Surprise 50p Broadband Tax In Digital Britain Report

A surprise 50p per month broadband tax has been recommended in Lord Carter’s Digital Britain report.

The new tax, if it goes through, will apply to every home and business with a phone line and help raise an estimated £175 million a year.

The government will make this money available each year to broadband providers like BT to help them fund the roll out of super-fast fibre optic broadband to around 90% of UK homes by 2017.

Ian Fogg, an analyst with Forrester research, believes the sums quoted in the report do not stack up. He said “There are around 34 million fixed lines in the UK and at £6 a year this is going to raise in the low hundreds of millions each year. This is some way off BT’s budget of £1.5bn to put fibre in 40% of homes by 2012”.

Ian continued, “There is going to be a two-tiered internet for a long time, whether the government likes it or not”.

The Digital Britain report also outlined plans to take £200 million from the BBC licence fee to invest in a range of broadband solutions to ensure every UK home has at least 2Mbps broadband access by 2012.

This would again involve giving money to fixed line, wireless and mobile broadband providers.

Sir Michael Lyons, The BBC Trust chairman, reacted angrily to the plan, saying, “The licence fee must not become a slush fund to be dipped into at will, leading to spiralling demands on licence fee payers to help fund the political or commercial concerns of the day.” This would lead to the licence fee being seen as another form of general taxation”.

Conversely, shares in BT surged by 5.8%, buoyed by the news that the company could be receiving significant funding to help roll out its fibre optic broadband network.