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different kinds of grants during different stages of previously did not have access to adequate
their projects, including: broadband services because of lack of commercial Chapter 1
attractiveness for service providers. The
• an initial scoping and feasibility assessment government only provided funding for broadband
grant ranging from GBP 2 000 to GBP 5 000 connections with speeds up to 2 Mbit/s.
(USD 3 138 to USD 7 845);
These communities used crowdfunding to pay
• a detailed project planning grant from GBP for new broadband infrastructure, which then
7 500 to GBP 15 000 (USD 11 767 to USD was rented to service providers, defraying the
23 538); or investment cost . A minimum investment of EUR
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10 000 (USD 11 392) could provide investors an
• capital investment in the broadband project, annual interest return of between 3 and 5 per
up to a maximum of 89 per cent of capital cent . For the investment to go ahead, a minimum
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infrastructure costs. of 70 per cent of households in that community
needed to sign up for a connection.

Case study: Community broadband in Germany
This approach proved successful. The largest such
community consortium took shape in the province
Communities in rural Germany have joined their
efforts successfully to finance the construction of of Schleswig-Holstein, drawing a total investment
a high-speed broadband network. The investors of EUR 70 million. It started in 2010 and came to
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have included a mix of local governments, involve 50 communities .
businesses and individuals. These communities
are located in the German provinces of Nordrhein-
Westfalen and Schleswig-Holstein, where they

Box 1.13: Key lessons: Community broadband

• Community broadband networks can be successful in deploying fibre networks in areas
that are commercially unviable for operators. However, they are relatively new and still in
the early phases of deployment, so it is not clear how commercially sustainable they will
be in the long term.

• Community broadband networks will often require external financing to get started.
Investments can be made by private crowdfunding , by government grants or a mix of the
two. Governments offering grants should vet every stage of the grant award process to
ensure the project is fully compliant with its investment criteria.

• Regulators may wish to ensure that communities receiving government grants offer the
infrastructure on an open-access basis. However, this may reduce the returns to the
community broadband network and so the community should consider the impact of this
in its early business-planning stages.

• Communities should consider how the service portfolio might evolve over time as
consumers increasingly demand over-the-top and streaming services, which require
highly reliable networks. In addition, communities might find it difficult to negotiate the
same competitive content deals that commercial operators are able to offer.

• Innovative business approaches can make it feasible for communities to invest in
broadband infrastructure. In this case study, the investors retain ownership of the
infrastructure and are entitled to a return on investment.

• This return could be used to offset possible borrowing needed for the project.

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