Broadband News

How is the Universal Service Obligation in Finland to be funded?

Last week, we reported that Finland had declare broadband a human right and would be imposing a Universal Service Obligation which guaranteed that all residents and businesses would be able to receive a 1Mbps service downstream by July 2010. This may not sound like a huge step, but considering the UK is providing a "commitment" (rather than obligation) of 2Mbps by 2012, it is nevertheless a stronger step. Finland also expected to offer 100Mbps to everyone by 2015.

Rather than merely talking about connection speeds, the Finnish government is quoting actual performance as part of the universal service, which in practice sets a minimum bar for all Internet services:

"The average speed of downstream traffic must be at least 75 per cent of the required speed in a measuring period of 24 hours. In a four-hour measuring period the speed must be at least 59 per cent of the required speed."

Ministry of Transport & Communications, Finland

Who will pay for it?

We asked the government department responsible who would be meeting the cost of the obligation, and if this was to be funded by service providers, what prevented them from charging prohibitive prices for such services? In response, they said that they would expect the USO to be funded by telecommunications operators who will be designated for this purpose by the end of the year. They also stated that the service providers may choose which technology to use (e.g. wireless vs. DSL) to deliver this service and pointed out that 1Mbps wireless services are already possible across the country so should be possible to implement at a reasonable cost. They further suggested that the government would assess a possible increase in the USO speed during 2010.

"The aim is that no public funding needs to be used, but according to Communications Market Act 'If it is evident that the provision of universal service constitutes an unreasonable financial encumbrance to the universal service operator and if the operator so requests, the Finnish Communications Regulatory Authority must calculate the net costs of universal service. The part of the net costs constituting an unreasonable financial encumbrance with regard to the size of the operator, type of business activities, turnover of the operator's telecommunications, directory inquiry service, and telephone directory service, or other similar elements shall be compensated to the universal service operator from state funds, if the operator so requests.'"

Statement by Ministry of Transport and Communications, Finland

The spokesperson also confirmed that they would expect the USO connections to be provided at a "reasonable price" and that FICORA (the Finnish Communications Regulatory Authority; equivalent to Ofcom in the UK) would monitor the pricing, although the legislation did not in itself include any pricing ceilings.

The press statement issued by the ministry suggested that "some variation will be allowed in universal service connection [speeds]" to allow for mobile operators to provide part of the solution.


Given the UK governments take out of the sector, then such a contribution to USO costs is possible.

The spectrum AIP fees (£238 in 07/08 alone) means there is plenty going direct to Treasury.

The proposed Digital Britain auction heist in 2010 yet to be commented on here is another sting for the sector and users alike.

  • mikeblogs
  • over 11 years ago

That bit about measuring actual throughput and not just connection speed is interesting for two reasons.

1 ) It will encourage the owners of websites to improve their service so theier slow datarates can't be used as an excuse by the telecoms firms. ( For example on O2 Pro LLU I get about 1.8 MB/sec for the Highways agency when downloading road plans but only 300kB/sec from Microsoft! )

2) It's rare on here to see throughput quoted when most seem to just talk about sky-high connection speeds which, of course, are useless without actual fast content links.

  • Pendlemac
  • over 11 years ago

Once fast peers come along - 10Mb or more - you might see a lot more use of torrent style (peer to peer) downloads when it comes to big release stuff. Perhaps something more streamlined than torrents are now - having it built into the browser, perhaps.

Also, it might be beneficial for some of the bigger ISPs to start caching downloads, but that's a tricky business (legally as well as technically, I suspect).

  • ElBobbo
  • over 11 years ago

Can't wait for 40/10 (or 100/100 if I move to Bournemouth).

Will 40/15 be available as a business package?

  • otester
  • over 11 years ago

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