Some Thoughts on Financing Online Hubs

Some Thoughts on Financing Online Hubs

The cost of local online hubs will obviously be proportional to the scope of their ambitions. More ambitious plans for online portals—especially those that opt to fund and integrate public media into the mix along the lines of Model 3 described above—will be significantly more expensive than online hubs that focus strictly on Model 1 content and services.

Some Model 3 proposals to have governments create public interest portals rely upon taxes on private media operators so that the government could finance what would become competing public media initiatives. That is a mistake. Forcing struggling private media providers to fund their public sector competitors raises fundamental fairness issues and potentially skews media markets in favor of public media operators. The Informing Communities report got it exactly right when it said, “Governments should avoid regulations that distort incentives. Rules should not make investments in traditional media artificially more attractive than new ventures, or vice versa” (Knight Commission, 2009). General treasury funds could be used to support some local hub schemes without unjustly burdening private media operators with new levies (although it could still skew markets or crowd-out some private investment).

Of course, many local hubs would not require any government funding at all since the basic digital infrastructure could be very affordable and many of the needed resources—including human resources—could be donated. Philip Neustrom of the Local Wiki project estimates that to replicate in other communities a hub model similar to that which they developed for Davis, California with the Davis Wiki would likely only cost $2,000 to $10,000 (Neustrom, 2010). Those resources would be needed mostly to cover the hardware expenses (computers, servers, Internet access, etc.) and other back-office costs. Again, this assumes that volunteers donate time to these projects and that other resources are donated by others in the community. Some communities might need to spend much more to hire people to develop the hub and keep it current.

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