State support proposed for high-speed broadband

Nearly all to get access to 100 Mb service by 2015

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The government of Prime Minister Matti Vanhanen (Centre) is ready to commit public money on setting up a high-speed broadband network throughout Finland. The government made a decision in principle on the matter at its meeting on Wednesday.
     The decision was historic. In contrast to neighbouring Sweden, no public funds have been used in Finland for setting up such networks.
     The ministers agreed on the new policy on Wednesday on the basis of a report by Harri Pursiainen, Chief of Staff at the Ministry of Transport and Communications.
     Pursiainen feels that the state should give its backing to broadband investments by telecoms operators, so that as many Finns as possible will have access to high-speed Internet connections in 2015.
     Fast connections are needed to make it possible to watch high definition television programmes over a broadband connection. Pursiainen also feels that fast connections are also useful in telecommuting, remote health care, and on farms.
     
In the early part of the decade Finland managed to hold its own in international comparisons of broadband services. However, a study published last week shows that Finnish broadband services are only the 12th fastest in Europe on average, while Sweden was in first place.
     In Pursiainen’s proposed plan, all Finns should have access to Internet service of at least one megabit per second by the end of 2010. Five years later, nearly all should have access to a 100 Mb service.
     
Harri Pursiainen believes that commercial investments by operators will mean that in 2015 95 per cent of Finns will live within a two-kilometre radius of a 100 Mb network. He feels that public funds will be needed to raise that figure to 99 per cent.
     The cost of the investment would be EUR 200 million, of which the state would pay up to a third, municipalities, regions and the EU another third, and telecommunications companies at least one third. Under the model, the public support would be paid to the builders of the networks.
     At its meeting on Wednesday, the government did not take a stand on the distribution of costs. Decisions on that will be made in the autumn by the ministerial committee on economic policy.
     
Public money is not on offer for subscriber connections - that is, the two last kilometres. Bringing 100 Mb fibre optic, or radio link connections all the way to people’s homes would raise the costs by EUR 480-780 million.
     Connections between homes and the optical fibre network are expected to involve the traditional copper cables or wireless connections. Speeds of both copper and wireless connections are expected to increase considerably in the coming years to dozens of megabits a second.
     
Under the proposal, revenue for the subsidies would come from the auctioning of frequencies.
     If the revenue from the auction is not sufficient to cover the state share of the subsidies, Pursiainen proposes that a compensatory payment should be levied on telecom operators. The operators have already started calling this a “broadband tax”.
     The operators are likely to pass on the costs to their customers, which would raise monthly broadband fees by less than one euro.
     
Broadband operators have taken a cautiously positive view of the proposal. Specific comments are not expected until the companies have studied the details. The Association of Finnish Local and Regional Authorities is also taking a positive view, even though the plan imposes costs on municipalities.
     FiCom , the Finnish Federation for Communications and Teleinformatics, says that it is surprised that information society development is being pushed forward by favouring one technology - fibre optics.


Previously in HS International Edition:
  Cisco: Finnish Internet connections not close to fastest in Europe (12.9.2008)

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