Companies applying for support to build broadband networks in the more outlying areas of Estonia must from now on submit real connection agreements, which the state says will cut down on wastage and the phenomenon of connections being registered which would not end up being used.
“We are taking a completely new approach here to avoid the misuse of taxpayers’ money,” Minister of Justice and Digital Affairs Liisa Pakosta (Eesti 200) told ERR Wednesday.
The minister has signed off on a draft regulation now going for its coordination round.
A total of €45 million, which will come from EU funds, will be distributed in the support phase, the fifth of its kind, which aims to support electronic communications access networks.
The bill notes that the state will no longer cover cable laying to arbitrary address points, as had been the case before.
“In the past, criticism arose that money was being granted to internet companies even if the cable passed a chicken coop or an abandoned hay barn. Now the state also wants to obtain real connection agreements from the cable layer,” Pakosta added.
In the previous rounds there had been cases where actual connections to the network came from only a quarter of the listed addresses, Pakosta said. Firms setting up the network may have had an interest in having fewer real connections, as they would not have been required to ensure future operation.
While up to now the state used two criteria in granting support: The volume of addresses gaining the option to connect, and the amount of support requested per address, the new requirement also takes into account the number of addresses actually physically following through on connecting, the bill states.
The state plans to withhold 30 percent of support if the promised connections are not made, with the new bill and the fifth support round, the minister added, stressing that under the new measure, a broadband connection cost ceiling will be €200.
The fifth round of broadband construction covers the years 2025–2029, and telecommunications firms or companies, local government-owned firms can apply for support to build an access network with a fixed connection, enabling a 1 Gbit/s download speed at peak-hour conditions, provided there are no plans in place to build such a network via private investment by 2029.
The access network (the so-called last mile) is that part of the communications network that extends from the core network to end consumers, be they homes, firms, or institutions. The cable to be built must be operator-neutral, meaning that any end user can choose whose internet and television services they will later use via that cable.
The state plans to create the option to connect for at least 10,000 addresses with this measure, which is to be financed from the European Regional Development Fund to the tune of €45 million.
The ministry plans to hold at least three application rounds to distribute it.
Pakosta also stressed the scale of this round of support: Since 2018, the state has so far supported the construction of access networks in rural areas to a total of €51.1 million through four different measures.
Over 47,000 addresses gained the possibility to connect over the past four rounds while work is ongoing for about 10,000 more addresses.
According to a study completed last year at the request of the Ministry of Economic Affairs and Communications, there are still more than 120,000 addresses in rural Estonia without a fixed connection of at least 100 Mbit/s. Building a fiber optic connection will cost an estimated €800 million or more.
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