Page 338 - Shaping smarter and more sustainable cities - Striving for sustainable development goals

The regulatory control of natural monopolies involves the encouragement of competition, the
efficient use of scarce resources, ensures the quality of services and the defense of the users' rights.
Although this issue is a matter of sectorial management (for instance, a Ministry), local governments
come to venture into these issues.
Thus, besides the sectorial normativity, there are other regulations which can be affected. For
example, there are countries in which their interest access is governed by community centers. While
formally in other countries these centers are not regulated by the telecommunication authority.
Instead, there may be local regulations (i.e., civil defense and protection of children) that affect the
sector for instance by establishing a minimum number of posts, the distance between posts or by
filtering some Internet content. Then, at the municipal level, in virtually all cases and countries,
there are regulations exclusive to cities in building permits, use of rights of way, visual impact
(antennas), urban impact, environmental impact, operating licenses, zoning and other issues related
with the internal structure of the city itself. In other cases the city government promotes
infrastructure deployment, by allowing (with or without cost) the use of public structures such as
poles, street lights, tunnels, ducts or roads, etc.).
Thereby, local governments can play a very important role, since rigid normativity on certain
facilities (air, antennas, ducts) inhibits the deployment of networks. In the same way, high costs of
the right of way increase the cost of infrastructure and the corporate management.
In cases when governments deploy infrastructure projects, financing strategies are very
heterogeneous. Even though, all of them are public initiatives, not all financial models will use
taxation. The main funding mechanisms that can be used are:
 From taxes: It is one of the most important source of public funding. It is criticized by opponents
of the government intervention, especially when governments intervene on areas where there
is already telecommunication access.
 Redeemed for taxes (tax or rates): It happens when government taxing rights (i.e., rights of way)
are exchanged for infrastructure development or services. Another form of redemption is tax
relief to stimulate the infrastructure deployment of some operators. An alternative form of this
type of funding mechanism is "tax works" where operators develop infrastructure in exchange
of not paying some taxes (equivalent to the cost of the infrastructure).
 Loans + free cash flow: It is a mechanism comparable to the financing of any private project,
where the initial capital comes from the financial leverage from partners. In this case, the
government can appear as the first guarantor of loans, either directly or appearing as the main
customer. Subsequently the project can try to sustain itself by the received revenue as a
compensation for their services.

 Government as a major customer: Deployment projects can be funded by the income provided
by governments, such as the city government.
 Advertising: It refers to the funding mechanism from Internet contents: paid access and
advertisement financing. Part of the revenues from the two concepts may end in the
government coffers.
 Utility allowance: It refers to using funds collected from other public service (mainly from
electricity distribution service) to maintain telecommunications infrastructure projects.
However, some regulations prevent these cross‐subsidies.
 Corporate donations: As a form of social responsibility, there may be private donations from
businesses.

328 ITU‐T's Technical Reports and Specifications