First government broadband scheme supports mobile connections

Prime Minister Marin's Government is planning three broadband aid schemes. The first one was launched as the Government issued a decree on minimum connection speed and the financial contribution of municipalities. The Act on Broadband Construction Aid entered into force at the turn of the year and the Government issued the decree on 11 March. It will enter into force on 15 March 2021.

The decree applies to the five million euro appropriation that is reserved in the 2021 Budget for the Government's first broadband aid scheme. Constructors of broadband connections are eligible for support when the minimum speed of a broadband access is 100 Mbit per second in the incoming traffic and 40 Mbit per second in the outbound traffic. During peak hours, the actual minimum speed to be achieved must be 70/28 Mbit/s.

Unlike in the previous broadband aid scheme, the subsidised broadband connection does not have to be symmetrical in speed. The supported broadband networks can be implemented not only through fixed connections but also via fixed wireless access based on 5G technology. Aid may be granted for fast connections at holiday homes, too.

"This small and flexible scheme also enables cost-effective high-speed wireless connections. We want to promote remote work at second homes and outside the centres, too. In test networks, the range of base stations has reached up to ten kilometres in low frequencies, so I encourage the telecommunications sector to seize the opportunity now," says Minister of Transport and Communications Timo Harakka.

In November 2020, the Ministry of Transport and Communications, the Finnish Federation for Communications and Teleinformatics (FiCom) and telecommunications companies made a commitment to improve broadband connections. In line with the commitment, the high-speed broadband connections required by modern society must be available in all of Finland, regardless of the time of day or the location. The aim is to ensure the availability of high-quality broadband connections for all households. According to the commitment, high-speed connections are to be constructed primarily on market terms and only secondarily using public funds. The starting point is technological neutrality, which means that the development of fixed and wireless connections must be parallel.

Criteria for calculating municipalities' contributions determined in the decree

In order to receive the support, the municipality has to pay for a part of the project expenses. The statutory support for the state and municipality accounts for 66 per cent of the project's eligible costs. The municipality's contribution to the expenses is 33, 22 or 8 per cent, depending on its economic capacity, population, and degree of urbanisation.

The decree lays down provisions on how the municipality's contribution is calculated. A list of the contributions from different municipalities are attached to the decree. Following the entry into force of the new Broadband Aid Act on 1 January 2021, the previous decree on the categories of municipalities was repealed.

Broadband aid scheme began in 2010

The broadband aid scheme was launched in 2010 and support will continue to be granted in accordance with the Government Programme. The aid scheme will target areas where no broadband will be available before 2025. The aim is to bring 10,000 new households within the reach of high-speed broadband connections. A total of EUR 76 million was granted in 2010-2019, with the aim of providing access to high-speed broadband connections for 130,000 households. The supported projects are partly in progress, because the construction of the project areas may take several years, depending on the extent and circumstances of the area.

What next?

The Finnish Transport and Communications Agency Traficom will carry out market analyses of the project areas proposed by the regional councils to receive broadband aid. The Agency will also map the existing high-speed broadband connections and related construction plans in the areas. The regional council will then organise a competitive tendering process for the selection of a network constructor. The selected network constructor may apply for aid from the Finnish Transport and Communications Agency.

The aim is to promote high-speed broadband connections through the EU Recovery and Resilience Facility, too. New state aid regulation is currently being prepared in the EU and it is expected to enter into force in 2022. The aid schemes will take account of changes in EU state aid regulation. The third programme that can be used for financing broadband construction is the Rural Development Programme of the European Agricultural Fund for Rural Development.

Inquiries:

Maija Ahokas, Director of Unit, tel. +358 295 342 390, maija.ahokas(at)lvm.fi

Aino Koskinen, Senior Specialist, tel. +358 295 342 224, aino.koskinen(at)lvm.fi