Summary

The Development Opportunity and the Challenge

Where communication facilities are available, the poor rapidly embrace them. Where schools offer courses in ICT or use ICT to make educational content more interesting, parents are often supportive since they see it as a source of upward mobility and recognise its potential to ensure more effective learning. Where ICT makes available critical information, financial services, and reduces the maze of bureaucracy, people benefit in terms of reduced time and resources that need to be expended. Where ICT facilitates access to information about new economic opportunities and helps avail of them, small and medium sized enterprises and cooperatives demonstrate interest. Where ICT access is available, it helps to stimulate investment. But it is not just a question of facilitating economic and social development, community radio and related technologies are, for example, also proving useful in facilitating participation and strengthening the voice of communities.  

In many instances, at least in urban areas, the communication needs of the poor are acknowledged and telephony markets – formal and informal – are emerging to serve them. However, rural areas and sparsely populated communities still tend to be underserved. The main obstacle is simple. Installation costs are often higher because of lack of developed infrastructure such as roads and electricity. Sparser populations and low levels of income mean that conventional approaches appear to be economically unattractive, whether for market-driven or more traditional public sector providers who are now unable to benefit from cross-subsidies to roll-out services. In some countries, universal access funds (UAFs) are being used to provide targeted subsidies to encourage the provision of mainly telecommunications services by private operators in areas considered to be otherwise uneconomic. But these are still an evolving mechanism in many developing countries and have thus far proven to be inadequate to the scale of the problem and face many obstacles of their own. While mobile telephony has been expanding rapidly in developing countries, particularly where it is coupled with the use of pre-paid cards, network providers often appear to be sceptical about roll-out in rural areas. Even where networks do reach, coverage does not necessarily mean access for poorer sections of the community. Attempts to address this by pooling demand in telecentres, cybercafés and small phone-shops have had success in some regions, particularly in peri-urban areas, but overall results to date are uneven. Further, these centres often do not go beyond telephony and related services to more fully address the development needs of the poor, although some are evolving in that direction.

The technology-development landscape is continuously evolving not only in terms of market dynamics and technology opportunities but also in terms of permitting new approaches to meeting the development and communication needs of the poor and under-served communities. This research considers one of these evolving options to address the problem particularly at the level of last-mile or last-inch access: an innovative combination of community owned enterprises and the new wave of wireless and related technologies that together may have the potential to extend networks and offer new services to poor communities and to empower them to develop solutions that are more focused on their development needs. While a lot of attention is being paid to wireless and related cost-effective technologies, the focus has been mainly on connectivity and perhaps not enough on how this might permit new approaches to development at the local level that could also be effective in empowering communities.

In combination with a number of positive regulatory trends and ideas, these emerging options could make a significant difference to network access, delivery of services and economic and social opportunities for poorer rural communities. They can drive down costs and make maximum use of community resources, enabling the emergence of new business/development models that are both more economically sustainable and more empowering than anything else available. 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-Driven Enterprises?

Certain advantages of a community ownership model 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. In recent decades the benefits of community ownership and participation in terms of empowerment have also been recognised and exploited to good effect.

Few realise that 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 cooperatives have appeared in countries as diverse as Argentina and Poland. Local authorities have also taken up a similar role. They are highly successful in terms of price and quality and, more importantly, have been shown to contribute and often stimulate other development activities locally. In poorer countries, local community control and participation is widely recognised as critical to the success of ICT projects such as telecentres and application development. And rapidly expanding programmes for local access in India in recent years combine both network provision and community-driven applications development and supply provision.

These are often presented as merely niche areas or historical phenomena that are no longer valid for more general application in terms of in light of technological advancements and the growing role of the private sector involvement in the ICT sector. However, research demonstrates that this is an option that is being explored and implemented in both developing and industrialized countries.

The Role of Technologies

It is, in part, technological innovations that increase the potential of this model now as a candidate for serious consideration. New and emerging technologies, especially wireless, are particularly suited to the deployment of community owned network infrastructures because of their low level of initial investment and scalability, their relatively simple technical deployment, their low-cost and open standards, and their adaptability to voice and data requirements.

Wireless technologies of different types are beginning to demonstrate their value in those regulatory pockets that allow them (and in some that do not). Not only pilot projects, but also a few full-scale rollout programmes are deploying low-cost wireless to reach low-income rural communities, where beneficial applications are being developed from the ground up.

Regulatory Openings

Of course, regulatory obstacles to new technologies and players have often been the major barrier to progress in many areas of ICT development. But there is some evidence that there is more openness to trying out new solutions such as ‘voice over IP’ and wireless protocols, particularly in areas that are seen as otherwise unattractive for investment and service provision.  Single formula solutions are also no longer seen as being supportable. The reality of ICT environments and needs, of vested interests and investment possibilities, varies hugely. But 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.

It is early days yet, and the emerging possibilities will take some time to come clearly into focus. But there is little doubt that paradigms in ICTs are becoming more varied and complex, each component more suited to different possibilities, and that the simple binary of public monopoly versus private competition no longer constitutes the poles in this dynamic. Analogous to technology neutrality, it could be argued that ‘operator neutrality’ is needed in the regulatory space to facilitate service and network provision by local actors.

Putting Innovative Technologies and Community Ownership Together

These technology innovations, and at least glimmerings of regulatory openings, could open the door to a powerful local level dynamic in a couple of directions.

One is towards local entrepreneurs and/or SMEs taking the entrepreneurial role, perhaps backed by external capital or as subsidiaries. The second is towards a community ownership model. Both models will hopefully find their place. Each is oriented towards different circumstances, but there is also a significant area of overlap where variations of either model, and hybrids, are possible.

SMEs can take advantage of many of the conventional supports for private investment, and when they support local economic activity and ownership they are to be particularly applauded and deserve support. But the research evidence, from the case studies and documentation, also strongly suggests that the community ownership model potentially offers significantly larger benefits, especially in a development context. The community ownership model and hybrids based on the same principles have the potential to viably extend networks further out into poor rural communities, to provide more affordable services, and to ensure that these services have a greater development impact through linking directly with the needs of these communities. They also have the potential to act as community catalysts and as a support for a range of other development activities. For these reasons, we believe that the model deserves, and requires, specific attention from the international and national development community and from those governments that are interested especially in the impact of ICT on development.

Where and How can they be made to Work?

There is general agreement that no single model of local ICT network and service development is suitable everywhere, and efforts at transplantation have had mixed results. Three identified variations of a community driven approach are the user/community owned cooperative, the local authority owned network, and the hybrid entrepreneurial/community-driven model. Each might suit different circumstances. Community ownership in general, our research suggests, works best where there is quite a high level of community institutional organisation (NGOs, CBOs etc.), strong leadership for the initiative itself, significant support in the local political context (partly to negotiate openings at other political levels), and where the demand for ICTs emerges directly from the experience of community social, economic and other needs.

However, elements of an enabling environment can be identified to enhance the prospects of implementation and success. Indeed, in the absence of at least some of these it seems likely that their potential will remain largely unexploited.

1. A Supporting National Policy Strand

Areas of national policy that would support the emergence of local community owned enterprises include:

1. Identification of areas where current approaches are failing (reach and/or provision of affordable access);
2. A suitable legal structure that would be flexible enough to support different partnership structures;
3. Tax exemption or benefits for non-profit enterprises, and a means to ensure that surpluses are reinvested in local communities;
4. A National Support Unit, or some such modality, to kick-start community owned initiatives, and to design, provide or oversee many of the proposals below.

2. Regulatory Climate

The following would create a regulatory climate generally favourable towards local network deployment and a few specific favouring a community owned approach, to be applied in areas identified as suitable.

1. Technology neutral licenses, so that services use the most effective and cheapest available;
2. Flexibility should be allowed in license award and conditions;
3. License exempt spectrum for wireless use should be free of costs and administrative burdens;
4. Interconnection pricing should be favourably set, including ‘asymmetric’ pricing;
5. Universal service funds should be accessible for development of community owned networks, including at the application and content level;
6. An ‘open access’ policy for connections to the national backbone could be promoted, that would also recognise the development benefits and higher conventional costs of services in rural areas;
7. Local regulations could be developed to ensure that service and application initiatives embody significant elements of community ownership and control.

3. Investment and Financing

Here too some innovative thinking is needed to develop mechanisms for communities to gain access to financing for viable network development. These might include:

1. Tax and other finance mechanism reforms to give cooperatives and not-for-profit ventures fair access to existing investment mechanisms;
2. Institutional mechanisms for low cost loans, including adapting existing donor mechanisms;
3. Institutional structures that will attract local area investment, from users and others.

4. Resource and Capacity Building

This is one of the major areas for support. It is widely acknowledged that business and organisational skills are in short supply at local level. This could be addressed in a number of ways:

1. Capacity building activities and materials developments;
2. Establishing national pools of resources and expertise;
3. Linking to experience and expertise elsewhere, through information sharing, peer-to-peer support, study visits, building networks and so forth.

Many of the above would best be provided as a coherent and sustained package by a national support institution, agency or initiative specifically charged with designing and implementing a supportive environment for community owned and community-driven networks.