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BT may increase fibre coverage with 50p tax
Thursday 18 June 2009 10:48:54 by John Hunt

BT is examining its fibre to the cabinet roll out plans and considering increasing coverage to 90% of homes after details of the planned 50p tax on phone lines was revealed in Lord Carter's Digital Britain report on Tuesday.

The report set a target for at least 90% of homes and businesses to have access to high-speed broadband by 2017 with the £6 a year (50p a month) levy planned for every fixed phone line which will contribute to a 'Next Generation Fund' to help the final third of the country to get access to these faster services.

"We're keen to get fibre to as many homes as possible - and so the levy is a positive step towards increasing availability. The devil will be in the detail, but, if the plans are workable, then it could be feasible that we [would] deliver somewhere in the region of 90 per cent coverage."

Ian Livingstone, (CEO) BT Group

BT's current fibre roll out is in trials in London and Wales but is expected to be deployed to cover 40% of homes by 2012, costing an estimated £1.5bn. UBS analysts estimate it could cost them a further £3bn to get to 90%.

Other providers are less sure that the 50p levy is a good idea.

"A tax on fixed lines is the wrong solution, penalising existing customers and conflicting with the government's stated objective of driving broadband take-up."

"With equal access to infrastructure and evidence of consumer demand, we would back ourselves to compete successfully, just as we have done since entering the broadband marketplace three years ago."

BSkyB statement

Analysts suggest that the increased rollout would be bad for Sky as they could lose some of their valuable pay-TV subscribers to rivals who could provide similar services over a next-generation broadband service.

Carphone Warehouse are also wary, advising that the government will have to consult and justify the tax before being able to make it law.

[ Topic: Internet Service Providers | 83 comments | link to this item ]

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Posted by doowles 9 months ago
Oh just get on with it.

I've had enough with committees, public value tests, complaints and discussions. Start digging some fibre!!

Posted by Capn 9 months ago
Unless theres some considerable extra spending then by 2017 Britain will still be trawling behind the rest of the world. Even Australia are looking at 90% having FTTH by then.

Posted by veryteknical 9 months ago
Stop this stupid tax! Once its in place, who know's how long we will have to continue paying it to the exchequer!?
In order to finance a proper serious fibre roll out in the UK, Why can't BT and the regulator simply get together and agree a way/scale of charging extra to all the broadband providers!?
Sure this cost will ultimately be passed on to the consumer, but its got to be better than all of us paying a TAX!

Posted by Somerset 9 months ago
We just need a roll-out plan published. Like when ADSL was launched and we went round getting people to register interest (we don't want that again!).

Posted by AndrueC 9 months ago
From the linked FT article: "based on optical fibre to run past 90 per cent of households". Hang-on. Probably just a journalist error but that could be taken as FTTH. If this tax prompts BT to roll-out FTTH to 90% of homes then I'd be well impressed.

Time to get the bread in time to catch the bacon flying past :)

Posted by AndrueC 9 months ago
..just to be clear. I don't actually think that's what BT mean. More likely they mean (as JohnH implies) FTTC to 90%. Still - you never can tell with BT :D

Posted by krazykizza 9 months ago
But people, we already pay £12 a month to them! Surely some of that is going to FTTC? I thought this 50p was going to go to the vilage idiots to get on the job centre website in record time! Don't make me bring ping 'zones' into this! cyber discrimination at its best.

Posted by liamthom 9 months ago
90% !!! If you are going to start taxing everybody for a specific purpose then you should be providing the service to all of them; otherwise you might as well leave it to the market. 90% of homes and businesses just covers towns and cities. It is the last 10% that need the subsidies if they are to get fibre.

Posted by AndrueC 9 months ago
Er no, Krazy. That's the whole point of having this report. That's what why we're having this discussion!

We are currently paying BT to provide a line capable of voice and data transfer at a minimum of 28kb/s.

The whole point of this report is because everyone knows that's no longer good enough. We're asking what the minimum should be and if we're going to change the rules who should pay for it.

Posted by AndrueC 9 months ago
It's all very well asking BT to give us more but you can't just demand it. Their business model-rightly or wrongly-is based on the existing legally binding USO.

You can't just change the USO and expect BT take it up the bum and upgrade the network at cost. Not when the costs are so high and the RoI so questionable.

They have met their obligations for the last twenty years and if we want to change those obligations we have to be prepared to help out.

Posted by welshwarrior 9 months ago
What I don't agree with is that BT will still only be providing high speed Broadband to 90% of the UK population even though the other 10% will still be paying for it!

Unless they can guarantee getting it to everyone, why should people living in smaller towns and villages who have no chance of getting it be expected to pay the bigger towns and cities to get it?

Posted by Dawn_Falcon 9 months ago
welshwarrior - Well, bear in mind the fund isn't just or even mainly for BT. The other 10% will benefit from funding to wireless ISP's and so on.

AndrueC - Right. Ditch the margin squeeze test and change the infrastructure rules to allow BT to, among other things, set reasonable interchange standards...

Posted by dustofnations 9 months ago
My main concern would be that the levy will never be rescinded - a reason will be found for its indefinite existence after its original purpose has expired, after all governments aren't very good at removing taxation...

Posted by meldrew 9 months ago
I have fibre at the end of my drive but neither want nor need it. OTOH if I go over to VM will I save £6 per year....?!

Posted by TGVrecord 9 months ago
BT have been forced to accept other providers on their network, it only seems fair that organisations such as Virgin should share their fibre network with other providers?
Hopefully another ISP could provide the same high download speeds as Virgin without imposing Phorm technology.

Posted by Somerset 9 months ago
Dawn - what do you mean by 'reasonable interchange standards'?

Posted by Dixinormous 9 months ago
The margin squeeze test doesn't apply to next generation (such as FTTC) networks.

Posted by chrysalis 9 months ago
ian wants to deliver fibre to as many homes as possible? then why is he only rolling it to cabinets? seems whoever wrote his speech made a howler.

Posted by Dixinormous 9 months ago
No Chrysalis you know how it is. If there's fibre anywhere in the loop they are delivering fibre, just ask Virgin Media.

Posted by g-bhxu 9 months ago
"Carphone Warehouse are also wary, advising that the government will have to consult and justify the tax before being able to make it law"

There's no need.

This sort of thing is already happening to BT customers that have to pay the £1.50 a month for not paying by Direct Debit!

Posted by 2doorsbob 9 months ago
Providing fibre is rolled out quickly and is available to everyone either llu or wholesale i don't think it's a bad idea ..i least the government will not have to get further in debt lol ..but if we are to pay for it.. the job should be done right and if there are any pairs running to the home that are aluminium they should be replaced .

Posted by 2doorsbob 9 months ago
In an ideal world BT should start buying copper pair with fibre running down the middle of it ,therefore any local loop that needs replaceing or new builds ect will all be ready just to be connected up

Posted by Dawn_Falcon 9 months ago
Somerset - I mean cost+, not the current "fair competition" approach. The amount of + would need controlling, sure, but...

Dixi - Sure, as and when they have rolled out an entire FTTC network, then they can /start/ trials on non-MST products. Oops, massive mandated lag there.

Posted by jtthedevil 9 months ago
Somerset I was thinking along the same lines as you. Why don't BT have a list of cabinets to upgrade, then people connected to those can register their interest. BT can then target the cash to the areas that will want it and are prepared to pay for it.
As some have pointed out, most won't pay extra and will want the service for free. I certainly would pay extra, even to get an 8MB service.

Posted by amforbes 9 months ago
@krazykizza I find your post offensive, just because I live in a village does not make nor did I choose to live here, with the current housing situation I have zero chance of getting a house in the city.

Posted by amforbes 9 months ago
@g-bhxu damn right, those of us that cannot afford to pay via direct debit are unfairly penalised, what does this idiotic goverment do? Give BT the idea to charge us even more money. I'm not happy about the extra 50p either no doubt this will turn into another tax that will become perminate. Just like the "Road Fund" license which was originally introduced to fund the damn war.

Posted by Dixinormous 9 months ago
I'll repeat there are no price controls on FTTC, straight off the bat, no MST applies to wholesale FTTC products. As soon as the first cabinet is enabled services offered via it do not have the MST applied, this was a concession Ofcom gave BT to bribe them to deploy.

Posted by illus 9 months ago
As with British Rail, privitising British Telecom wasn't really a very clever idea.
They are not going to invest in running out fibre optic cables.
We will remain in the age of copper!

Posted by Somerset 9 months ago
amforbes - how can you not afford to pay by direct debit?

Posted by KarlAustin 9 months ago
illus - Privatising BT (well, GPO as was) was the best thing to do. We'd be in a far worse state right now, the privatised BT had to spend £bns on updated kit due to years of the govt. milking them for all the profits and not investing in infrastructure.

Posted by AndrueC 9 months ago
@Karl:For sure. Those of us old enough to remember life before BT wouldn't want to go back. I even remember having a party line and getting engaged tones after dialing the Plymouth exchange from Exeter. Not to mention dropped lines and nasty national call rates.

There are worse ways to run a national phone network than the way BT does it :)

Posted by Dawn_Falcon 9 months ago
I've lived in Hull for 6 months.

After dealing with Kingston Communications, I far less complaints about BT.

Posted by GMAN99 9 months ago
krazykizza "But people, we already pay £12 a month to them! Surely some of that is going to FTTC?" - This is a Government tax and nothing to do with your BT Phone Line rental. Obviously

Posted by tiggerrmummy 9 months ago
We are not doing this. it is unfair to ask people who dont want broadband or even a pc to pay for this. Its a stealth tax and like all the others, it will not pay for the new technology. So we will be leaving landlines and the broadband and seeing if there is something else we can do. If not bye bye internet, and actually I dont suppose we will miss it all that much.

Posted by Fixer109 9 months ago
All well and good talking about the 50p levy but also remember that the report also gave the green light to deep packet inspection.

Big brother is finally here and he's watching you and wait until you have to pay for the privilege of them doing so - the Government is certainly not going to pay for it.

BTW - The yanks have not been slow in reading the report considering the amount of publicity I've received for VPN software.

Posted by Dawn_Falcon 9 months ago
Um Fixer? The levy and DPI don't have anything to do with each other, they're seperate points.

Now, yea, the entire IP idioticy is the important bit I'll agree...

Posted by StephenJH 9 months ago
At the end of the day guys, I would pay an extra £1 a month for fibre to the home if it produced a significant broadband performance and additional services. We in Milton Keynes are never likely to get an alternative provider other than BT. If you want the service, then you have to pay for it! Remember the ADSL upgrade prices when the speed increased over the years?

Posted by nellienelnel 9 months ago
I have been told by Bt that as there are only six houses on our 4 mile road we wont even be updated to copper lines to speed up our internet speed never above 100.0 mbps so i guess i will still be paying the tax and be in the 10% that doesnt get it! (I was on a shared line until 3 years ago!!!)

Posted by Somerset 9 months ago
How did the shared line work, I thought they disappeared many years ago?

Posted by Dawn_Falcon 9 months ago
nellienelnel - Actually, that's both precisely the sort of situation which the fund is intended for and the sort of situation which will benefit heavily from FTTC.

Posted by Somerset 9 months ago
I suspect that it is likely that cabinets with few customers will not be upgraded as it would be difficult to justify the cost.

Posted by newwave19 9 months ago
Are BT going to initially work on the areas which can't get broadband through the phone line, or are they going to work on the areas which already get a good speed currently. My parents curremtly have a choice or paying for dail up internet (at a similar cost to broadband customers) or to put their hands in their pockets for satelitte broadband.....it would be unfair to think that they would have to pay this tax and be at the end of the list to get get the exchange updated

Posted by otester 9 months ago
The government exploits the hell out of us, the current MP 'expenses' thing is just scratching the surface.

A company friendly to an MP can get payed many times the amount actually necessary to fulfil contracts, in return the company guarantees the MP a job afterwards with rich rewards.

Posted by otester 9 months ago
In addition to my previous comment, the MP's do this for government contracts, not just themselves.

Posted by cyberdoyle 9 months ago
I wouldn't worry about the £6, it is a smokescreen to keep the press busy, it won't hit the statute books until after an election, and the cons will get in next time and won't pass it so it won't happen. worry not.

Posted by johnsizeland 9 months ago
Carphone Warehouse are also wary, advising that the government will have to consult and justify the tax before being able to make it law.
Since when???

Posted by markmck1a 9 months ago
FTTC now. Just do it.

Posted by XANTIA-1975 9 months ago
All a rip off. Virgin will be rubbing its hands especially if they drop the so called discounts on broadband as long as they take out phone line. All you do then is go with a Voip provider saving loads of money.... Yeah right

Posted by heather1 9 months ago
I bet they charge VAT on the 50p; so make that 65p or £7.80 pa.

I'm an OAP with minimal internet speeds. I voluntarily download next to nowt, use e-mail, BBC home page, government forms etc and virtually nothing else. I'm reasonably satisfied with that.

I can only afford that because TalkTalk throw it in with my 'phone bill for nothing. I hate to disappoint all your 'web wonders' but why can't servers charge on the basis of usage like telephones? Seems fair to me.

Posted by michaels_perry 9 months ago
The stupid fools think you have to dig holes everywhere to lay new fibre. Not true at all! Almost all rural areas are served via overhead lines on poles. Just string the fibre cable alongside the existing wires - job done! Much quicker and cheaper solution, saves time and money for everyone and gets decent broadband within reach of most homes with minimal disruption to traffic, farming, etc. Lets the workmen then concentrate on the urban problems and dig the holes needed there.
Rural is nothing like London!

Posted by otester 9 months ago
@heather1

The problem is BT charges ISPs a flat rate for the connection, then the cost of usage on top.

Then you have the line rental.

BT is ripping everyone off, so don't blame us 'web wonders'.

Posted by Dawn_Falcon 9 months ago
michaels_perry: And are you aware of the load and flexability problems associated with that? Not to mention the issues with coatings.

Cyberdoyle: And in the Conservative plans, there's some nasty stings in the telecom tax changes which will probably halt BT's fibre rollout.

Posted by mahame 9 months ago
Posted by Somerset: "How did the shared line work, I thought they disappeared many years ago?"

Many BT lines are still shared via an external DACS unit (http://frank.gwc.org.uk/~ali/dacs/) when there are insufficient copper pairs. ADSL services are not available over a line with DACS.

Posted by Fellwalker 9 months ago
The proposed tax is unjustifiable.
As an early adopter of firstly internet and then ADSL, I paid more than I do now. Will the Government refund me part of my early payments, as my payments have helped reduce the price for latecomers?
Sorry, I know the answer, I am just annoyed at the idea of making me pay AGAIN.
Will the MPs be able to claim it as expenses?

Posted by Dawn_Falcon 9 months ago
Fellwalker - Sure, just prove where you'ver paid the government for broadband.

...

Heh.

Posted by veryslowlyslowly 9 months ago
I agree with some posters. All I request from Bt is fair play. i.e why should I at present be charged a standard line rental for a sub standard service. My speed peeks (on very rare occasions) at 0.9 Mbps, whilst today I am seeing 0.2 Mbps
It must be common knowledge to Bt which area's are problematic by the amount of fault calls they receive, or is that technology beyond them, I think not! I say if they can not deliver, do not raise prices to make good, but reduce prices accordingly until they can justify the charge.

Posted by veryteknical 9 months ago
does anyone know if this proposed tax will apply to Virgin phone lines as well as BT lines?

Posted by dougk 9 months ago
Easy to cut the cost considerably without any cost to the tax payer or BT.
Use the people we already pay - eg the unemployed - especially the long term can't be bothered people - to earn their benefit they can dig the trenches.
We could also use community service to do the same - double the punishment and get "Free" labour.

Posted by Quark999 9 months ago
Why should some village at the end of the world get the same service than a town centre location? They don't have a big cinema, or a shopping centre, do they? Do they want that as well? I'm not asking the people in Spain to pay me money because their weather is better. I think the changed USO addresses this nicely, you get Aldi internet so you can survive, and for the full M&S internet you have to move or pay through the nose. But you get fresh air and no congestion in exchange. Your choice.

Posted by Dawn_Falcon 9 months ago
dougk - Congratulations, you now have a government dependent on slave labour. This is a terrible precident to set, and wages will drop over a five year period - 15% is not an unreasonable figure.

veryslowlyslowly - Have you plugged the modem into the master BT socket? And sure, a 10% discount for a cap is np...new contract to raise it ofc.

Posted by pgregg 9 months ago
To all the commenters complaining why they, in the fast city, should subsidise the rural peasants - consider this:

The peasants are paying exactly the same as you pay each month - you are eating 8Mb+, they are eating 512kbps-1Mb (if lucky).

Who is subsidising who today?

Posted by Somerset 9 months ago
dougk - can 'the unemployed' drive JCBs and splice fibre?

Posted by GMAN99 9 months ago
"Posted by veryteknical about 10 hours ago
does anyone know if this proposed tax will apply to Virgin phone lines as well as BT lines?"

I believe so :o)

Posted by bigbadpirate 9 months ago
this tax isnt taken by BT is it? so the goverment can give whoever they want the cash. unless they take it all out in expen..............

Posted by bigbadpirate 9 months ago
sad thing is that the goverment have had to jump in because the monopoly that was was only interested in giving short term profit to their investors.

Posted by bigbadpirate 9 months ago
**** BT time to move on

Posted by chrysalis 9 months ago
I see 2 days later my point remains valid, the 50p tax is distracting everyone, all worried about their own pockets. The ofcom censorship is a far bigger issue than £6 a year.

Posted by GMAN99 9 months ago
"Posted by bigbadpirate about 13 hours ago
**** BT time to move on "

BT? You mean the government surely, as already stated its a government tax

Posted by dougk 9 months ago
Dawn_Falcon - Why should I pay fro them to either sit on their backsides or take up criminal activities. Its called repaying their debt to society and be part of the community. Ok then it you are unemployed pay them nothing at all like happens in many other countries.

Somerset - possibly not but they can use a spade or pick axe - not always necc. to use technology to do a job.

Posted by GMAN99 9 months ago
This is going so far off topic I'm going to need to keep my 50p this month to get back to the original discussion on the bus

Posted by Dawn_Falcon 9 months ago
dougk - Becuase you very rapidly drive down wages and drive crime up, because people are not stupid and won't engage in slave labour for the minimal amounts avaliable on the dole. The UK pays far /less/ dole than most EU countries, and without the social agreements many have.

By "many other countries", you mean "America", and only to a limited extent.

chrysalis - right.

Posted by Somerset 9 months ago
dough - provided they are bright enough to use a spade. Anyway a JCB does the job faster and better.

What about the fibre splicing?

Posted by Dawn_Falcon 9 months ago
Heh. I' like to see people with spades digging trenches to the appropriate standards, especially in towns (asphelt!), and for the time, disruption (remembering you need permission to dig up the roads...) and cost to be actually lower than doing it properly with a construction firm...

...and let's not forget you're putting the construction firm and the trickle-down jobs from that out of business as well, so...

Posted by andys999 9 months ago
Well all i can say is get rid of hard wired broadband!!seriously if you go for it get a buisness on e with i.e pipex on adsl 2 or just go to argos for £29.99 plug a dongle in with 3 voda ect.mobile is the way to go no doubt.
it will take years for bt to sort thereselves out.with dongles,no mac codes,indian call centres,connection fees,plug and go within 5 mins of loading software,easy forget bt!!!

Posted by Dawn_Falcon 9 months ago
Sure, all you need to be willing to do is pay the extortionate charges and suffer contention...for what is usually a feed off ADSL to the tower.

Posted by pcoventry76 9 months ago
BT lost the race 10 years ago when cable was rolled out.

However I wish them all the best with this. I for one will not be paying for it.

Posted by Dawn_Falcon 9 months ago
Someone rolled out cable to the same penetration as ADSL and actually offers a deacent service across it in the UK?

Great, who?

Posted by Dawn_Falcon 9 months ago
(Oh, and remember that BT was /not allowed/ to participate in the cable rollout...)

Posted by Alfd1234 9 months ago
Look on the bright side. I'm rural. My BT landline was delivering downloads at no better than 1600 Kbps before May this year. Now I'm regularly hitting 2800 Kbps. But the down side (do I mean up side) is that uploading has stuck stubbornly at 360Kbps

Posted by cyberdoyle 9 months ago
'Posted by Somerset 12 days ago
dougk - can 'the unemployed' drive JCBs and splice fibre? '
They can be trained to do anything if they want a job. Two rural housewives laid and lit a kilometre of fibre just to prove it can be done. If they can do it then anyone can. Get out of the box, JFDI. google 'wennetvideo' if you want to see the action.

Posted by dragon1945 9 months ago
I'm one of the 10% who will never get Fibre, yet I'm supposed to pay extra tax on my pension so others can have it? If we aren't included in the fibre roll-out we shouldn't be expected to pay this tax.

Posted by Dawn_Falcon 9 months ago
How do you know you are? And this is a tax on landlines, not pensions, please pay attention.

Posted by Essex 8 months ago
Another 'Stealth tax' And how will retired pensioners pay for it. Presumbably out of the 10p a week rise of their already EU low state pension.
As always with labour. Headline grabbing with no real thought. Who will be excempt, and who 'wants' to be exempt. As for BT, well they were years behind the last nonsense,hence their massive loss's. How much more will BT lose when people have to wait 'another 6 years before completion? We are always 'Catch Up Britain.