Fast Broadband project brings ultra fast internet to sparsely populated areas

The Fast Broadband project was launched in December 2008 by Government resolution. The aim of the project is to ensure with state aid that fast broadband networks are built in areas where their commercial availability is unlikely.

The goal of the Broadband 2015 project was that by the end of 2015, more than 99% of users have access to a 100 Mbps broadband connection within two kilometres of their permanent place of residence or place of business. The project will continue until the end of 2019. 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.

State aid worth EUR 130 million

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 Traficom.

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 (External link), in Finnish)

Municipalities grouped into payment categories

In granting aid, municipalities are divided into two 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:

  • 8%
  • 22 % or
  • 33%.

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.

Maximum share of public aid for broadband projects

Under the Act on Broadband Construction Aid in Sparsely Populated Areas (1186/2009 (External link), 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 Traficom 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 Traficom and the share of the municipality's contribution. The amendment also enables Traficom 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.