Monday, August 9, 2010


There has been some comment from on the last post regarding the Finnish Government's latest approach to broadband.

Simply put, Finland has become the first country in the world to make broadband a legal right for all its citizens, entitling them to a one megabit per second broadband connection now, with a 100-Mbit/s connection to become a right by the end of 2015.

As a result, all Finns, including those living in sparsely-populated areas, will be connected to the internet with fast fibre-optic or cable networks by this target date. Therefore, the objective of the project is to ensure that nearly all (more than 99 per cent of the population) permanent places of residence and places of business and public administration are no further than two kilometres from a 100 Mbit/s fibre-optic or cable network.

In principle that sounds very similar to Wales but in practice, it is very different.

Unlike the proposals from WAG, telecommunication operators themselves are expected to construct fast connections in densely-populated areas, where there is demand, on market terms. Support will only be given to projects that are not commercially viable i.e. in raising population coverage from 95 per cent to 99 per cent in rural areas.

More relevantly, telecommunication operators will have to dip into their own pockets and cover at least 34 per cent of the costs. The rest of the costs will be funded by the State (66 million euros for the period 2009–2015), municipalities and the European Union’s Rural Development Fund (24.6 million euros).

Therefore, the difference is that
  • telecommunications companies are being pushed by the Finnish government to cover the vast majority of the broadband extension within the country (which is why the project is probably costing less than half of the that to be spent by WAG)
  • telecommunications companies are expected to put in their own cash of tens of millions of euros into the Finnish project, unlike the procurement exercise in Wales where WAG will pay for the whole project
  • financial support for broadband from government and European funds will only be provided in those areas where there is no commercial viability
  • other budgets critical to the economy, such as business support which are vital for getting the country out of recession, have not been "raided" to pay for this additional broadband funding
That seems to be a very different proposition to that put forward by WAG officials, as I have discussed in the previous posting.

Given this, I wonder if any WAG officials have been in touch with their Finnish counterparts to examine whether the key criteria for the Broadband 2015 project could be adopted for Wales?

It certainly seems to be better value for money, could cost far less than expected and could ensure that telecomms companies, which will benefit financially from the infrastructure investment, also pay their fair share of the project.

It may also mean that less funding would need to be diverted away from supporting small businesses in Wales.

There are clearly different models and technologies for delivering broadband to much of the country (e.g. read this article on Rory Stewart MP and his idea for broadband into rural Cumbria), not all of which necessarily involve government.

The question is whether WAG has thoroughly examined all the options before plumping for the easiest i.e. pay a large telecomm hundreds of millions of pounds to provide fibre across wales.

I would suspect they haven't.