Fast Broadband project brings ultra fast internet to sparsely populated areas
The goal of the Fast Broadband project is that by the end of 2015 more than 99% of users live permanently or have a permanent business establishment within two kilometres from a network that enables a 100 Mbps broadband connection. In this context, users include permanent places of residence and permanent offices of businesses and public sector organisations.
In 2009, regional councils planned regional programmes of projects for building broadband infrastructure. In total, the programmes included some 800 projects and their combined costs were estimated to be nearly EUR 500 million. The projects included plans for expanding the broadband network system by 40,000 kilometres, enabling the provision of advanced communications services to approximately 130,000 users in sparsely populated areas.
A total of EUR 130 million of public aid is available to broadband projects. Of the total funding, EUR 66 million is state aid, approximately EUR 25 million is from the EU Rural Development Programme for Mainland Finland and approximately EUR 40 million from Finnish municipalities. The state aid is granted by FICORA.
Aid is targeted at improving the availability of connections in the geographically most remote areas. Some five per cent of all households are located in such areas.The areas that are eligible for aid are defined in a decree of the Ministry of Transport and Communications (246/2010, in Finnish)
In granting aid, municipalities are divided into three categories in terms of their financial contribution to the projects. A municipality's category depends on its economic capacity, population density, the scope and technical execution of the broadband project and the costs per resident. A municipality's share of the eligible expenses of the project is:
• 22% or
In 41 municipalities, the municipality's financial contribution is 8% and in 59 municipalities 22%. In the other 242 municipalities, the municipality covers 33% of the costs.
The aid application process begins when a regional council announces the availability of aid and chooses, based on competitive tendering, an operator to carry out the project. After that, state aid can be applied for with FICORA for projects in the municipalities that belong to the 8% or 33% categories. For projects in such municipalities that pay for 22% of the costs, aid is granted by the Centres for Economic Development, Transport and the Environment (ELY Centres).
Maximum share of public aid for broadband projects
Under the Act on Broadband Construction Aid in Sparsely Populated Areas (1186/2009, in Finnish),the maximum amount of public aid is 66% of the eligible costs. This applies to broadband projects in which the operator responsible for the construction has been selected by 12 November 2012.
In such projects, state aid is paid after the project has been completed, on the basis of actual costs. State aid payments are claimed from FICORA with a separate application.
The Act on Broadband Construction Aid in Sparsely Populated Areas was amended on 12 November 2012. After the amendment, the maximum total amount of public aid to broadband projects is 90% of the eligible costs of the project. The amendment did not change the share of state aid granted by FICORA and the share of the municipality's contribution. The amendment also enables FICORA to pay 50% of the state aid granted to a project immediately after the decision on granting aid has been made. This facilitates project financing. The amended provisions apply to projects in which the regional council has launched the aid application process after 12 November 2012.