Broadband strategy for Sweden - Government Offices of Sweden

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					Broadband strategy for Sweden

                            Government Offices
                                of Sweden
                                CONTENT




FOREWORD ...................................................................................................................2

EXECUTIVE SUMMARY ..............................................................................................3

INTRODUCTION .........................................................................................................4

SWEDEN HAS A STRONG POSITION.....................................................................9

PRESENT –DAY CHALLENGES FOR THE FUTURE..........................................12

BROADBAND TARGETS ...........................................................................................14

ACTION AREA 1: FUNCTIONING COMPETITION ........................................19

ACTION AREA 2: PUBLIC-SECTOR PLAYERS IN THE MARKET .................22

ACTION AREA 3: SPECTRUM USE ........................................................................26

ACTION AREA 4: RELIABLE ELECTRONIC COMMUNICATION
    NETWORKS ........................................................................................................29

ACTION AREA 5: BROADBAND THROUGHOUT THE COUNTRY ...........31

EVALUATION AND FOLLOW-UP OF THE STRATEGY....................................36




                                                                                                                   1
                                   FOREWORD



Sweden is today a leading IT nation and compares well internationally in terms of both use of
IT and access to broadband. IT, the Internet and broadband are significant to the development
of a sustainable society. They are essential in order to attain policy objectives in several areas of
society: entrepreneurship, environment, education, health and social care and administration. In
its report "Beyond the Crisis", the Globalisation Council points out that the digital
infrastructure is crucial to growth and says that the aspiration should be for Sweden to be the
most widely connected and advanced country in the world when it comes to electronic
communication.

The challenge for Sweden, and other countries, is to exploit the opportunities presented by
development. This entails increasing the use of IT throughout society in order to boost Swedish
competitiveness, growth and innovation, while ensuring sustainable development. The EU
Member States have highlighted the challenge under the Lisbon Strategy, the EU’s strategy for
sustainable growth and employment. Promoting the use of IT is an important element of the
Lisbon Strategy, and several IT policy strategies have been adopted at the European level.
National IT policy is pursued alongside EU efforts.

The Swedish Government accepts the challenge and is now taking a new approach to broadband
policy, adapted to the current situation and future challenges. Sweden is one of the few
countries in the world to have had a broadband policy since the late 1990s. However, the policy
of support that has been pursued to date has become outdated, and a new broadband policy is
now required, with a clear political focus closely related to the market. The Government is
continuing its efforts to improve competition and market condition through its broadband
strategy.

But everyone has a responsibility for the development of broadband: users of IT, market players
and the public sector. Development must be market driven. The role of central government is to
ensure well functioning markets and favourable business conditions throughout the country.

On the basis of the broadband strategy, I firmly believe that we can work together to provide
Sweden with world-class broadband.




Åsa Torstensson
Minister for Communications

2
                    EXECUTIVE SUMMARY



The Swedish Government presents a Broadband Strategy for Sweden that clarifies the policy
focus: a broadband policy adapted to the situation and challenges we face. The Government is
continuing its efforts to improve competition and conditions for market players through its
broadband strategy.

The overall objective for Sweden is to have world-class broadband. A high usage of IT and the
Internet is good for Sweden, in relation to growth, competitiveness and innovation. It
contributes to the development of a sustainable society. It also helps in meeting challenges in
the shape of increased globalisation, climate change and an ageing population in a scarcely
populated country. To meet the challenges it is essential to have access to high-speed broadband
throughout the country. That implies that ninety per cent of all households and businesses
should have access to broadband at a minimum speed of 100 Mbps in 2020. Forty per cent
should already have access to broadband at that speed by 2015. It is important that Swedish
businesses and households in all parts of the country are able to benefit from the opportunities
that access to powerful broadband gives. In order to change traditional working methods,
enable development of new services and business models and new patterns of behaviour.

All households and businesses should also have good opportunities to use electronic public
services with broadband access. As more and more services in society become digital, everyone
must be given the opportunity to be connected. Everyday life should run smoothly: It is, in
essence, a matter of democracy and rights.

The underlying principle is that electronic communication services and broadband are provided
by the market. The Government should not control the market or technical development. Our
task is to establish good market conditions and eliminate obstacles to development. This entails
ensuring that there is a relevant regulation in place.

To meet the targets and providing the market with the necessary conditions to deliver services
and to invest in broadband throughout the country, the Government proposes initiatives in
several areas. These include providing good conditions for competition, a revised model for
spectrum management and promoting investments in broadband in more remote areas. It is
important that the Telecoms Package is implemented in Swedish legislation. The municipalities
planning responsibility is clarified by strengthening the focus on electronic communications in
the Planning and Building Act. The Government intends to initiate a Broadband Forum for
collaboration and dialogue on the deployment of broadband. It is also proposed that the
Swedish Post and Telecom Agency will be assigned to investigate how suitable frequency bands
for electronic communications can be used for increased availability in areas that lack access to
broadband or have broadband of low capacity and quality. The level of functional access to
Internet within the universal service obligation will also be reviewed.
                                                                                               3
                                     INTRODUCTION




IT, and the Internet in particular, together probably are the most revolutionary innovation of
modern times. IT and the Internet are of great significance to society, and it might be thought
that the integration of technology into everyday life has come a long way. However, the process
of change has only just begun and will continue for decades. Regardless of what is waiting
around the corner in terms of new services and uses, it is of the greatest importance to create
the very best conditions so that development can be exploited in all parts of the country.

With the aid of IT, the Internet and broadband, traditional ways of working can be changed,
new services and business models can be developed and changed patterns of behaviour can
emerge. A high level of use in all parts of society contributes to the development of the
knowledge-based society. IT and good electronic communications are essential for enterprise,
employment and efficient administration and to enhance the possibilities to live in and visit
rural areas.1 They are also essential for the realisation of the Government’s action plan for e-
government.2

It is crucial for the usage that the general public have confidence in IT and the Internet in
particular. In order to grasp the opportunities of IT companies, organisations and individuals
must be able to rely on the networks and that the information and services provided are reliable.



How IT is used

IT is used extensively in Sweden, and around 89 per cent of the population had access to the
Internet at home in spring 2009, 83 per cent had broadband. A large proportion of businesses,
90 per cent, used the Internet and had a broadband connection. Small businesses (with 1-9
employees) used the Internet to a lesser extent, around 85 per cent, and 74 per cent of these had
broadband. 3

Individuals today use the Internet and broadband principally to search for information, to
obtain news and to shop. The communication is mainly one-way and links businesses with




1 A strategy for strengthening the development capacity of Sweden’s rural areas, Government Communication 2008/09:167
2 National action plan for Swedish e-government
3 Statistics have been taken from user surveys conducted by Statistics Sweden


4
customers and authorities with citizens. However, the trend is towards an increased element of
two-way communication, with users who both consume and produce content in interactive
networks. Usage is dominated by network communities, blogs, file-sharing and other social
media. Another trend is an increased consumption of digital media and entertainment such as
music, television, video clips and various video services.

How businesses use the Internet and broadband varies from one sector to another. Businesses
do everything from sending and receiving documents and dealing with administration to having
large parts of their business online and participating in virtual networks. The scale of e-
commerce has increased in recent years. Many businesses choose to store information and have
access to programs through the Internet which make them accessible regardless of location.
There is an increasing demand for mobility and access to different services at any time and
anywhere. Apart from businesses using the Internet and broadband as a tool there are also
businesses who’s concept is based on the Internet. When new Internet-based services and
business models are developed, they increase usage further.

In the public sector, use of the Internet has increased due to the possibilities of providing better
and more efficient services to citizens. The vast majority of authorities today have web services
for citizens and companies. Examples are the electronic services of the Swedish Tax Agency and
the Swedish Social Insurance Agency for tax returns, applications for sickness benefit etc. In
many municipalities members of the public can use the Internet to choose pre-school,
primary/lower secondary school or upper secondary school, communicate with the health
service or to apply for financial assistance or a building permit. The significance of IT and
broadband will increase, particularly in school, where teaching is becoming increasingly
dependent on IT and the Internet, and with an ageing population requiring IT-based services to
be developed for home-based care.

The use of IT is not just part of everyday life for most businesses, organisations and citizens, it
also has a great impact on growth, competitiveness and the development of a sustainable
society.



Growth and competitiveness

Several studies show that investments in IT and broadband have been favourable for social
development and that countries that have invested heavily also have experienced higher
productivity.4 Statistics from Eurostat (KLEMS)5 show that the IT sector in the EU accounted
for 40 per cent of total growth over the period 1995 to 2004, of which the telecoms sector
contributed with 27 per cent. Investments in broadband networks affect growth in several ways.
A good infrastructure encourages other new and replacement investments. The competitiveness
and productivity of businesses can consequently increase through more efficient production of
goods and services, logistics and new business processes. Collaboration is made easier, and it is
possible to have closer customer and supplier contacts. The level of knowledge among the
population rises as it is easier to convey and obtain information for example through the
Internet. Broadband enables businesses and the public sector in all parts of the country to give
people a higher level of service.




4 Riksbank, Penning och valutapolitik (Monetary and foreign-exchange policy) 2/2009
5 Eurostat (KLEMS) www.euklems.net
                                                                                                  5
Sweden’s combined national growth depends on the growth created locally and regionally.
Competitive regions and individuals are essential for a competitive Sweden. An efficient and
reliable infrastructure for broadband promotes regional development and contributes to
providing the conditions that are necessary for sustainable growth throughout the country. 6



Sustainable growth

Economic growth should be sustainable without jeopardising the ecosystems we are all
dependent on. Human resources should be safeguarded. The Swedish Government has set a
target for Swedish carbon dioxide emissions to decrease by 40 per cent by 2020. IT has the
potential to offer large energy savings throughout the economy. Studies show, for example, that
monitoring and control using IT can reduce energy use in buildings by up to 17 per cent and
reduce carbon dioxide emissions in transport logistics by up to 27 per cent. With ’smart power
networks' it is possible to control electricity consumption dynamically, resulting in energy
savings and more efficient investments. ‘Smart electricity meters’ which provide consumers
with information about energy use can reduce consumption as well as network operators’
energy losses.7

Access to broadband also makes it easier to work remotely and enhance the possibilities to
launch and run businesses in all parts of the country. This reduces travel and means that people
are able to work where they live instead of having to live where they work. Another example of
energy saving with the aid of IT is the increased use of cloud computing. This means that
businesses and organisations make use of service providers instead of having their own servers
and applications. Merging applications over the Internet in this way reduces total energy
consumption, while the availability of services is increased.




6 En nationell strategi för regional konkurrenskraft, entreprenörskap och sysselsättning 2007 (A national strategy for regional
competitiveness, entrepreneurship and employment 2007), N2007/7152/RT
7 Addressing the challenge of energy efficiency through information and communication technologies, COM(2008) 0241
6
Some examples


Consumers                                                    Ordinary farms now need to have broadband access.
More and more people are using the Internet in almost        This is the simplest way of using the Central Livestock
all aspects of their everyday lives.                         Database (CDB) and other similar databases required in
It is a channel for consumption where people find and        agriculture. The CDB is located at the Swedish Board of
listen to new music, radio, podcasts and television - what   Agriculture and has to be used for the receipt of EU aid.
they want and when they want. But it is also a channel       All events relating to each individual animal have to be
for production. The Internet has become a way for            reported within seven days, for example moving to
people to reach out to the whole world with material         different pastures, slaughter, calving, insemination,
they have produced themselves, free of charge. This has      diseases and breeding. It is easiest to do this over the
led to the boundaries between producers and consumers        Internet. Many farmers also need up-to-date weather
having become blurred. The social elements of the            forecasts so that they know whether it is the right day to
Internet are becoming ever clearer. The Internet is used     cut hay or harvest a crop, for example.
to keep in contact with friends and family, to share
information and links to various social networks and to      Another example is a business in a remote rural area of
publish texts, become involved in public debate and          northern Sweden that provides tertiary education, where
organise oneself in relation to views and interests. The     jewellery and stone products are produced and where
social aspects of the Internet have shifted power to the     there is tourism. Tertiary education in particular requires
individual in the latter's role as a citizen and consumer.   high-capacity broadband, as large parts of the theoretical
                                                             courses are given by distance-learning.
Broadband creates completely new opportunities for
people with disabilities. Video telephony for the deaf is    Health care
an example.                                                  The Stockholm Health Care Guide (Vårdguiden) and
                                                             1177 are examples of ways in which IT and broadband
Businesses                                                   are used in the public sector. The Stockholm Health
Broadband access is required in most businesses for          Care Guide and 1177 are the web service used by the
contacts with customers, suppliers and authorities. More     county councils and regions to provide citizens with
and more businesses are choosing mobile office               information, advice and contact with the health and
solutions. The objective is for staff to be able to do       medical services. By using the My health care contacts
everything on the move that they can do at their office      service, patients can contact their health care provider,
workplace, for example reading and answering e-mail,         for example to cancel and re-book appointments, renew
accessing the company's ordering system and databases        prescriptions and ask questions. In Västra Götaland
and taking part in videoconferences. The mobile office is    patients can also take a picture, for example of a tick bite
expected to produce savings in the form of higher staff      or rash, and send it by MMS message to a skin specialist.
productivity and reduced travel.                             Medical information about a possible diagnosis and
                                                             treatment arrives within 24 hours.
Another growing phenomenon is cloud computing.
Businesses outsource software, computer capacity,            School
storage space and other IT to a third party. It then         IT is used in school for everything from producing
becomes available to the users through the Internet,         personal timetables for pupils to sending SMS text
generally as a subscription service, contributing to new     messages to parents in the event of truancy. In some
ways of working and increased availability for the users.    schools all pupils have a computer of their own, which is
                                                             used routinely in all subjects. The pupils learn to use the
Businesses in various types of rural areas                   technology for instance for reports, feedback and
There are several examples of companies whose business       coursework. The pupils can easily obtain information,
concept requires access to high-capacity broadband.          submit assignments and take part in discussion forums
                                                             on the school intranet.
One such example is a company that manufactures
electronic support functions for industrial firms. Its       Lectures from the world’s leading educational
production relates to devices for monitoring, remote         institutions posted on the Internet for anyone to
control, programming and control systems. A high-            download offer enormous opportunities to broaden and
capacity connection is essential as large files are sent,    deepen learning. In addition, completely new
remote programming takes place and there are various         opportunities are created for contacts between pupils
types of support and remote control.                         across national boundaries and continents.




                                                                                                                        7
The work of the Swedish Government on IT in some areas

The Government works on IT issues in several areas of        themselves. The Schools Act does, however, stipulate
society in which the use of IT and broadband access          that pupils in primary/lower secondary school and
plays a significant role. Further information on these       students in upper secondary school must have free access
areas can be found on the Government website                 to books, stationery, tools and other aids required for
(www.sweden.gov.se).                                         contemporary education. The primary and lower
                                                             secondary school curriculum additionally stipulates that
Government – The Government is working on the                on leaving school every pupil must be able to use IT as a
development of the government administration of              tool for knowledge searching and learning. To support
tomorrow in order to improve the service provided by         the work of the responsible authorities on IT, the
government agencies to citizens and businesses. It           National Agency for Education has been tasked with
should be made as easy as possible for as many people as     promoting the development and use of IT in preschools,
possible to exercise their rights and fulfil their           schools and organisations and among authorities
obligations and make use of the services provided by         responsible for schools. The National Agency for
public administration. A delegation for e-government         Education also has to be able to continuously follow up
has been appointed to pursue this work.                      the IT use and IT skills of children, pupils and teachers.

Health – The national IT strategy for health and social      Universities and colleges – The enhanced opportunities
care drawn up by central government, municipalities and      for communication contribute to universities and
county councils makes clear that health and social care      university colleges being able to offer distance teaching.
can be improved through increased investments in e-          The number of students who either only undertake
health. With e-health services the challenge of a growing    distance study or combine campus-based and distance
and ageing population that demands more care can be          studies has increased in 10 years from around 30 000 to
met while also improving the quality and effectiveness of    around 100 000 and today represents approximately 25
health care.                                                 per cent of all students. Around 80 per cent of those who
                                                             are only engaged in distance studies are part-time
Enterprise – The Government wishes to break exclusion        students.
from the labour market, strengthen Swedish
competitiveness and create the necessary conditions for      Science – With the aid of IT, science can tackle problems
jobs in more and growing companies. Infrastructure that      with a scope and complexity that cannot be handled
works well, in the areas of both transport and IT, is        without this technology. E-science is relevant in virtually
important in order to achieve these objectives. Using        all scientific fields. An important factor is the possibility
modern information technology and broadband in a             of utilising geographically dispersed resources, both
strategic way provides both competitive advantages and       technical and human. SUNET has a significant role to
efficiency gains.                                            play here in linking Swedish universities to European and
                                                             American university networks. The aim is for all the
Regional growth – Increased availability is something        world’s research-intensive universities to be connected
that should be aimed for in order to achieve regional        by high-speed links in order to facilitate scientific
competitiveness, entrepreneurship and employment. The        cooperation.
Government highlights An Advanced Information
Society as an important action area. Potential for growth    Influence – Effective communication systems make it
throughout the country can be reinforced by                  possible for ever more citizens to take part in democratic
strengthening local and regional competitiveness and         dialogue. Use of the Internet for communication
creating better conditions for enterprise, innovations and   between members of the public and politicians is
investments. Access to public services and broadband         becoming ever more important. All citizens must have
that works well across the whole country is important in     this opportunity to participate democratically.
order to achieve this.
                                                             Inclusion – Availability of IT improves the prospects of
School – IT has had an impact on development in the          people with disabilities studying, working and
area of education, and new technology is opening the         independently coping with daily living. IT development
way to new forms of learning. Swedish schools are            creates good opportunities to improve the service
subject to the goals set out by central government in the    provided to people who need adapted solutions and
Schools Act, curricula, syllabuses and other regulations.    advanced new services. In August 2009 the Swedish
On the other hand, central government does not specify       Agency for Disability Policy Coordination (Handisam),
how these goals are to be achieved, this being determined    in response to a Government remit, submitted material
instead by the responsible authorities and the schools       for an action plan relating to e-inclusion.




8
       SWEDEN HAS A STRONG POSITION



Sweden has a strong position with regard to IT use and broadband. The usage of these
technologies are extensive, and the country tops several world rankings for IT development.
Sweden has a top position in the rankings made by both the Economist Intelligence Unit and
World Economic Forum and in the EU’s Broadband Performance Index8 . According to
OECD statistics, Sweden comes seventh in terms of the number of broadband subscriptions
per 100 population. If wireless broadband was also included, Sweden would rank even higher.

Sweden has a strong IT and telecom sector and a good tradition of research and innovation,
which has resulted in new services, products and leading companies. It was in Sweden, for
example, that modern mobile telephony, NMT and GSM were invented and developed. A high
proportion of the labour force is employed in the IT sector or in IT-related occupations in
other sectors. This sector also strengthens other key industries in Sweden, such as the
automotive, pharmaceutical and engineering industries.

There are leading companies in Sweden today for example in communication systems, software
for mobile phones, industrial IT, positioning and visualisation. Several companies offering
Internet-related services and based on new business models also originate in Sweden.
International IT and telecom firms use Sweden as a development and test market for new
products and services. This has been prompted by Sweden having a high level of education, a
high level of use of IT and an overall interest in new technologies as well as good access to
broadband.



Access to broadband

Access to broadband is generally good in Sweden. Infrastructure for broadband is provided by
both private operators and public-sector players such as municipal city networks and the
National Rail Administration (Banverket). Services for households and businesses are mostly
provided by private operators. Access to broadband may be wired, in which case it is delivered
through the fixed telephone network, a cable television network or a fibre-based network, or it
may be delivered wirelessly, for example through a wireless network. With different access
technologies it is possible to offer broadband services such as Internet access with varying
content and characteristics. Sweden is one of the countries in Europe with the highest




8 In COM(2008) 594 the Commission presents the Broadband Performance Index, which compares broadband development
in the Member States with regard to speed, price, coverage in remote and rural areas, innovations and other socio-economic
factors.


                                                                                                                        9
proportion of broadband subscriptions through fibre and wireless networks. A well deployed
fibre infrastructure is essential for the expansion of both fixed and wireless networks. Wireless
networks additionally provide added value in the form of greater mobility.

The network that reaches most households and businesses is the fixed telephone network which
offers broadband using xDSL technology. Nearly 98 per cent of households and 95 per cent of
businesses are reached by this network. Other nationwide broadband networks are the wireless
3G networks, which together cover 99 per cent of the population. Cable networks and the
fibre-based networks are found primarily in urban areas, and around 30 per cent of households
and businesses are located within 250 metes of a building with such access. However, in areas
located for example outside the coverage of the wireless networks, in a radio shadow or far away
from a mobile base station it may be impossible to obtain broadband that works well in practice.
At present around 5 per cent of the population that are reached by the fixed telephone network
are unable to obtain a broadband subscription in practice. It is estimated that around 10 per cent
who are covered by wireless networks cannot receive stable and functioning broadband through
the wireless network. This means that thousands of households and businesses in practice
currently do not have access to broadband.


Geographical differences

Sweden has specific geographical conditions, as a country that is large in area with a relatively
small population who mostly live in urban areas. Around 85 per cent of the population live in
urban areas, while 3 per cent live in small towns and around 12 per cent are scattered around
rural areas. Investments in infrastructure are expensive and necessitate a certain customer base
to be profitable. As a result of the geographical structure, the prospects for investments in
broadband are poorer in more sparsely populated areas. The need for broadband is, however,
just as great in these areas as in other parts of the country.

While wireless broadband and broadband via the fixed telephone network (xDSL) exist virtually
throughout the country, fibre access and, to an even great extent, broadband through cable
networks are focused on larger urban areas. In more densely populated areas it is also possible to
obtain and use broadband with higher speeds. Around 83 per cent of those who live in rural
areas can obtain a subscription through the fixed telephone network (xDSL), while the
equivalent proportion for those living in urban areas is 97 per cent. Rural areas in northern
Sweden in particular have poor access to fixed broadband. It is symptomatic of this that a third
of small and medium-sized businesses in these areas have dial-up modem access, while the
equivalent proportion for the whole of Sweden is 2 per cent. It is estimated that almost 88 per
cent of those living in rural areas can have a wireless broadband subscription, which is equivalent
to the proportion for those living in urban areas, but there are fewer operators and networks
offering wireless broadband in rural areas. It is possible that satellite-based broadband solutions
may gradually become an alternative in these areas.




10
                                         Facts about electronic communications
Turnover and investments                                                                                                                        Figure 3 Subscriptions and use of mobile telephony
Turnover in the electronic communication sector was SEK 49.5 billion in                                                                                      12 000                                                                                     3

2008. In nominal terms, turnover has changed marginally in recent years
(see Figure 1). Investments in infrastructure have decreased by 18% since                                                                                    10 000                                                                                     2,5

2003, and fell by 9% in 2008 (see Figure 1).
                                                                                                                                                              8 000                                                                                     2


Figure 1 Turnover and investments in the market




                                                                                                                                                Thousands



                                                                                                                                                                      Minutes
                                                                                                                                                              6 000                                                                                     1,5
                60 000

                                                                                                                                                              4 000                                                                                     1
                50 000

                                                                                                                                                              2 000                                                                                     0,5

                40 000

                                                                                                                                                                 0                                                                                      0
Million SEK




                                                                                                                                                                                 2002    2003      2004       2005       2006       2007        2008
                30 000
                                                                                                                                                                                          Subscriptions and pre-paid cards for mobile packet data
                                                                                                                                                                                          Other subscriptions and pre-paid cards
                20 000                                                                                                                                                                    Average length of call per mobile telephony subscription


                                                                                                                                                Internet and broadband
                10 000
                                                                                                                                                89% of the Swedish population have Internet access at home. The EU
                                                                                                                                                average is 49 %. Around 90% of businesses use the Internet and have
                       0
                               2001          2002            2003          2004          2005          2006            2007       2008
                                                                                                                                                broadband access. Small business have a lower rate of use, with around
                      Mobile call services and mobile data                         Fixed call services (excl. dial-up access)                   85% having Internet access and 74% having broadband. The total number
                      Internet service                                             Data communications services
                      Investments                                                                                                               of broadband subscriptions has increased sharply in recent years,
                                                                                                                                                principally as a result of the strong growth in wireless broadband and
Fixed telephony                                                                                                                                 fibre-LAN. The rate of growth in xDSL is declining (see Figure 4).
88% of households in Sweden have a fixed telephony subscription. The
EU average is 70%. The total number of fixed telephony subscriptions is                                                                         Figure 4 Number of subscriptions to broadband by access
declining, probably because ever more people are choosing to replace fixed                                                                      technology
with wireless telephony. Alongside this decline, the number of fixed                                                                                         4 000
telephony subscriptions based on IP technology is increasing (see Figure                                                                                     3 500
2). TeliaSonera (68%), Tele2 (12%), Telenor (7%) and Com hem (6%) are
the biggest players in the fixed telephony market.                                                                                                           3 000

                                                                                                                                                             2 500
                                                                                                                                                 Thousands




Figure 2 Fixed telephony subscriptions                                                                                                                       2 000

              7 000                                                                                                                                          1 500

                                                                                                                                                             1 000
              6 000
                                                                                                                                                               500
              5 000
                                                                                                                                                                  0
                                                                                                                                                                                 2000    2001       2002       2003       2004       2005       2006     2007       2008
 Thousands




              4 000
                                                                                                                                                                                Mobile broadband        DSL       Fiber and fiber-LAN           Cabel       Other

              3 000                                                                                                                             The proportion of the Swedish population with subscriptions to fixed
              2 000
                                                                                                                                                broadband is 32%. The OECD average is 32%, and the average for
                                                                                                                                                Sweden’s Nordic neighbours is 34%. Apart from Japan and South Korea,
              1 000                                                                                                                             Sweden is the OECD country with the highest proportion of fibre and
                                                                                                                                                fibre-LAN subscribers out of all fixed broadband subscribers (20%). In
                  0
                  2000              2001            2002            2003          2004          2005             2006           2007     2008
                                                                                                                                                urban areas 99.9% of the population and 99.8% of businesses in Sweden
                                                                                                                                                are within 250 metres of a building with fixed broadband. Outside urban
                                                 PSTN          ISDN          IP-based telephony                Total
                                                                                                                                                areas and small towns the equivalent proportion is 87.7% for the
Mobile telephony                                                                                                                                population and 85.2% for businesses. The whole inhabited area of Sweden
96% of the Swedish population (between the ages of 16 and 75) use                                                                               is in principle covered by networks for wireless broadband, but quality and
mobile phones. The EU average is 83 %. The total number of active                                                                               capacity vary depending on technology, distance from mast, number of
mobile phone subscriptions is increasing and was totalling 10 million at                                                                        simultaneous users etc. The four biggest players in the broadband market
the end of 2008 (see Figure 3, primary axis). The average number of calls                                                                       are TeliaSonera (39%), Telenor (20%), Com hem (13%) and Tele2 (9 %).
per subscriber and the average number of minutes per call are also rising
(see Figure 3, secondary axis). The number of outgoing minutes in mobile                                                                        Next generation networks (NGN)
telephony networks is expected to exceed that in fixed networks for the                                                                         NGNs are an ongoing technological development in which the networks
first time in 2009. The biggest players are TeliaSonera (42%), Tele2 (32%),                                                                     are upgraded with fibre ever closer to the end-user so that higher speeds
Telenor (18%) and HI3G (7%).                                                                                                                    can be offered. Terms such as FTTH (fibre to the home), FTTB (fibre to
                                                                                                                                                the building) and FTTC (fibre to the curb) are used. Wireless technologies
Broadband technologies                                                                                                                          are being developed in parallel to provide higher speeds and better
xDSL: Used in the fixed (copper-based) telephone network to offer                                                                               utilisation of spectrum. An example is LTE (Long Term Evolution), which
broadband services.                                                                                                                             in the longer term is expected to replace present-day GSM and 3G
Fibre: Access based entirely or partially on optical fibre.                                                                                     technology.
Cable: A return-activated cable network can offer broadband services.
Wireless broadband: A collective name for broadband services delivered
                                                                                                                                                Source: Swedish Post and Telecom Agency and Statistics Sweden.
through the wireless networks (HSPA and CDMA2000).




                                                                                                                                                                                                                                                                    11
 PRESENT–DAY CHALLENGES FOR THE
             FUTURE



Although access to broadband today is relatively good, the market is constantly changing. The
technology will develop rapidly over the next few years. This trend is driven among other things
by
-          increased demand for and supply of broadband with higher speeds in order to be able to
           offer and benefit from new and more demanding services over the Internet,
-          increased traffic volumes as we spend more and more time on the Internet and more and
           more data is transferred between applications and/or individuals,
-          an increased need for mobility and reliable Internet connections to make access to services
           possible at any time and anywhere, and
-          the opportunity for operators to make cost savings as new technology is more resource-
           efficient.


Projected increase in traffic for Western Europe 2008-2015

          IP-traffic                                                                                          Rate of growth (indexed)
30 000                                                                                                                               1000



                                                                                                                                     900

25 000
                                                      IP traffic (Peta byte)                                                         800

                                                      Rate of growth (indexed)
                                                      Extrapolation of CISCO forecast                                                700
20 000

                                                                                                                                     600



15 000                                                                                                                               500



                                                                                                                                     400

10 000
                                                                                                                                     300



                                                                                                                                     200
  5 000

                                                                                                                                     100



     0                                                                                                                               0
                  2008       2009              2010                   2011              2012   2013   2014*             2015*

Source: Swedish Post and Telecom Agency 2009

12
There is a need for large investments in new infrastructure and more efficient technology to
meet market demand and requirements for access to high-quality broadband. Ongoing
technological development will require significant deployment of fibre networks and upgrading
of both fixed and wireless networks with new technology. Wireless broadband also necessitates
a well deployed fixed fibre based network or powerful radio link to enable high capacities to be
provided to users. How Sweden responds to these needs will have an impact on the use of IT
and the possibility, with the aid of IT, of attaining policy goals for sustainable growth,
competitiveness, environment and climate, more efficient welfare services and everyday life that
functions smoothly for citizens throughout the country.

Technological development is making the issue of what is required to make large infrastructure
investments topical. When market players make investments in new infrastructure and
technology it is principally the demand from customers, their willingness to pay and the
competitive situation that will influence when and where the investments are made. The
challenge is to bring about functioning competition and to provide market players with the
conditions they need to invest, so that the investments are made broadly and across the whole
country.

Another issue that is becoming topical is what as known as the digital divide. There is greater
interest in making investments in densely populated areas, while the challenge is greater in the
remote parts of the country where conditions for deploying infrastructure and upgrading
technology are less favourable. Broadband through the fixed telephone network dominates in
rural areas. This network is being partly eliminated as old and obsolete parts of it result in
excessive operating costs. The vast majority will be able to obtain wireless broadband through
the market, but there is a risk that the number of businesses and households lacking access to
high-capacity broadband may increase. Another challenge is that the gap between a majority
who have access to fast broadband and households and businesses in other areas that have to
settle with significantly slower broadband may widen. There is also a danger of the proportion
of services on the Internet that cannot be utilised by those with slower broadband rising.

Another challenge, from the point of view of regional growth, is the ongoing change in
commercial and public services in various different rural areas which is driven by changed
patterns of demand, technological development and the possibility of cost savings and efficiency
improvements. Initiatives aimed at ensuring good access to services are important in creating an
environment which is both attractive to live in and conducive to launching and running
businesses. Good access to IT and broadband also creates opportunities for entrepreneurs
throughout the country. Taken together, this also strengthens development capacity in rural
areas of Sweden. With the aid of IT and broadband it is possible to develop new collaborative
arrangements between service providers so that everyone gains access to publicly funded
services regardless of where they live. If households and businesses have access to broadband,
poorer physical access may be replaced by higher-quality access to services through the
Internet.

Another important component of access to broadband is that individuals and businesses adopt
the new technology and services and that all groups in society are given an opportunity to use
them. Advanced use is essential if Sweden is to be able to reap the benefits of electronic
communication services at the same time as demand for broadband is increased.




                                                                                             13
                       BROADBAND TARGETS




 Sweden shall have world-class broadband.

 The Broadband Strategy aims to give the market players the possibilities to accomplish
 the following broadband coverage:

 In 2020 should
 -      90 per cent of all households and businesses have access to broadband at a minimum
        speed of 100 Mbps.

 In 2015 should
 -      40 per cent of all households and businesses have access to broadband at a minimum
        speed of 100 Mbps.

 All households and businesses should have good opportunities to use electronic public
 services with broadband access.

 The market players will do the investments in infrastructure. The Governments task is
 to strive for well functioning markets and give market players good business conditions
 through suitable regulation.


Why new targets?

Swedish broadband policy and the initiatives taken to date have been based on the conditions
prevailing in the late 1990s. The Government at that time judged that households and
businesses in all parts of the country ought to have access to high-speed IT infrastructure
(broadband) within the next few years.9 An IT policy bill from 2005 presented the target of an
efficient and secure high-speed IT infrastructure being available in all parts of the country,
among other things to provide people with access to interactive public e-services.10 This would




9 An Information Society for All (Government Bill 1999/2000:86, Report 1999/2000:TU19, Parliamentary Communication
1999/2000:256)
10 From an IT Policy for Society to a Policy for the Information Society (Government Bill 2004/98:175, Report
2005/06:TU4, Parliamentary Communication 2005/06:142).
14
be achieved through market-based deployment and be supplemented by support in 2001-2007
for the deployment of broadband, principally in remote and rural areas.

The IT policy targets are supplemented by the objective for the electronic communication
sector which indicates that individuals and authorities should have access to efficient and secure
electronic communications. The electronic communications should produce the maximum
possible yield with regard to selection of transmission services as well as their price and quality.
This is to be achieved through the measures based on the Law (2003:389) on Electronic
Communications (Electronic Communications Act).

In view of the development that has taken place in recent years and with the future in mind, the
Government considers there to be a need for new targets for broadband policy. Targets that are
more operational and measurable are now needed to meet future challenges. The new targets
need to be more clearly based on market-related deployment and on measures and tools made
possible by the Electronic Communication Act. There is also a need for targets that point the
direction for the future and indicate where we want to go. The new broadband targets should
supplement the IT policy targets and the target that already applies to the electronic
communications sector. Regarding the assessments and targets for policy on accessibility that
have been applied to date, the Government intends to return to the Riksdag on the issue in
conjunction with the government bill on accessibility which will be presented in early 2010. The
Government considers the targets proposed in this strategy to be consistent with the IT policy
targets relating to quality and growth and to contribute to fulfilment of these targets.

Targets pointing in a certain direction are particularly useful when development depends on
many players, in both the private and public sectors. Such targets encourage debate and
contribute to enabling everyone involved to work in the same direction. To summarise, it is
important that there are clear targets with a high level of aspiration that can contribute to
driving development forward in the short and long terms.



Sweden shall have world-class broadband

International comparisons show that Sweden today holds a strong position in the area of
broadband. However, the area is developing rapidly, and many countries are now investing in
order to catch up. The challenge for Sweden is to maintain and strengthen its position.

Sweden like the rest of Europe faces the challenge of a technical development that requires large
investments. The development of broadband is driven by higher demand of bandwidth and
intense market competition. The market players will do the investments in infrastructure. The
Governments task is to strive for well functioning markets and give market players good
business conditions through suitable regulation.

The overarching objective is that Sweden shall have world-class broadband. High use of IT and
the Internet is good for Sweden and for the country's competitiveness. This can only be
achieved if high-capacity broadband is available throughout the country providing resilient and
reliable access to the Internet and other broadband services. The definition of world-class
broadband will change on the basis of demand from users (individuals, businesses and the public
sector) and in line with developments in technology and services.

The Broadband Strategy aims to give the market players the possibilities to accomplish the
following broadband coverage.



                                                                                                 15
In 2020, 90 per cent of all households and businesses should have access to broadband at a
minimum speed of 100 Mbps
It is important that Swedish businesses and households in all parts of the country can benefit
from the opportunities presented by access to powerful broadband. There is therefore a need
for an ambitious target in the longer term that can contribute to enhanced competitiveness,
sustainable growth, innovation and productivity.

The trend is towards increased demand for high speeds in order to be able to make use of more
bandwidth-demanding services such as digital media, cloud computing and good-quality video-
based communication. There is also ever increasing demand to be able to use several different
services side by side. The complexity is in being able to specify how much the need for
broadband will increase over the period up to 2020 and how quickly. Opinions differ, and
forecasts range from 10 Mbps to 100 Mbps 11 – with the anticipated scope of and demand for
interactive services in a 5-10 year perspective playing a significant role. Depending on how
demand and services develop over time, the actual need for capacity in 2020 may be either
higher or lower. Despite the uncertainties that exist, demand in general may total 100 Mbps in
2020. This estimate is based on the assumptions presented in this strategy, for example on
technological development, use of spectrum and market-related deployment and demand. If the
assumptions change, there may therefore be a need to review and revise the strategy and the
estimates contained in it during the period up to 2015 and 2020.

The target is that a predominant proportion (90 per cent) of all households and businesses
should have access to broadband at a minimum speed of 100 Mbps in 2020.

This target is based on market investments being made in both fixed networks (fibre-based
networks and cable networks) and in wireless networks. Deployment of the wireless networks
with new technology will be crucial in achieving the access to broadband indicated by the target.
The operators’ access to radio frequencies will play a decisive role. To enable the wireless
networks to deliver high speeds, operators need to have access to frequencies in sufficiently
wide and coherent frequency bands. As well as the use of frequency bands already allocated,
planned new allocations in several bands such as 800 MHz, 2.3-2.4 GHz etc. will be significant.
If it were to be possible to release and allocate more frequencies in those bands which today are
reserved for purposes other than electronic communications, the prospects of attaining more
with high speeds would increase. Target fulfilment is not, however, dependent on such a
procedure, and there are no planned decisions at present for the further release of frequencies.

Another factor influencing development is whether the new wireless technologies are able in
practice to deliver the speeds promised. It will be necessary in many cases to have a permanently
installed outdoor aerial to enable households and businesses in more remote areas to benefit
from such high speeds.

In 2015, 40 per cent of all households and businesses should have access to broadband at a
minimum speed of 100 Mbps
Customer demand, the development of new services and the competitive situation will drive the
investments in networks that permit higher speeds. This is a trend that has already begun and is
expected to continue through to 2020. Between 15 and 20 per cent of households and
businesses already have such broadband access today.




11 Examples of forecasts: Cisco & Oxford Said Business School – 10 Mbps in 2015, Ofcom – 20 Mbps in 2015, Alcatel-
Lucent/Infonetics 100 Mbps in 2015, OECD – 50 Mbps in 2020
16
Access to broadband will primarily depend on future investments in the fixed networks, that is
to say upgrades of cable networks and deployment of fibre-LANs. The evidence suggests that
the major breakthrough for wireless technologies with high speeds will not happen until around
2015. The target is that 40 per cent of all households and businesses should have access to
broadband at a minimum speed of 100 Mbps in 2015.

All households and businesses should have good opportunities to use electronic public
services with broadband access
More and more services in society are becoming digital, and this requires businesses and
households to be able to make use of these services. It is a matter of everyday life that works
smoothly: being able to shop, do business, keep in touch with friends and family, watch video
clips or, quite simply, express opinions or comment on community events. For people with
disabilities it is important to be able to use specialist services, for example for sign-language
communication. From the point of view of businesses it is a matter of being able to conduct and
develop their operation in all parts of the country, being able to reach customers regardless of
where in the world they are located and to take part in global cooperation and networks. It may
also be a matter of making it easier to accomplish administrative tasks such as order
management, reporting and banking. This necessitates having access to broadband that makes it
possible to connect to the Internet securely. It is, in essence, a matter of democracy and rights.

If virtually everyone is to have access to broadband upgrading of wireless networks with new
technology will be significant in more remote parts of the country. In addition, there will be a
need for all households and businesses located in certain areas to install a fixed outdoor aerial to
obtain access to broadband.



A joint challenge with different roles

All players in the market have a responsibility if Sweden is to have world-class broadband. The
dynamism and power of innovation that exist in the market have to be utilised and stimulated.
Initiatives consequently need to be taken by individuals, businesses and public sector players if
we are to be successful. It is important to emphasise at the same time that the roles are different.

The Government must not direct the market or technical development. The task of the
Government is to create good conditions for the market, formulate policy targets and clear
away obstacles to development, for instance by endeavouring to ensure that there are relevant
regulations that enable all players to operate on equal terms. The Government has now
presented targets for the area of broadband. The Government’s action areas, with measures
decided upon and priority issues to contribute to attaining the targets, will be presented in the
following sections.

The public sector has a significant role to play as a major purchaser of services, but is also
responsible for encouraging the development of new services and the establishment of
infrastructure. The long-term need for infrastructure for broadband should be a natural part of
the development and planning efforts of the municipalities and of regional growth efforts. It is
also an important element of work on regional growth. In cases where public-sector actors are
involved in the market this should be done in such a way that competition is not distorted.
Public authorities and municipalities additionally have a special responsibility to set an example
and drive efforts to ensure that everyone can make use of IT services on equal terms and that
disability does not pose an obstacle to broadband use in Sweden.

It is the market players who drive technical development, the development of new services and
business models and make investments in infrastructure for broadband. The underlying

                                                                                                 17
principle is that electronic communication services and broadband are provided by the market.
How the market develops in terms of needs and demand and the development of technology
and services will be crucial to target fulfilment. The trend is towards increased demand for high
speeds, but it is difficult to predict by how much and how quickly this will happen. Will new
capacity-demanding services achieve a broad breakthrough in the market? Another factor is the
rapid technical pace of innovation and the question of whether the new technologies will be able
in practice to deliver the promised speeds to users. How well the sector is able to cope with the
challenges and demands it will face from the points of view of the environment and energy also
has an impact on development.

Research society, comprising universities, university colleges and institutes, has an important role
to play in generating knowledge that can update, improve and support the development of
competitive broadband technology. Research is additionally needed to meet the challenges
posed by the deployment of broadband and the socio-economic implications this has,
particularly with regard to security and privacy. Universities and university colleges are also
responsible for ensuring that there is a skills base to meet the needs of business and society for
IT in the short and long terms.

Civil society – individuals, businesses and organisations using IT – have an important role to play.
The use of IT and broadband is developing interactively between market players and users. The
involvement of organisations and individuals may play a significant role in access to broadband
throughout the country. Local factors are of great significance, particularly in remote and rural
areas. Individuals, companies and organisations must be able to rely on the networks working
and on the information and services provided always being available. It is also important for
consumers and businesses to adopt the new technology and for groups in society to develop an
ability to use the technology as well as possible. The willingness of households and businesses
to pay for broadband services today and in the future will have a crucial bearing on investments
in infrastructure. Will willingness to pay remain unchanged, or will willingness to devote income
to powerful broadband and electronic services increase or decrease? Development will affect
willingness to invest among market players, particularly with regard to areas in which the
investments will be made.

Everyone has a responsibility to collaborate, where possible, so that Sweden has world-class
broadband. Investments in infrastructure are costly, and the ongoing development of
technology will necessitate large investments. In some areas, principally in rural and remote
parts of the country, the return on investments in broadband is low. There is a need here for
collaboration between everyone involved in order to bring about investments. This may entail
operators making joint investments in infrastructure and then competing with one another at
service level. It may also be a matter of the public sector, for example through the Swedish Post
and Telecom Agency, municipalities, county administrative boards and bodies with
responsibility for regional growth issues, identifying where broadband is lacking and analysing
the demand in order to provide operators with an overall picture of needs, or a local residents’
association, for example, taking the initiative to build infrastructure when an energy company or
an operator deploys infrastructure in an area.




18
          ACTION AREA 1: FUNCTIONING
                 COMPETITION



Dynamic and efficient markets contribute to economic growth, innovation, technical
development and increased access to services. Markets that function well favour both businesses
and consumers as they result in diversity of supply and put pressure on prices. The most
important way of achieving efficient markets is functioning competition between the market
players.



Access regulation

The electronic communications sector has been assessed as needing special rules that can be
applied with the aim of creating effective competition. This regulation is focused on applying
remedies to deal with 'bottlenecks’, i.e. those parts of the infrastructure which for cost or other
reasons cannot be expected to become subject to competition in the foreseeable future.

Regulation should as far as possible promote infrastructure competition, which means the
deployment of parallel infrastructure where possible. In cases where this is not possible and
where there are reasons to grant access to the infrastructure of a dominant company, this access
should take place at as unrefined a level as possible. Unrefined wholesale services impose clear
demands on the operators to make their own investments, while control of their own supply of
services is greater, making it possible to differentiate the services with regard to content, quality
and price. In addition, access at an unrefined level means that the intervention signified by
regulation in relation to the dominant company does not become unnecessarily great.

Sector-specific access regulation should be phased out until it ceases completely when the
conditions necessary for effective competition exist. The regulation should therefore be adapted
to achieve this. Adaptations should be made as the market develops and when new
circumstances arise. It is important to achieve effective competition to the benefit of businesses
and consumers, while not impairing the incentive to make investments in new infrastructure. In
some parts of Sweden, due to geographical and demographic factors, the economic conditions
for infrastructure competition do not currently exist. In these areas regulation can promote
competition within an infrastructure and at higher levels of refinement. In other geographical
areas there may be competition that works well at end-customer level between different
infrastructures. When the conditions exist for functioning infrastructure competition,
regulation of access at wholesale level should be phased out.


                                                                                                  19
In the longer term, next-generation wireless access technologies such as LTE may alter the
conditions for functioning competition at infrastructure level with regard to broadband services.


Need for action

The sector faces extensive and necessary development of technology, resulting in significant
investments. The fixed networks need to be updated to cope with higher speeds, and fibre is
being deployed ever closer to the users. Parts of the fixed copper telephone network are being
closed down at the same time. Similar challenges apply to wireless network players, who will
need to make large investments for the change-over to the next generation of wireless
technologies. This will also increase demands on access to fibre or a powerful radio link to base
stations so that high speeds can be delivered to households and businesses. There is a great need
for investment, while demand from customers and willingness to pay for future services remain
uncertain. To support the investments it is important to have regulations that are long-term and
predictable and that give market players an incentive to invest.

A question to be addressed is therefore how competition and incentives for new infrastructure
investments should be balanced. On the one hand it can be justifiably argued that if competing
businesses gain access to new infrastructure too easily, interest in investing in such
infrastructure will be hampered. This applies in particular to infrastructure in remote areas
where the rate of return can be expected to be lower than in urban areas. On the other hand,
liberalisation of the market, and therefore the presence of competition in infrastructures, has
been a crucial factor in driving the trend towards inexpensive and innovative services for end-
consumers.

The decisive factor will therefore be that regulation promotes investments in new infrastructure
and at the same time ensures effective competition. Another factor to take into account may be
regional market conditions, which means that it some regions there may be justification for
competition within an infrastructure while competition in other regions can take place at
infrastructure level. The regulations include a requirement for the Swedish Post and Telecom
Agency to weigh up such considerations.


Implemented actions

More efficient appeals process
To improve the efficiency of the process at the public administrative courts in cases that come
under the Electronic Communications Act, the Riksdag, following proposals from the
Government, has decided on measures intended to shorten processing time and lead to
increased legal certainty. This means, for instance, that the administrative court of appeal
(kammarrätt) is the court of last instance for review and that special economic experts take part
in settling cases.

The Government has also proposed that decisions taken under the Electronic Communications
Act should be appealable by anyone who is a party to the case, if the decision has gone against
this party, and also by anyone else whose rights are impaired by the decision.

Functional separation
The Electronic Communications Act has been amended so that it is possible for the Swedish
Post and Telecom Agency to impose functional separation of the copper access network on an
operator with a dominant position in the market. This means that, if other measures are
considered insufficient to create functioning competition in the market, it is possible for the
Agency to separate infrastructure and retailing of broadband. The intention is that those

20
competitors who use the network of the dominant party should have more similar competition
conditions in relation to the part of the dominant operator concerned with sales of services to
consumers.

Increased precision in competition-promoting decisions
The Swedish Post and Telecom Agency was instructed by the Government in the autumn of
2007 to describe what steps it will take to increase precision in decisions on competition-
promoting obligations. Increased precision in obligation decisions reduces the number of
appeals and uncertainty in the market. Faster legally binding decisions and reduced uncertainty
contribute to a better climate for investment. The Swedish Post and Telecom Agency presented
the results of its remit in the report Precision i beslut (Precision in decisions) in June 2008.

Long-term and strategic analysis
With the aim of providing market players with greater predictability with regard to the long-
term application of applicable rules and regulations, in the autumn of 2007 the Government
instructed the Swedish Post and Telecom Agency to describe and analyse development in the
area of electronic communication in a five-year perspective, from a strategic point of view. The
final report Broad and long-term analysis for the area of electronic communication was
presented in March 2009.

Investigation on the concept of openness
The Government has tasked the Swedish Post and Telecom Agency with investigating and
analysing what the concept of openness means for the level of infrastructure and transmission
and in terms of the Internet and services, how different players in the public and private sectors
relate to openness and the significance of openness in regulated and unregulated conditions. A
report is due to be delivered by 30 November 2009.


Priority issues

Implementation of European Community directives, the ’Telecoms Package'
A high-priority issue for the Government is the implementation of the ‘Telecoms Package’ in
Swedish legislation. The Telecoms Package is an overhaul of EU rules underlying the national
provisions in the area, principally the Electronic Communications Act. The new rules will
strengthen competition and consumer protection in Europe. Competition that works better
leads to lower prices and more and better services. The new rules additionally reduce
uncertainty in businesses, so that it becomes easier to make investments.

The amendments make clear what the Swedish Post and Telecom Agency has to consider when
establishing access obligations for new networks, for example new fibre networks.

Long-term and strategic analyses
The Government intends to stipulate in instructions to the Swedish Post and Telecom Agency
that the Agency must conduct strategic analyses of the electronic communication sector on a
regular basis. The analyses are to be forward-looking, and based on these analyses conclusions
are to be drawn on the long-term orientation of regulation. The analyses are to be made in
consultation with other relevant authorities such as the Swedish Competition Agency and the
Radio and TV Authority. The aim is to create a long-term approach and predictability for
market players and consequently to reduce the uncertainty that regulation can cause. The
incentive to invest in new infrastructure can consequently be strengthened.




                                                                                               21
       ACTION AREA 2: PUBLIC-SECTOR
          PLAYERS IN THE MARKET



Public-sector players have a significant role in the broadband market, as owners of
infrastructure for broadband, users of IT and broadband services and as authorities responsible
for regional and local planning and development.

The area of competence of the public sector is governed not just by the Local Government Act
(1991:900) or the instructions or appropriation directions of government agencies, there are
also special laws that broaden the area of competence of the public sector and clarify what the
public sector has to or may concern itself with. The principal rule is that public-sector players
must not undertake commercial activity in competition with private-sector players as there is a
danger of this distorting competition. A difference in relation to private-sector players is that
public-sector players operate under different conditions, for example with regard to reporting,
required rate of return, depreciation periods etc. In some cases the public-sector element may be
justified, for example when public interests cannot be served by the market players.



Role and responsibilities of the municipalities

The various municipal administrations, the municipally owned city networks, the energy
companies and the housing companies together are players in the broadband market in several
respects. During the period of broadband support (2001-2007) the municipalities were
responsible for drawing up municipal IT infrastructure programmes and were additionally
recipients of the support.

One of the key roles played by the municipalities is in controlling access to municipal land and
granting licences for operators to deploy networks. In addition, many municipal city networks
and housing companies are active in the market for broadband services. The housing companies
deploy fibre networks in order to be able to offer the residents more advanced services, raise the
value of the property and gain control of the infrastructure. The municipal city networks have a
fibre-based infrastructure locally, and the networks may cover municipal service points,
businesses and residents. In 2008 around 25-30 per cent of the total fibre infrastructure was
owned by the city networks.

Depending on business model, the city networks offer everything from wholesale services to
other operators to broadband services direct to consumers. The Swedish Post and Telecom
Agency, the Swedish Association of Local Authorities and Regions, the Swedish Urban
Network Association and others aim to ensure that the city networks focus on offering
22
wholesale services to other operators at the lowest possible level of refinement, so that
competition in the market is encouraged. Municipalities additionally play a significant role as
procurers of IT and data communications services.


Need for action

The local authorities today have responsibility for planning and building within the
municipality. It has been argued in several contexts that planning for infrastructure for
electronic communications should be coordinated with the planning process under the Planning
and Building Act (1987:10). This argument applies to both comprehensive land-use plans and
local development planning, which is not the case at present. The Government is therefore
considering whether the issue should be dealt with by the municipalities in a similar way as
access to other infrastructure and services. This does not mean that the municipality itself or
municipally owned companies should deploy and manage the infrastructure.

It is desirable that the municipalities as owners of municipal land give operators and other
players greater opportunities to deploy fibre and rent duct or 'dark fibre', both from the point of
view of competition and availability. It is important that all players in the market are given equal
opportunities and access to the same information, for example on planned excavations, so that
there is no discrimination in favour of one player or a small number of players.
Ledningskollen.se is an example of collaboration between a large number of businesses,
authorities and organisations with regard to excavation works for infrastructure. To reduce
problems with dug-up cables, anyone planning an excavation project can obtain information
through the web service about who has cables buried at the location.

There are around 150 local city networks today, and they differ with regard to services offered,
business models and access to infrastructure. It is important that the networks are available to
all players in the market on competitively neutral and non-discriminatory terms. By primarily
offering unrefined wholesale services, such as duct and dark fibre, the networks can contribute
to increased competition, which in turn creates the necessary conditions for lower prices and
better services. Increased cooperation between city networks and other infrastructure owners,
for example with regard to product terms, standards and processes, is also important, as it
makes it easier for operators to enter into contracts. In cases where municipal housing
companies deploy new infrastructure for broadband it is important that the possibility of using
parallel infrastructures such as property networks for cable television is not restricted. The
possibility of infrastructure-based competition would otherwise be limited.


Implemented actions

Conflict resolution in public-sector sales activity in the market etc.
To create the necessary conditions for businesses to grow and operate, the Government in
August 2009 presented a Bill to the Riksdag containing proposals for the Competition Act to
be supplemented by rules under which the Stockholm District Court, at the behest of the
Swedish Competition Agency, may prohibit central government, a municipality or a county
council from applying a particular procedure in its sales activity. A municipality or a county
council may also be prohibited from pursuing activity which is not compatible with municipal
powers.

The purpose of the rule on conflict resolution is to deal with distortions of competition that
may arise when public-sector players undertake sales activity in competition with private-sector
players. For a prohibition to be issued, the activity or procedure has to distort competition or be


                                                                                                 23
aimed at distorting the conditions for effective competition. Another requirement to be met is
that it is not justifiable from a general point of view.


Priority issues

Amendments to the Planning and Building Act
The Planning and Building Act plays an important role in efforts to bring about a sustainable
society, and work is currently in progress on revising the legislation. The memorandum
circulated for consultation by the Government in the summer of 2009 proposes that
telecommunications and other information technology be brought within the scope of the new
Planning and Building Act. The link to infrastructure for electronic communication will be
strengthened in the proposal currently being prepared at the Swedish Government Offices.

Municipal IT infrastructure programmes
The Government considers the municipal IT infrastructure programmes to have been successful
and is encouraging the municipalities to continue with this work. It is possible in the
programmes to obtain an overall picture for example of access to broadband in the municipality,
the needs that businesses, individuals and the public sector have, the need for action and how
public-sector and private-sector players can collaborate.

More effective coordination on planned excavation works
The Government intends to task the Swedish Post and Telecom Agency with reviewing the
present-day forms of planning of excavation works and submitting proposals for improved
coordination and information management. The aim is to facilitate collaboration between
different players in the expansion of infrastructure and to increase opportunities for
competition at physical infrastructure level in electronic communication in connection with the
deployment of high-speed networks.

Information efforts
As part of its remit, the Swedish Post and Telecom Agency should also implement information
efforts targeted at municipalities. These efforts should be made in cooperation with the Swedish
Association of Local Authorities and Regions. The aim is to minimise the difficulties the
operators face in concluding agreements with the municipalities and obtaining necessary
permits for the deployment of infrastructure for broadband.



Role and responsibilities of central government

Central government is a major player in the broadband market and has several different roles.
Central government, through the National Rail Administration, Teracom AB, the Swedish
National Grid (Affärsverket svenska kraftnät) and the National Road Administration, owns
infrastructure and manages the limited resource represented by spectrum. In addition, central
government is responsible for the actions required to improve the efficiency of its own
administration through IT.


Need for action

There is a need for administration, policy and the market to be more clearly demarcated. From
the point of view of central government, a focus on core tasks is essential. This means, for
instance, that activity subject to competition should normally not be undertaken by an
authority as there is always a risk of it not being possible to maintain competitive neutrality.

24
Central government is a large owner of broadband networks and a significant player in the
market. For example, 15-20 per cent of the fibre infrastructure in 2008 was owned by
government agencies and government-owned companies. Like the municipalities, central
government should act as neutrally as possible and contribute to increased competition in the
market for electronic communications. The broadband networks therefore have to be available
to all operators in the market and on competitively neutral and non-discriminatory terms. The
services that should primarily be offered are unrefined wholesale services, such as duct and dark
fibre, but capacity services may also be an alternative in backbone networks. Government-
owned broadband networks can then contribute to greater competition, which ultimately
benefits households and businesses through more and better services and lower prices.

Government administration is undergoing change. Work is in progress to develop modern
administration that improves the service provided by authorities to members of the public and
businesses. It is considered in the Government’s action plan for e-government that access to the
Internet through broadband is essential for rapid development of e-government.

The role of central government with regard to spectrum is discussed in more detail under
Action Area 3.


Implemented actions

E-delegation
As part of the action plan for e-government, in the spring of 2009 the Government appointed a
delegation with a remit to direct and coordinate work aimed at developing IT-based services and
solutions in central government (ToR 2009:19). The delegation’s first task was to formulate a
proposed strategy for the work of the authorities on e-government. The proposal was presented
to the Government on 19 October 2009. The delegation is then to coordinate the IT-based
development projects of the government agencies and monitor the effects of these projects on
members of the public, entrepreneurs and staff. The delegation is also to coordinate certain IT
standardisation matters and assist the Government in international work in this area. The
delegation is required to submit annual interim reports to the Government containing data and
proposals. A final report is due to be delivered by 31 December 2014.


Priority issues

Increased availability of duct
Access to duct is essential in order to facilitate and encourage further deployment of broadband.
When new roads are built or roads are rebuilt, it should therefore be considered whether duct
for fibre should be laid if no duct is present. Duct should be available for all players in the
market on reasonable and non-discriminatory terms. The Government intends to commission
the National Road Administration to formulate a proposal for ways in which this can be done in
consultation with the Swedish Post and Telecom Agency.

Conversion of Banverket ICT into a separate company
Banverket (the National Rail Administration) owns and manages a nationwide fibre network.
IT and communication services are offered to the rail and transport sector, telecom operators
and other large companies within Banverket ICT. The Government intends to appoint a
commission of inquiry with a remit to establish what is required for Banverket ICT to be
converted into a separate company as part of the Banverket’s contractual activity. One of the
purposes of conversion into a separate company would be to improve the prospects of
competitive neutrality in the market.

                                                                                              25
        ACTION AREA 3: SPECTRUM USE



The development of technology and the market has changed the conditions for wireless
communication and management of the limited resource of spectrum. Improved technology
provides greater opportunities for communication and leads to increased demand for wireless
services. This increases the demand for spectrum and makes new demands on spectrum
management.

Radio signals consist of electromagnetic radiation over a surface with a certain range and at a
certain frequency. The signal is picked up by a receiver located within the transmitter's range
which is set to the same frequency. Airborne electronic communication can consequently take
place.



Need for spectrum

In line with the very rapid development of wireless technologies and services, demand for
spectrum is increasing in society, in turn leading to spectrum acquiring greater economic value.
The value of spectrum use is estimated at 2.2 per cent of GDP in the EU.12

The supply and use of spectrum is a key issue for continued development of IT and electronic
communication. The principal objective for the area is to create a climate for investment that
makes it easier for new technology to be disseminated across the country and leads to a large
supply of wireless services reaching many users.

Spectrum is a limited resource in society. Demand for parts of the spectrum is significantly
greater than supply, and as spectrum is essential for wireless services access to it is an example of
a bottleneck resource. As a large and rapidly growing proportion of all electronic
communication services is wireless, access to spectrum is a key issue for the development of the
whole of society.


Need for action

Access to spectrum is a significant factor for all users in society to have access to current and
future wireless services, especially in frequency bands that have good area coverage. It is




12 Review Impact Assessment COM (2007) 1472
26
therefore of the greatest importance that the Swedish Post and Telecom Agency works on the
implementation of planned new allocations, for example in the 800 MHz, 1785-1805 MHz and
2300-2400 MHz frequency bands, and that licence terms are as technology-neutral as possible.


Implemented actions

New spectrum for electronic communication
The Government took a decision in December 2007 that parts of the spectrum previously used
for terrestrial television should be used for other purposes. The part of the frequency band
identified by the Government in this way was the 790-862 MHz range. This decision was
possible because digitalisation of television broadcasts in the terrestrial network meant
substantially more efficient use of spectrum than previously. When the decision was taken, the
Government balanced the need for spectrum for terrestrial television and the need for spectrum
for other uses. This frequency band is well suited to use for wireless broadband services as it has
good area coverage, increasing the possibility of coverage even in remote areas. The Swedish
Post and Telecom Agency plans to initiate a bidding procedure for licences in this frequency
band in 2010.

Technology neutrality in the 900 MHz and 1800 MHz bands
The possibility of opening up the former GSM bands in the 900 MHz and 1800 MHz bands to
more modern technology throughout the EU is a step towards promoting new technology and
gaining more users with networks that are already well deployed.


Priority issues

Public-sector use of spectrum
Public-sector players such as the Swedish Armed Forces and the Civil Aviation Administration
today have large parts of the lower frequency bands at their disposal. The use of spectrum by
the government-owned company Teracoms AB for television broadcasting is another example
of use that takes place after other considerations have been taken into account, such as
safeguarding freedom of expression and freedom of information. It is important that this
spectrum is utilised in a socio-economically efficient way and that, if necessary, measures are
taken to ensure that this is the case. The evaluations that need to be made are how spectrum can
best be used to attain societal objectives relating for instance to access to electronic
communications, emergency preparedness issues and safeguarding of freedom of expression and
information.

The Frequency Inquiry proposed in its report Effektivare signaler (More efficient signals) (SOU
2008:72) in July 2008 that the Swedish Armed Forces should pay charges for their use of
spectrum with the aim of establishing good resource management. This report is under
discussion at the Swedish Government Offices.



Modified model for spectrum management

Rules on the granting of licences are of key importance in determining when spectrum may and
can be used. The Government regards good spectrum management as necessitating a balance
between central government control and the use of market mechanisms. Frequency
management has acquired more and more market-based features as a result of the liberalisation
of the whole market. The possibility of an auction procedure and second-hand trading in
spectrum was, for example, introduced in conjunction with the 2003 legislation.

                                                                                                27
The Government’s view is that modernised and more appropriate legislation will be needed in
the future. This necessitates regulatory amendments that promote access to electronic
communication services to the benefit of consumers and businesses. Spectrum management
must be long-term and predictable in order to support the development of technology and the
market.

Licences for the use of radio transmitters are issued under the Electronic Communications Act.
The overarching goal is for individuals and authorities to have access to efficient and secure
electronic communications. The principal means of achieving this are to create the necessary
conditions for effective competition without distortion and restrictions and to promote
international harmonisation. Central government is responsible for areas where public interests
cannot be met by the market alone.


Need for action

To make use of the opportunities presented by technological development and encourage
investments for the future, there is a need to review the rules for the management of spectrum.
The Government in July 2007 appointed a commission of inquiry whose remit was to study the
need for amended rules to apply for licences under the Electronic Communications Act. The
Commission of Inquiry presented is report More efficient signals (SOU 2008:72) in June 2008.
During consideration of the Inquiry proposals a supplementary memorandum, Amended rules
for licences to use radio transmitters etc., was prepared at the Swedish Government Offices and
circulated for consultation.


Priority issues

Amended licensing rules
The overarching aim is to simplify and modernise the rules. The aim is to combine security of
investment with competitive considerations and the need for predictable rules. The
memorandum proposes a distinction between two different types of licence: licences to use
radio transmitters and licences to use a particular radio transmitter in a particular spectrum. The
proposal is for a principal rule that a bidding procedure will be used if the number of licences
that can be granted is not sufficient to meet the demand from all who wish to and would be able
to operate. However, an option is also proposed for licences to use of radio transmitters within
a particular spectrum band to be extended during the current licence period, if the licence-
holder can make a convincing case that an extension would result in a substantially improved
supply of electronic communication services. It is also proposed that it should become simpler
to automatically renew licences to use radio transmitters, which make up the majority of all
licences. In addition, there is a proposal to open up the possibility of leasing licences, which
promotes mobility in the market.

In early 2010 the Government will present a Bill to the Riksdag containing proposals on more
modern and appropriate rules for licensing for the use of radio transmitters.




28
           ACTION AREA 4: RELIABLE
         ELECTRONIC COMMUNICATION
                 NETWORKS



As dependence on electronic communications increases, so too does vulnerability. Tolerance of
outages in networks is decreasing as more and more vital systems, services and work tasks
require constant connection. Many functions in modern-day society are based on functioning
electronic communication, for example production systems in businesses, transactions in the
financial sector and the grocery trade, health care, the emergency number 112, the electricity
supply, the police, the armed forces, public administration etc. A major outage in networks may
have severe consequences for Swedish society, both for the economy and for human life.

As electronic communication and the Internet are part of a global system, other countries are
also affected if outages occur in Swedish networks. Sweden has an international commitment
here, in the same way that other countries do. The level of resilience needs to be preserved and
developed in line with technological advance and the increased dependence on electronic
communications.


Need for action

Infrastructures are by nature cross-sectoral, and this applies to a great extent to the
infrastructure for electronic communication. This means that disruptions may have a great
impact on the ability of society to cope with emergencies. Electronic communication covers
most critical public services and the majority of citizens. A functioning infrastructure is also an
important basis for attracting investments. Measures in this area therefore cannot be described
as measures in an individual sector and should be viewed instead as cross-sectoral actions.

While the needs of society for resilient electronic communication and broadband are increasing,
the players in the electronic communication sector are acting in a market that is increasingly
competitive. These players primarily have to meet the requirements of their customers and
owners. However, society increasingly has a greater need for resilient broadband than the level
the market provides through individual players.

Sweden must meet the increased demands for reliable and high-quality electronic
communication made by other sectors in society. Continuous and long-term initiatives in
collaboration between private-sector and public-sector players are required to enable this to be
achieved.

                                                                                                29
Implemented actions

The Swedish Post and Telecom Agency undertakes public-private cooperation together with
the players in the sector for resilient electronic communications. These efforts have been
funded by the operators through a 'preparedness charge' payable to the Swedish Post and
Telecom Agency and by central government through grants to improve the emergency
management capability of society.


Priority issues

Resilient electronic communications
Measures aimed at resilient electronic communication require advance planning and continuity.
The same is necessary to preserve the public-private collaboration built up over several years. To
improve advance planning and continuity there may be a need for long-term stable funding. In
addition, the increasing dependence of society on broadband means that the scope of efforts
should be reviewed.

The Government therefore intends to task the Swedish Post and Telecom Agency with
analysing and presenting proposals for ways in which resilient electronic communications can
be enhanced to meet the long-term needs of society and essential services for resilient electronic
communications.

Reliable electronic communications
The increased dependence on electronic communications in society necessitates reliable
transmissions and widespread trust in broadband and the Internet as media. It is therefore
important that relevant authorities work on the dissemination of information relating to
security risks in order to improve the level of knowledge of the risks that exist.




30
           ACTION AREA 5: BROADBAND
           THROUGHOUT THE COUNTRY



Access to broadband is generally good in Sweden, but there are regional differences. In more
built-up areas there is great access and freedom of choice, while the options in small towns and
villages and in rural areas are more limited. There are also areas that lack access to broadband or
have broadband of low capacity and quality.



Promoting local investments in infrastructure

Investments in infrastructure will be necessary to meet increased demand for higher speeds. The
principal role of central government is to make the market work efficiently and provide the
market players with good conditions in which to operate. At the same time the conditions for
deploying infrastructure are less good in the more remote parts of the country.


Need for action

Targeted efforts are needed to ensure that households and businesses in the more remote parts
of the country have similar opportunities. The Government wishes to focus on stimulating the
drive that exists and creating good conditions for all players to collaborate and invest in
broadband. The Government also wishes to support the commitment, skill and drive that exists
in the country among individuals, businesses, local organisations and municipalities to gain
access to broadband.

The Government’s assessment is that the development of wireless technologies and wireless
broadband will play a key role in these areas. Satellite broadband may also play a role in the most
remote areas.


Implemented actions

Support for duct
Excavation costs in general account for a very large proportion of the investment in broadband
deployment. It is therefore cost-effective for broadband to be jointly laid or for duct for
broadband (for example empty pipes) to be buried when electricity networks, water and
sewerage, district heating or other infrastructure are expanded or upgraded. Despite this, duct is
not regularly laid.
                                                                                                31
In view of the opportunities for cost-effective deployment of broadband presented by duct,
there is reason to promote duct. The Government has therefore set up support that can be used
to deploy duct at the same time as other infrastructure is being built.

Home improvement tax allowance for connection of broadband cable
The Government has introduced the possibility of a tax allowance for household work and for
work on the repair, maintenance and refurbishment and extension of certain homes. The
principal purpose of the reform is to reduce the level of undeclared work and to increase the
labour supply.

A home improvement tax allowance (HUS-avdrag) is available for certain types of
groundwork, for instance work on cables for electricity or electronic communication directly
adjoining the building. The availability of allowances reduces the cost of and promotes
upgrading of access networks for electronic communications.

IT infrastructure and work on regional growth
In the national strategy for regional competitiveness, entrepreneurship and employment 2007–
2013 13 the Government highlights an advanced information society as a particularly important
action area. This contains actions to increase access to broadband in remote and rural areas. The
strategy and its priorities guide regional work on growth and also indicate guidelines for
implementation of the European Community’s structural funds programme in Sweden. The
strategy represents an important platform for an integrated approach and cross-sectoral control
for regional competitiveness, entrepreneurship and employment, and guides the involvement of
national authorities in work on regional growth.

Support for broadband deployment in the rural development programme
The Government has decided on broadband initiatives under the Rural Development
Programme as part of the European economic recovery plan. The support totals SEK 250
million, with an anticipated start date of 2010 and payments through to the end of 2012. The
aim is to increase availability of broadband in the remote areas of the country, based on local
needs, so that everyone has an opportunity to take part in the information society and benefit
from commercial and public services. The actions supplement existing measures for example in
the structural funds.

Monitoring the development of access to broadband
The Swedish Post and Telecom Agency has been tasked for several years with monitoring
broadband deployment in Sweden and annually reporting the results to the Government. The
focus in its remit is on describing and analysing access to broadband, including a geographical
survey of the areas where the conditions necessary for access to broadband do and do not exist.
The purpose of the remit is to enable the Government to monitor trends in the market and take
measures where necessary.

The government agencies or other bodies responsible for work on regional growth should
monitor regional access to broadband.




13 Ref. No N2007/7152/RT
32
Priority issues

Broadband forum for collaboration
The Government intends to initiate a forum for dialogue and collaboration on access to and
deployment of broadband. Participants who will be invited to attend include the Sweden Post
and Telecom Agency, county administrative boards, bodies responsible for regional growth
issues, municipalities, operators and stakeholder organisations. The aim is to identify
constructive solutions that contribute to increased collaboration and deployment of
infrastructure in areas where there is little prospect of expanding parallel infrastructure. It is
important to make use in this work of the regional and local initiatives that exist.

Examples of best practice in collaboration between private-sector and public-sector players
Access to infrastructure for broadband is greatly affected by geographical and regional factors.
Today there are several examples of regional and local initiative and public-private collaboration
that promote the deployment of infrastructure. There is a need to gather experience and
describe such examples of best practice in collaboration. The aim is to disseminate experience
gained from these projects to other parts of the country. The Government will therefore task
the Swedish Post and Telecom Agency with describing examples of regional and local initiatives
and private-public collaboration that promote the deployment of broadband. It is also intended
that the Swedish Post and Telecom Agency will present proposals on how such initiatives can
be promoted.

Increased access to broadband through spectrum allocation
The Government intends to task the Post and Telecom Agency, in consultation with relevant
authorities, with investigating and presenting proposals on ways in which access to broadband
can be ensured in all parts of the country. The proposal is to be aimed at promoting fulfilment
of the target that all households and businesses should have good opportunities to use
electronic public services with broadband access. The remit is to focus on how suitable
frequency bands for electronic communications, with good coverage, can be used for increased
availability in areas lacking access to broadband or having broadband of low capacity and
quality. The remit is not to cover those frequency bands that are used at present for radio and
television broadcasting or other public uses.

Broadband in present-day remits
The Government intends to task the Swedish Post and Telecom Agency, as part of its ordinary
activity, with assisting those authorities that have been instructed to manage support for the
deployment of broadband.

The initiatives for an advanced information society with grants from the structural funds have
accounted for a limited share of funded projects. The Government therefore intends to task the
Swedish Agency for Economic and Regional Growth with examining and reporting back on
whether rules or funding pose obstacles in this area.



Universal services

The electronic communications sector has undergone a gradual but fundamental change.
Liberalisation began in 1992-93, and meant that the market developed from a de facto state
monopoly to a liberalised market with a large number of competing players. A safety net was
therefore created in conjunction with European liberalisation to guarantee access to a number of
basic services, in view of the fact that the market targets profitable customers.



                                                                                               33
Universal service obligation, under the Electronic Communications Act, is the term used to
designate the minimum supply of electronic communication services all users have the right to
benefit from. Today it means that reasonable requirements, for instance for telephony and
functional Internet access, have to be met. Transmission need not take place via a fixed copper
wire but can just as well take place wirelessly. The services have to be provided to the user at
affordable prices. Under the USO Directive14 there is provision for adapting requirements for
speeds/services on the basis of national circumstances that dictate what functional access really
means. The level of functional access to the Internet has been defined since 2003 as 20 kbps.

The basic principle is that universal service must be provided by the market at an affordable
price. Central government only becomes responsible when it is apparent that the market has
failed. Government intervention can aim to make a service available throughout the country,
but can also aim to make it possible for people with disabilities to benefit from new technology
on equal terms with others in society. If a market failure is evident, it is possible to oblige one or
more suitable operators to fulfil reasonable requirements for the provision of the service. In
cases where the cost is considered to represent an unfair burden for the operator, central
government has to procure the service. Under the USO Directive procurement of universal
service can be financed either from government funds or from an operator-financed fund.

In 2008 the European Commission adopted a communication in connection with the ongoing
review of the scope of the universal service obligation which has to be conducted every three
years. In the communication, the Commission states that the current definition of universal
service should be retained for the 27 Member States of the EU and should not therefore be
extended to either broadband or mobile communication. The communication also contains a
discussion of the principles of universal service obligation as an instrument, and the
Commission asks a number of future-oriented questions. The Government circulated the
communication for consultation. Opinions differ, in the comments received under this
consultation procedure, concerning the question of whether broadband should or should not be
included in the universal service obligation. The impression is, however, that there is strong
support for the Swedish definition of functional Internet access needing to be substantially
adjusted upwards.


Need for action

Both technical development and the use of and demand for services are changing conditions for
users. The present-day level of functional Internet access is based on a situation in which dial-up
access through the fixed copper network was the norm. Although narrowband modems
permitting speeds of 20 kbps are still used, they are far from being the usual method of
connection. Most copper networks in the country have now been upgraded and permit megabit
speeds. Access to the Internet now regularly takes place at significantly higher speeds. In
addition there are alternative forms of access, for instance through wireless networks, cable
networks and fibre-LANs. The forms of access that exist and are used by a large majority of
subscribers permit significantly higher speeds than in the past.

The majority (estimated at around 80 per cent of all Internet users in Sweden) today use a
connection that permits a minimum speed of 1 Mbps. The web services that exist are adapted to
this speed. A speed of 20 kbps cannot be regarded as sufficient to provide basic electronic
services in society. Consequently, if these services are to be capable of being used satisfactorily




14Directive 2002/22/EC of the European Parliament and of the Council of 7 March 2002 on universal service and users' rights
relating to electronic communications networks and services (Universal Service Directive)
34
functional Internet access means something different now than it did in 2003. In line with
development there is a need to continuously re-assess what is still functional. The current
regulated level for functional Internet access can be said to have outlived its day.


Priority issues

The intention in specifying speed for functional Internet access is to ensure an Internet
connection of the quality required for the access to be capable of being regarded as satisfactory
and fulfilling its function. It must be borne in mind that response times, for example, should
not be too long but also that certain services in themselves very often necessitate a particular
speed to enable them to be used at all.

A sufficiently good Internet connection is needed in particular so that members of the public
have electronic access to universal service. It takes 3 minutes and 40 seconds to log onto the
website of the Swedish Social Insurance Agency with a 20 kbps modem, while it takes around 5
seconds with a connection that permits a speed of 1 Mbps.

The directive does not specify what functional Internet access means in practice. One reason for
this is likely to be that it cannot be considered to be a single level as development is moving
forward. Finland recently decided that the level should be upgraded to 1 Mbps. The United
Kingdom has proposed a commitment for the whole population to have access to 2 Mbps by
2012, and France has declared the intention to upgrade the definition to 512 kbps.

The fundamental level for functional Internet access should be reviewed. The Government
intends to circulate a memorandum on universal services, including an upgraded level of
functional Internet access, for consultation.




                                                                                              35
EVALUATION AND FOLLOW-UP OF THE
           STRATEGY



To enable the action areas to contribute to meeting the targets contained in the broadband
strategy, there is a need for development in the market to be continuously monitored in relation
to these targets.



The Swedish Post and Telecom Agency is tasked with proposing ways of
following up the strategy

The Swedish Post and Telecom Agency should monitor developments in the broadband market
in relation to the operational targets. The Agency was previously tasked by the Government
with describing and analysing actual and possible availability of infrastructure and services for
electronic communications. This remit should be supplemented by monitoring development
continuously and specifically in relation to the targets.

Development should also be monitored on the basis of the areas considered to be crucial in
attaining the targets. The monitoring of development should be based on the action areas
formulated by the Government. Part of the work on the strategy and continuous development
should therefore consist in trying to define the technical and market conditions as well as public
initiatives required for the targets to be attained. The result will then serve as a rough plan for
work within the strategy and a basis for analysis of development. The Swedish Post and
Telecom Agency has a natural role to play in this work, which should also include other players,
as the prospects of attaining the strategy targets depend on the market, the public sector and
civil society. The Government therefore intends to task the Swedish Post and Telecom Agency
with drawing up proposals for follow-up of the strategy as indicated above, together with
relevant authorities.



The strategy is to be evaluated

The strategy is based on assessment of future developments in the supply and use of electronic
communications. Assessment of the future – especially in such a dynamic area as this – is
uncertain. There is therefore good reason to review and evaluate the strategy in a relatively short
period of time. It is consequently proposed that the evaluation should be made in 2012. This
also provides scope for possible adjustments to the strategy, in good time before 2015, when
targets have to be met.
36
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