Finland’s universal broadband

A couple years ago, people were making a lot of noise about Finland’s announced plans to make broadband a universal right by July 1, 2010.

On schedule, last week, the same announcement received more coverage as the regulations went into effect. But not a lot of time has been spent analysing what really happened.

If you look at the details in the press release, you’ll see that FICORA (the regulator) has annointed 26 universal service operators in various regions of the country. In effect, a monopoly universal service provider has the obligation to provide certain services to any customer (consumer and business) for their region, in areas where the regulator has concerns about the competitive supply of services.

FICORA expects that 1Mbps broadband will be available for 30-40 Euros ($40-$53). It isn’t an overly onerous obligation. But the question remains as to whether this program serves to prevent competition from ever emerging in areas that provide subsidies to one provider. Would a portable user-subsidy be more effective at stimulating facilities based competition and having less of a distortionary effect on the market?

Such a program would also stimulate broadband adoption in urban areas among those who find regular broadband pricing a burden.

In the meantime, we are continuing to explore broadband becoming part of the definition of basic service for Canadians. Proceeding 2010-43 will have oral hearings beginning in late October. The file continues to accumulate, attracting many megabytes of data and argument.