Nova Labs didn’t set out to address the connectivity gap, but it may have accidentally cast itself in a pivotal role.
The newly minted unicorn — fresh off a $200 million series D funding round led by Tiger Global and a16z — uses blockchain to facilitate a decentralized IoT and 5G hotspot network. This distributed model could be particularly useful to help address the internet affordability gap in densely populated areas. But it’s unclear whether legislators will embrace the new technology — and whether Nova Labs will even try to change their minds.
Nova Labs — then known as Helium — launched its distributed wireless network in Austin, Texas, back in 2019. Austin residents could purchase Helium Hotspots that would broadcast their home internet connection for anyone in the Helium Community to use. The idea is that, while people wouldn’t normally trust strangers to use their home internet, blockchain could facilitate a secure shared connection. The network now consists of over 700,000 hotspots in 170 countries.
In exchange for hosting strangers on the Helium networks, hotspot owners mine tokens that can be sold on secondary markets. The total circulating supply of Helium tokens is now worth around $2.7 billion. Enterprise partners pay for network access based on their data usage, which creates a two-way economic exchange.
The original Helium white paper from 2018 claims this economic model would “inject decentralization into an industry currently controlled by monopolies.” Decentralization would in turn allow network coverage to become a “commodity, fueled by competition, available anywhere in the world, at a fraction of current costs.”
Bridging the internet connectivity gap wasn’t something Nova Labs set out to do, at least not in those terms.
“It’s not something we specifically focused on because, in the beginning — this goes back nine years — the mission was always to just figure out how to build a global contiguous network that was low-cost and easy to use and open,” Nova Labs COO Frank Mong told Protocol.
Mong pointed to the example of San Jose turning to Nova Labs for remote learning, which was “not something we planned for, but it sort of just happened.”
The San Jose partnership probably isn’t as direct as you expect. Rather than giving students access to the Helium network for their schoolwork, San Jose subsidized it through hotspot mining operations.
Here’s how it worked: The San Jose Mayor’s Office Of Technology used funds from the California Emerging Technology Fund to purchase Helium-compatible hotspots to volunteer residents and small businesses. The mining funds from those hotspots were then used to subsidize internet access for over 1,300 households in the form of $120 gift cards. The pilot program officially began in January and details of the fund disbursements are supposed to arrive after six months.
Further complicating the narrative, the California Emerging Technology Fund is a nonprofit endowed by AT&T and Verizon, as required by the California Public Utilities Commission when it approved merger deals for each of the companies in 2005. Somewhat ironically, then, the San Jose project that on its surface appears to be a win for decentralization, and crypto was originally funded by the incumbents Nova Labs set out to challenge in its white paper.
In any case, Mong said the mining subsidy model could act as “UBI for the internet.” The project in San Jose is ongoing, and Nova Labs has seen interest in launching similar programs from mayors all around the world, Mong added.
But the subsidization model is only one way for Helium to address the internet affordability gap, and probably not the most obvious. “I think creating 5G coverage in neighborhoods that normally would not get that coverage because of many economic reasons would be a great place for us to start,” Mong said.
This more direct approach could help Nova Labs benefit from the Infrastructure Investment and Jobs Act, which allocated $65 billion for expanding internet access. However, it’s unclear whether Nova Labs would attempt to directly tap into that pool of funds. Several of the key partners of Nova Labs — including Dish and series D investor Deutsche Telekom — have undoubtedly set their sights on broadband subsidies. But Mong told Protocol that Nova Labs hasn’t been directly involved in talks with regulators about subidziding connectivity.
“We're no experts in government policy, but we are, I would say, decent at technology and figuring out how to leverage that technology to make some amazing things happen,” said Mong. “We're just trying to continue to push forward this crypto model that we think can solve a lot of cold-start problems, reduce costs of wireless infrastructure for everyone. And hopefully, that reduction in cost means that the on-ramp to the internet is much more affordable and accessible for all.”
This story was updated April 8, 2022 to clarify some of Helium's mechanisms for network-sharing.
