The management of conflicts of interest: a central question in the governance

Published on February 21st, 2020

Written by Roger Baig Viñas (a play on words combining the name of the Village where it was started, Gurb, and WiFi) is a well-known success case of community networks. It was started by local villagers in 2004 in a rural area of Catalonia to overcome the lack of broadband internet access. As of September 2019, this network of fiber optic and WiFi links includes more than 50,000 working nodes and delivers internet connectivity to thousands of people on a daily basis.

Figure 0: WiFi Network.

In addition to providing internet access, the project puts into practice a disruptive economic model that is based on the ideas of the commons and collaborative economy.  It does so by deploying a common-pool resource (CPR) network infrastructure and a fair and sustainable operations model. As of September 2019, more than 30 small and medium-sized enterprises operate their professional services via the commons network in coordination with participating individuals, volunteers, and other organizations. This is only possible due to a sophisticated governance system that the community has developed over time that draws upon and combines practical experience and theoretical knowledge.

Concerns about the early identification and sound management of conflicts of interest have been a constant in the development of’s governance system. These concerns have shaped the definition and roles of the stakeholder groups, their interactions and incompatibilities, as well as the network’s economic model. Figure 1 presents’s stakeholders in three subgroups: the public interest, the altruistic, and the in-return. The public interest subgroup encompasses individuals and organisations whose motivation for participating in the network is contributing to social welfare; the altruist subgroup includes those whose motivation is furthering the project without any specific material reward; and the in-return subgroup comprises those who expect some in kind or economic return for their participation.

Figure 1: Stakeholder Groups and Sub-Groups.

The general rule when managing conflicts of interest at is that the exclusions due to this type of conflict prevails over the rights. Under this rule, most of the tasks of the public interest and in-return stakeholder groups are mutually exclusive, thus, the participants have to choose to contribute to one or the other, but not to both at the same time. is a direct democracy system; thus, the ruling body is the whole community. These policy- and decision-making processes are conducted through participatory meetings and are always formed through the greatest possible consensus. The system operators are responsible for running the critical services of the system (accounting of resource consumption, dispute resolution, etc.). In order to prevent collusion or conflict of interest by design (thus avoiding constantly resorting to ad hoc policies and regulations),, unlike the usual practice in Western countries, requires system operator-critical tasks be performed by a non-profit NGO, the Foundation.

The governance system is implemented through a set of internal regulatory instruments presented in Figure 2. These instruments are intended to be enforceable by law. Thus, they have been carefully written and are kept under constant review to guarantee their compliance with Spain’s existing legal framework.

Figure 2: Internal Regulation of

The constant concern over proper management of conflicts of interest is also evident in internal regulations. The network license is the basic standard upon which all of the internal regulations are built. It establishes the basic rights and duties of a licensee and is mandatory for every network participant. The Foundation’s bylaws state that the Foundation is the operator of the system-critical resources and establish the various roles and purview of the board members and employees. The agreement model for economic activities and participation in the compensation system designates which participants are obliged to participate in the construction and maintenance of the infrastructure and explains how they must do so. Compliance with this agreement is mandatory for professionals and those who “make significant use of the network, such as to be convenient to compensate or to ensure the proper operation of the network or its sustainability.”

From an economic perspective, the project seeks the creation of virtuous circles of sustainability and network infrastructure expansion based on the efficient use of available funds and connection of as many users as possible. Figure 3 shows the general economic structure the community is developing and implementing. The specific objectives of the governance system are to ensure (i) that the available funds are effectively used for building network infrastructure; (ii) that the infrastructure is available to the entire population; and (iii) that the infrastructure is built, operated, and maintained according to the fundamental principles.

The scope of the CPR is limited to the network construction and its operation. Thus, it is beyond the scope of the project to rule over the profits the participants may obtain from the use of the resulting infrastructure. That is to say, those offering professional services are free to set the prices of their services, which is a basic principle of the free market economy, while the right to offer not-for-profit services is preserved. Conversely, the activities concerning the CPR’s construction and operation are strictly regulated and speculative and extractive practices are explicitly forbidden. Accordingly, the only two sources of revenue within the CPR are labour remuneration and interest on loans. Prices and rates are collectively established. The labour remuneration is set on the basis of fair salaries. The interest rates are set by compromising between being sufficiently high to be competitive with similar investment opportunities outside the system and providing excessive profit, which also prevents losing touch with the real economy.

Figure 3: Global financial flowchart of

At end-user level, the differentiation between the amounts aimed at contributing to the capital expenditures (CAPEX) and operational expenditures (OPEX) of the CPR, that is to say, construction and operation costs respectively, and the amounts intended for the service providers are made explicit to the customers through the harmonised billing template presented in Figure 4.

Figure 4: The template to be used by the operators for invoicing their service subscribers and the destination of the items.

Given the uniqueness and potential for replication and generalisation of the’s governance system, we believe it stands as a model to effectively extend the CPR concept at scale to many other types of infrastructure, overcoming the bonds to which CPR models have been traditionally tied, that is to say, fundamentally natural resources limited in scale. For further information, elaboration and references, see the PhD dissertation “Development and management of collective network and cloud computing infrastructures” available at Most of the information and the figures in this blog post have been extracted from this dissertation.

Bio: Roger joined as a volunteer in 2007 and had been a staff member of the Foundation from 2011-2019 and is currently working as a researcher at Universitat Politècnica de Catalunya.