Incentives for Participation in CNs (v2)

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Draft Available
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Executive Summary: 
D2.8 is the follow-up deliverable of D2.3, entitled “Incentives for Participation and Active Collaboration in CNs” [1]. In [1], the goal has been to provide a thorough review of what serves as participation and collabo- ration incentive in CNs. Throughout that work, our interpretation of the term “incentive” is quite relaxed and inclusive, embracing political causes, cultural aspects and social effects. In D2.8, the departure from its predecessor deliverable is two-fold. First, the emphasis is on incentive mecha- nisms the way the term is used by the economics community. Hence, we propose, present, and analyze ways to share the deployment and operational costs of a CN as well as the possible revenues from it (e.g., pricing policies, subscription schemes, investment cost sharing rules) that incentivize the engagement of different CN stakeholders. Second, the carried out and reported research work is inspired by concrete CN instances. These serve as case studies and are highly representative of the broad variety CNs exhibit with respect to the different types of actors involved in them and the environment in which they grow (rural vs. urban). Hence, our research work is inspired by the economics (one could use the term “business models”) of three CN instances: the B4RN CN in Lancashire, UK, the CN in Catalonia, Spain, and the CN, in Greece. The first two CNs represent CN success stories in Europe and worldwide, with strong elements of novelty in the chosen technology, business model, and strategy. The third CN is a younger initiative, which has been strongly dependent on public subsidy during its deployment phase, and has now been experimenting with novel subscription schemes to render its operation self-sustainable. Having said that, the relevance of the reported work is by no means limited to the specific CNs. On the contrary, both the models and the proposed/analyzed mechanisms can find application to many more CNs across the world, possibly with adaptations accounting for the particularities and constraints of the specific environment. In fact, a more ambitious objective of this work is exactly to develop elements of a theory for the economics of community networks. Such a theory has been missing so far since in very few cases the deployment of these CNs has followed some “business plan”. As many of these initiatives mature and questions of scalability and sustainability become more relevant, people running these networks will increasingly pursue insights and guidelines for sustainably funding the deployment and operation of their CNs. This deliverable could be seen as one of the first attempts to: (a) identify existing relevant research work in economics, primarily, and informatics; and (b) carry out novel research, that could serve this purpose. The deliverable is structured into four main chapters. In chapter 2, we summarize a model for determining optimal subscription prices for wireless CNs [2]. The interest in the model is two-fold: first, it captures the evolutionary growth of wireless community networks, giving insights to the relation between the original in- vestment on the network infrastructure and proper pricing policies. Secondly, we reuse it as a component of our modeling work in chapter 5. In chapter 3, we focus on the distinct model of the B4RN CN for deploying fiber cable infrastructure and propose the truthful cost sharing mechanism in [3] as a tool for managing the funding of the project and concluding upon its economic sustainability. Then, chapters 4 and 5 present fully original work. In chapter 4, we present an innovative subscription scheme that has been introduced in the CN as a means to motivate the engagement of the community in its funding. We summarize main hints about its operation, while its full analysis is provided in a technical report (submitted and currently under review) that is added as an appendix to the deliverable. Finally, in chapter 5, we focus on and its innovative approaches towards establishing synergies with for-profit entities. We propose and analyze models for such synergies in two different scenarios: (a) the for-profit actors provide Internet access over the shared community network infrastructure; and (b) the shared resources are storage space and computational capacity. In particular, we explore the suitability of different cost-sharing mechanisms regarding the equilibrium strategies they induce in the games that emerge for the involved actors. Appendices I and II are papers submitted under double-blind review and will be made available on this site after the revision process.