost-effectively.

2) Encourage investment through fiscal incentives, subsidies, and technical assistance.

Network builders should:

Prioritize cost-efficient deployments and diversify revenue streams with a focus on financial sustainability and self-reliance. Identify stage-appropriate sources of capital that fit their needs.

Funders should:

Unlock grant & sub-commercial capital to CCPs that are financially sustainable to generate significant social impact connecting unserved communities.

About

This content was created in partnership between the Association for Progressive Communications (APC), Connect Humanity, Connectivity Capital, and the Internet Society. To find out more and read the full report, visit connecthumanity.fund/report-financing-ccps

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