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The economic challenges to the expansion of Internet connectivity are mostly related to the higher cost of infrastructural expansion and unaffordability for unconnected and underserved communities. The cost of deployment for large telecom operators is higher in rural and remote areas as compared to urban areas, due to geographic and topographic limitations. To compensate for these investments, large telecom operators subject end-users to higher service costs. As rural and remote communities tend to be poor, the resulting unaffordability, coupled with a relatively small customer base, results in low overall demand for connectivity services. Together with the limitations of access to spectrum, small/community/non-profit operators often face high licensing fees and complex authorization and registration bureaucracies that are designed for the regulation of large telecom operators. Besides the listed challenges, there are also opportunities in expanding Internet connectivity, such as market expansion for Internet service providers to unconnected and underserved areas, which are mostly located in the Global South, the use of unlicensed and unused spectrum, representing an affordable alternative to provide broadband Internet to lower-income communities, and the Universal Access Service Funds, keeping in mind that to be effective, the access and use of the funds must be transparent, include support for broadband deployment, and recognize small/community/non-profit operators.
Public policies developed by governments fundamentally impact the availability of universal, affordable, sustainable, and quality broadband connectivity. Governments can effectively tackle the challenges by ensuring coherence in public sector policy development through strong collaboration and coordination between the various public bodies involved in connectivity expansion, at all levels of governance. Governments have the responsibility to create more equitable opportunity models that promote access to spectrum and infrastructure sharing for actors with limited resources through regulatory reforms with a special focus on underserved and unconnected areas. There are a variety of alternative regulatory approaches regarding access to spectrum, such as simplified, secondary use, and social licenses. Regulatory provisions for mandating access and infrastructure sharing can counter market concentration, minimize unnecessary resource redundancies, and allow for the reallocation of costs that would be used for infrastructure deployment to investments in service quality improvements. Large telecom operators should collaborate with local connectivity initiatives to find mutually beneficial agreements for connectivity expansion.
Small/community/non-profit operators are critical stakeholders that can provide last-mile connectivity in rural and remote areas, including by increasing digital literacy and providing content in local languages. They offer services that complement those provided by large telecom operators, finding creative ways to structure and finance their businesses in areas that are considered unprofitable by large telecom operators and boosting the local economy in a sustainable way. They can also help large telecom operators by creating new demand for mobile communications. Since they are local operators, they also help increase digital literacy locally and to provide content in the local language, which is key to guarantee actual adoption and true connectivity.
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