Minister of Industry Jim Prentice has so far declined to specify how the proceeds of Canada's recent wireless spectrum auction will be spent. (CBC)

Finland has unveiled a broadband strategy that aims to deliver ultrafast download speeds to every household by 2016 in order to boost national economic productivity.

The Finnish government on Thursday said it would foot one-third of the cost of building a fibre-optic cable network in areas that are underserved by commercial internet service providers. The government contribution will make up about 67 million euros ($102 million) out of the total 200-million-euro ($303 million) budget for the project.

The aim is to provide all homes in Finland, including those in rural areas, with download speeds of at least one megabit per second by 2010, with a ramp-up to 100 megabits by 2016.

Most Canadians with broadband have connection speeds between five and seven megabits. Many internet users in rural areas, however, are limited to much slower dial-up speeds of 56 kilobits per second.

Finland's government sees high-speed internet access as essential infrastructure that will allow the country to take a global edge in competitiveness and productivity.

"We are strongly committed to developing an information society, and we want to promote productivity and efficiency," Communications Minister Suvi Linden told Agence France Presse.

Telecommunications companies, regional governments and financial support from the European Union are expected to make up the remaining cost of the project.

The Canadian government has recently been facing increased pressure to initiate a similar broadband strategy in light of Canada's worsening standing in world rankings. While Canada was a world leader earlier this decade in broadband because of fierce competition between cable and phone companies, it has been surpassed by a number of countries — including Finland — in recent years as that competition has slowed.

Finland ranks sixth in the 30-member Organization for Economic Co-operation and Development, with about 30 per cent of inhabitants subscribing to broadband. Canada, which ranked second in 2002, has slid in recent years to 10th, with about 26 per cent subscribed.

Those rankings differed slightly in a recent study by Oxford University, which measured broadband uptake by households rather than individuals. Canada ranked 11th followed by Finland at 12th. The Oxford study also rated the quality of broadband networks across countries and whether they were ready for the huge expected growth in online video in the next three to four years. Only Japan qualified as currently prepared while Canada's networks failed to qualify as capable of running even existing internet traffic.

Canada ranked 27th out of the 42 countries studied for future readiness while Finland placed 15th, right ahead of the United States.

Internet speeds in Canada have not increased dramatically over recent years while prices have risen steadily. Canada's average price per megabit of speed is one of the worst in the OECD, at $28.14 US, ranking the country 27th out of 30 in terms of cost. The price per megabit in Finland, by comparison, is considerably better at $13.45 US, placing the country 12th. The world leader in price is Japan, at $3.09 US.

Service providers have also avoided rolling out high-speed internet service to rural communities because it is not profitable to do so.

A number of telecommunications industry observers, analysts, politicians and companies themselves — such as Telus Corp. — have called on Industry Minister Jim Prentice to use some of the $4.2 billion in proceeds from a recent auction of wireless airwaves on a broadband strategy to connect rural Canada.

Prentice has so far been silent on whether the government has any plans to encourage broadband infrastructure and has only said the spectrum proceeds will be used for debt reduction.

His spokesman did not return a request for comment.

With files from Agence France Presse