Bringing high-speed Internet to people requires clearer prioritisation and better overview of demand

2/15/2022 | 10:00 AM

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TALLINN, 15 February 2022 – Bringing high-speed Internet to Estonian people in more sparsely populated market failure areas requires clearer choices about where to take high-speed Internet first and better information on who are waiting for connection and when connection could reach them. The current policy of the Ministry of Economic Affairs and Communications to build as many access points as possible as cheaply as possible without regard to requests is not an efficient use of funds, the National Audit Office finds in its audit report published today.

Despite the 35 million euros allocated and various measures taken to develop the broadband network, the availability of high-speed Internet in market failure areas has fallen significantly short of the targets set. The goal to take high-speed, i.e. at least 30 Mbit/s, Internet to all Estonian people has shifted first from 2015 to 2020 and now to 2030. It was also planned that by 2020, user contracts for ultra-high-speed, i.e. 100 Mbit/s or higher, wired Internet would make up 60 per cent of all user contracts. In reality only a quarter of contracts are for this speed.

“It turns out that with state support, access network has been built, among others, where there is little demand for it and the proportion of subscribers to the Internet access network is very small,” said the Auditor General Janar Holm. “It is far from being used wherever there is a possibility to join because the speed of the existing connection is sufficient for the user and faster connection would require further expenditure that the consumer is not ready for.” As of November 2021, access to nearly 13,000 address sites had been built in the first stage of building the access network. Of these, more than 3,500 customers (28%) have subscribed to the access network, and 2,660 customers (21%) have started using the Internet service.

According to Holm, it can be seen, however, that those who might be interested in high-speed Internet connection and whose connection at home is slow or near-existent, particularly in remote areas, do not have access to enough information about when high-speed broadband connection might reach them because information about this is only available one year in advance. “Those who want it are not always offered it, and those who are offered it do not always want it,” the Auditor General Janar Holm characterised the situation.

The Ministry of Economic Affairs and Communications (MEAC) has identified more than 200,000 address sites in market failure areas to which ultra-high-speed Internet access network points should be built, but it is not clear how to get there. In the first stage of the development of broadband connections, 20 million euros will be used for grants during the period 2019–2023, with the help of which Enefit Connect OÜ is to build an access point to more than 40,000 address sites. In the first three years, less than half of this plan has been achieved – access network has reached about 15,000 addresses. Thus, there is a risk that the network builder Enefit Connect OÜ will not be able to meet the plan by the deadline. The second stage of the development of broadband connections was launched in 2020 when the government allocated additional funds to telecommunications companies for the development of broadband access network. Under the so-called infrastructure measure, the plan was to build a connection to 7,300 address sites, but in reality, network builders completed 5,900 connections. Support in the amount of 7.4 million euros was used for this purpose.

In addition to the funds allocated in the first and second stages, 69 million euros is planned to be used for building access network points during the European Union support period that started. If an overhead line solution on electricity poles is planned to be used for construction, the MEAC estimates that approximately 27,000 connection points could be built (13.5% of all addresses in the market failure area). Even this may not be possible with the increased building costs. However, building an access network with an underground cable is twice as expensive and the number of connections to be built even smaller. In conclusion, the funds already allocated and the funds of the next European Union support period are not enough to build an access network to 200,000 address sites located in the market failure area.

Therefore, in the opinion of the National Audit Office, the Ministry should prepare a realistic plan. For this, it should be established how to reach households without a high-speed Internet connection identified by the MEAC and achieve the objectives set out in the development plan “Estonian Digital Society 2030” by supporting the construction of broadband access network points with the state budget and European Union support funds. This plan should, among others, describe the need for support, incl. construction of the access network to which address sites needs to be supported. It should also include an action plan, construction priorities, timetable, support measures, financial plan, possible technological solutions. The Ministry should continuously analyse the ongoing and completed support measures in order to draw conclusions for improvements and changes to long-term plans. It is also necessary for the Consumer Protection and Technical Regulatory Authority to regularly map market failure areas for the establishment of a fixed Internet connection and include the respective data on the online map.

The National Audit Office finds that clear priorities should be set for the construction of high-speed Internet access network and access points should, as a matter of priority, be built in areas where it has been requested the most. The audit revealed that neither the MEAC nor the Consumer Protection and Technical Regulatory Authority know how many households do not have a fixed wired Internet connection and where the coverage of the mobile communication network is non-existent or poor. The availability of such information would allow to plan, as a matter of priority, the building of access points to those who have the greatest need for high-speed Internet. At the same time, the Ministry also does not have information on requests for high-speed Internet. Therefore, the Ministry is unable to take the requests of people into account in planning access points and build connection points first for households who have expressed their desire to subscribe to high-speed Internet. To improve the situation and plan and build access networks more efficiently, the MEAC needs to collect information on households that have requested access to high-speed Internet connection. Appropriate technological solutions (e.g. mixed solutions of fixed and radio connection) for households where there is no fixed wired Internet connection at all and where the coverage of the mobile communication network is poor and support measures necessary for financing such construction should be developed.

Background

The availability of high-speed Internet to each and every Estonian resident has been in the plans of the state for the last two decades. According to the new development plan “Estonian Digital Society 2030” approved in 2020, ultra-high-speed, reliable and affordable telecommunications connection that allows creating and using innovative services should be available in Estonia, regardless of the location, by 2030. In the previous audit report “Effectiveness of the development of a broadband network or high-speed Internet” published in 2015, the National Audit Office decided that because the state does not have a clear action plan, it would be difficult to make high-speed Internet available to all Estonian residents by 2020. The report also pointed out that the state has invested primarily in the construction of the basic broadband network and neglected making high-speed and ultra-high-speed Internet available to homes and institutions.

Priit Simson
Head of Communications of the National Audit Office of Estonia
+372 640 0102
+372 5615 0280
priit.simson@riigikontroll.ee
press@riigikontroll.ee
http://www.riigikontroll.ee/

  • Posted: 2/15/2022 10:00 AM
  • Last Update: 2/14/2022 11:44 PM
  • Last Review: 2/14/2022 11:44 PM

Access network has been built, among others, where there is little demand for it and the proportion of subscribers to the Internet access network is very small.

CARO / Scanpix Baltics

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