Broadband News
News, views and analysis
Budget: 50p landline tax confirmed
24 Mar 2010 | 13.32 Europe/London
Chancellor Allistair Darling has confirmed the 50p copper line phone tax as the basis of connecting the majority of homes to next generation broadband services by 2017.
The tax will go in to funding ‘final third’ projects to ensure that those areas which are not attractive for a commercial roll out of fibre, notably rural communities.
"The UK has the potential to be a digital world leader. It needs high-speed broadband for rural areas as well as urban, it must not be limited to the well-off," the chancellor said in his budget speech.
The 50p levy has been opposed by those who claim it is unfair to tax all phone line owners to provide a minority of mainly urban dwellers with next generation access. Hence, in the Buget, the Chancellor made clear the poorest telephone users would not have to pay the levy.
There is, of course, the possibility that despite today’s official endorsement in the Budget, the tax could never see the light of day.
With an election looming, and forecast to be held on May 6th, the Conservatives, if in power, have vowed to scrap the tax. They believe industry incentives and opening up BT’s networks and ducts to rivals should be tried first and if further funding is needed it should come from what is left over in the digital switchover fund (set up to help people switch to digital television in 2012).
Will it be enough?
Listening in to the Budget, Schellion Horn, telecoms director at Deloitte believes there are still some substantial issues which raise significant question marks against the tax’s success.
“There are a number of issues that will need clarification surrounding the 50p broadband tax,” he says.
“There is likely to be an administrative burden on fixed line operators to amend billing systems and identify lines which are subject to the tax.
“Additionally, the broadband tax is unlikely to provide sufficient revenue to fund the roll-out of high speed broadband to the majority of the population, as set out in the Digital Britain report. It remains unclear how the short-fall will be funded – whether that will be through public subsidies or operators stepping in.”
The tax will go in to funding ‘final third’ projects to ensure that those areas which are not attractive for a commercial roll out of fibre, notably rural communities.
"The UK has the potential to be a digital world leader. It needs high-speed broadband for rural areas as well as urban, it must not be limited to the well-off," the chancellor said in his budget speech.
The 50p levy has been opposed by those who claim it is unfair to tax all phone line owners to provide a minority of mainly urban dwellers with next generation access. Hence, in the Buget, the Chancellor made clear the poorest telephone users would not have to pay the levy.
There is, of course, the possibility that despite today’s official endorsement in the Budget, the tax could never see the light of day.
With an election looming, and forecast to be held on May 6th, the Conservatives, if in power, have vowed to scrap the tax. They believe industry incentives and opening up BT’s networks and ducts to rivals should be tried first and if further funding is needed it should come from what is left over in the digital switchover fund (set up to help people switch to digital television in 2012).
Will it be enough?
Listening in to the Budget, Schellion Horn, telecoms director at Deloitte believes there are still some substantial issues which raise significant question marks against the tax’s success.
“There are a number of issues that will need clarification surrounding the 50p broadband tax,” he says.
“There is likely to be an administrative burden on fixed line operators to amend billing systems and identify lines which are subject to the tax.
“Additionally, the broadband tax is unlikely to provide sufficient revenue to fund the roll-out of high speed broadband to the majority of the population, as set out in the Digital Britain report. It remains unclear how the short-fall will be funded – whether that will be through public subsidies or operators stepping in.”
I do not disagree with the levy - I firmly believe we should have 'universal bb' in this country and if left to commercially viable rollout there will be those who get it and those who don't - so the only way to ensure this doesn't happen is for public funding.
However - I believe any public funding should go to those who have the worst speeds and those who would otherwise not get it under normal circumstances - essentially "rural broadband" or similarly affected users.
I think it would be better for the country as a whole to require a minimum speed for all and anyone not already on that minimum now should be the first to get the latest rollouts.
29 Mar 2010 | 12.21 Europe/London