TalkTalk Claim 50p Broadband Tax Plan Will Backfire

TalkTalk (talktalk.co.uk) CEO Charles Dunstone has claimed that the Government’s proposed 50p broadband tax plan will backfire and actually result in 100,000 UK homes cancelling their broadband service.
The 50p broadband tax on every UK home with a landline has been earmarked by the Government to help fund the roll out of faster broadband services to rural areas.
However, Dunstone believes the tax will have a detrimental effect and result in around 100,000 low income homes dropping their broadband as they simply can’t afford it.

Commenting on the planned broadband tax, Dunstone said: “This is an unjust and regressive tax on all phone customers which will subsidise mostly richer rural households that can afford high priced super fast broadband services”.
Dunstone continued, “As well as being unfair we estimate that the increase in price will mean that over 100,000 mostly low income homes will be forced to give up their broadband lines. This is wholly inconsistent with the Government’s plans to tackle digital exclusion by increasing uptake and use of broadband”.
On Monday of this week, Andrew Heaney, the Director of Strategy and Regulation at TalkTalk, gave evidence to the BIS Committee, to outline TalkTalk’s concerns.

These concerns also included the possiblility that the roll out of next generation broadband to rural areas could be further delayed by the tax plan as private sector investors would wait for public funding to be made available.
Around £1 billion is forecast to be raised from the 50p per month broadband tax, which is expected to commence in 2010 and last for around 7 years.
Rather than introduce the tax now, TalkTalk believe the Government and Ofcom should concentrate on enabling private sector investment and ensuring effective competition.