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How a £2 a month broadband 'tax' could deliver next-generation services
Wednesday 08 July 2009 16:27:56 by John Hunt

Analyst firm Point Topic says Britain could get next-generation broadband (what they dub 'superband') for just £2 per month extra on the broadband bill; 50p being the so called 'Carter Tax' on every phone line which is expected to net around £170m a year, and the extra £1.50 coming from an increase in the cost of broadband to get a better service. This could get next-generation services to more than 90% of homes by 2015 they claim.

Their analysis is based on dividing the country into 4 areas based on broadband density. Area A represents where market demand will finance next-generation services and area D the remote areas where case-by-case solutions may be needed to provide broadband. They estimate that 73% of the population fits into area A, which covers only 3.7% of the land area (blue on the map). Conversely area D covers 4.4% of the population but 75% of the land area (red on the map).

Click map for enlarged image

Consumers already pay extra for faster services- Virgin Media's 50Mbps comes at a £15 a month premium over their next fastest 20Mbps service. With £1.50 a month extra on top of current broadband prices Point Topic believe that area B (thinly spread suburbs, villages and rural fringes) covering 19% of the population could be covered with a subsidy from the Carter Tax of £70m, driving coverage up to 92%.

Area C with 3.4% of the population, covering small villages and hamlets, would need a subsidy of around £125m, equating to about £135 per household per year. The most rural area, D, with only 4.4% of the population may be looking at do-it-yourself solutions such as microwave links. Satellite broadband could be another option, but rural areas also have the benefit of a low cost to dig trenches to put in cables.

So what would people actually receive for this small increase in broadband prices? New services are already delivering fast peak speeds- Virgin Media at 50Mbps, and BT's fibre to the cabinet FTTC trial which launched at the start of July delivering 40Mbps over the phone line. Point Topic believe that people want a more stable and sustained broadband speed so they can use the applications they want, rather than just fast headline speeds.

"People shouldn't be asked to pay this tax unless they're going to get something really worthwhile for it. That's why Point Topic believes it must deliver a service which is fit for the 2010s.

"'Superband' should deliver much more than higher speeds. People want to watch BBC iPlayer for example, and have it run smoothly. They want to Skype each other and get a good picture. They want to play interactive games together when they're miles apart. They want to be able to work from home efficiently and access the company network as if they were in the office.

"These are all things which don't need huge download speeds. What they do need is continuous, steady speeds, so people can get committed bandwidth for as long as they need it. They want other things too such as good upstream speeds for two-way video and the quickest possible end-to-end speeds for gaming."

Tim Johnson (Chief Analyst), Point Topic

It is true that the average user doesn't care about the actual numbers- they just want to know the broadband will do everything they need it to, without the threat of running in to broken connections, traffic shaping or large bills. Whether this £2 a month broadband 'tax' would liberate broadband in this way is uncertain, considering the investment in the backend networks also needed to support it.


Posted by Somerset over 8 years ago
And what technology will be used? Is there a link to the actual report?
Posted by TonyHoyle over 8 years ago
"What they do need is continuous, steady speeds, so people can get committed bandwidth for as long as they need it."

These guys sounds like ex BT Broadband customers or something. Any ISP worthy of the name can *already* deliver those kind of speeds consistently. It's not even a high barrier... a *good* ISP should be delivering your full sync speed consistently, never mind enough to watch iplayer.
Posted by kawasakiMan over 8 years ago
The reality is, yes we would all pay a little extra for a better quality service. HOWEVER, we already pay for unlimited services which are then capped & restricted as and when it suits our ISP's. The deal has to include a law binding promise from the ISP's that they wont simply charge us more for the extra speed and quality of the new system, once it is in place. After all we will have paid for a lot of its development.
Personnaly, I think we would end up paying the tax, and then paying extra for the improvements down the line.
Posted by bookey over 8 years ago
Can we see a more detailed map?
Posted by citizenx over 8 years ago
This is getting beyond the joke.

I pay as much as i'm prepared to for *MY* service, I DO NOT require another generation of broadband and don't think *I* should be forced to pay extra to:

a). Get people who probably live in a better environment than i do a faster service. Move if you don't like it.

b). Fund the next income stream for private companies.
Posted by AndrueC over 8 years ago
@TonyHoyle:Sadly there aren't many good ISPs. There's a few (I use one) but most experience some slow down at peak hours.
Posted by citizenx over 8 years ago
>The reality is, yes we would all pay a little extra for a better quality service

No we wouldn't!

My service is top notch. Probably as its not DSL.
Posted by otester over 8 years ago
If BT had is infrastructure monopoly taken away, there would be no more problems.

However as we live in a 'free' country this won't happen.
Posted by krazykizza over 8 years ago
I see that im in the blue area which is weird as my exchange is market 1 with only one LLU and one on its way. Strange. Ohh well, roll on fiber for this small but fairly large town!
Posted by broadbandmac over 8 years ago
Will any of use receive a share in the profits made by this next generation broadband which we could be asked to pay for ?
Posted by gc01 over 8 years ago
Where I live (rural Wales) the map is almost constant read (category D), most of the North of England, Scotland and Northern Ireland are the same. FTTC is never going to be installed here as there are no cabinets (all overhead cables) . I doubt if wireless will ever be cost effective in these areas. Why doesn't somebody develop a simple device that fits part way along the copper line to regenerate the used frequency channels (e.g. so a 7 Km long line becomes effectively two 3.5 Km lines end to end) ?
I'd be very happy if my present 600-700 Kbps service could be increased to 2 Mbps.
Posted by amforbes over 8 years ago
No way I will pay an extra £2 a month which will be years before I see the benefit of it, I already pay enough for my crap 1mb line that barely exceeds 512K at times.
Posted by amforbes over 8 years ago
Correcting my previous post my speed is currently at 252Kpbs Grrrr.
Posted by AndrueC over 8 years ago
@amforbes:From your description there is nothing wrong with your line (it exceeds the existing legal requirements). It simply needs to be upgraded or replaced with something better. I'm sorry to burst your bubble but bandwidth and a good connection costs money. /Someone/ has to pay to upgrade it.

It's called The Real World and just because we're talking about the Internet doesn't change things.

Can't pay=won't get.
Posted by AndrueC over 8 years ago
..companies will roll-out ahead of demand up to a point but how far they go depends on what return they expect. Since most ISPs are already operating at a loss such a roll-out is bound to be limited.

We all get broadband at a very low price and if we want a better service we have to expect to pay more. You don't expect to move to a bigger house without taking out a bigger mortgage - why do so many people think that broadband doesn't work like everything else?
Posted by citizenx over 8 years ago
I don't expect to have to pay part of someone elses mortgage or help their bank profit when i'm more than happy with my service. Its principle rather than the cost itself.
Posted by Dixinormous over 8 years ago
AndrueC - it would appear that as far as broadband goes the socialist republic of UKistan's way is to dip into tax payer's pockets on the advice of the unelected both to supply computers to those who can't/won't buy them, and then to upgrade the broadband lines in areas where companies don't consider it viable.

Unsure when I moved to a communist country...
Posted by Dawn_Falcon over 8 years ago
gc01 - Unfortunately you can't do that with ADSL. You can with ISDN, but that's not really helpful..

Dixi - That would be when you left Britian.

In any case, bluntly, I'd need to see their working.
Posted by Capn over 8 years ago
I have no objections to paying extra to help improve my connection. Thousands in this country would love a symmetric 100mbit service however several of their neighbours wouldn't.
The fairest way would be a council wide poll on how many are willing to pay extra. Allow, say 6 months for people to drum up support and educate people about the benefits. Then if a certain economical percentage of people want it then they can pay a bit extra to the companies.
Posted by AndrueC over 8 years ago
@Dix:Unfortunately it's totally impractical to upgrade connections on an individual basis so some element of 'community payment' is going to be needed.

If those on the poorest lines refuse to help out then they are the ones who will lose. They are likely to be the most difficult people to upgrade and the ones where the RoI is a lot lower.

Those are the people that need to be arguing for some kind of tax rather than getting all pissy and refusing to pay more to get more.
Posted by AndrueC over 8 years ago's hard enough to provide them with any kind of service for the same price as everyone else. Upgrading what they have already whilst maintaining the same price is out of the question.

We'd need to see more details but if people only pay for their own upgrades then the roll-out will be very slow. If those on a bad line won't pay then they won't see an upgrade and as ADSL is supplanted by fibre those people might even lose what they already have. There might come a time when the running costs of a few ADSL lines make them unviable.
Posted by john (Favicon staff member) over 8 years ago
gc01: There is no reason why they couldn't run fibre on the polls. I believe they do this in some areas of the US, but it does seem to be something that is rarely mentioned.
Posted by Colin_London over 8 years ago
gc01 - Such a devide would have to individually amplify each DSL circuit in the mulipair cable, and would need a power source. It's this that makes it expensive. They could start mounting solar panels on the poles to power them, but adding active devices like this in remote locations and the maintenance costs greatly rack up. Fibre is the answer.
Posted by cjbell68 over 8 years ago
I live in a rural area and I would pay the levy. Investment is needed if we're to avoid a speed divide and I can't see everyone in my village volunteering to pay, let alone anyone in the private sector investing in rural areas for a low ROI. That said if we pay up it'd be nice if we could get some kind of financial benefit down the line as well.
Posted by pcoventry76 over 8 years ago
@ TonyHoyle.

ISP´s don´t control the sync speed that´s all done by the BT network and the exchange and DLM

This site tells you how ADSL in the UK works. Please, go read it.
Posted by cjbell68 over 8 years ago
@ TonyHoyle:
pcoventry76's comment prompts me to add - Plusnet consistently deliver download speeds linked to my sync speed - all 2mbits of it...
Posted by Frank22 over 8 years ago
John - Why look at the USA? People voting for FTTH is happening next door in holland ( There companies, not the likes of BT, are providing FTTH once 40% of people living in a town or village have voted to have FTTH. The fibre is used for internet, (HD) TV and radio. Why does that not happen in the UK?
Posted by Frank22 over 8 years ago
I forgot, it is also used for the telephone. Therefore each household only requires one connection for all the services.
Posted by Dixinormous over 8 years ago
gc01 - there are DSL regenerators which will improve performance though these are pretty expensive and need a lot of juice fired down the phone line. The question has to be asked if it's worth it.

Frank22 - the issues are largely political. We try and make out we're all free market while simultaneously being socialistic and getting the best of neither.
Posted by Dixinormous over 8 years ago
pcov / cjb Tony's point wasn't anything to do with sync speeds apart from that the ISP should have the capacity to saturate a customer's connection regardless of their sync speed. He wasn't saying that all ISPs couldn't do it nor that they had any control over it.
Posted by cjbell68 over 8 years ago
Dixi, my comment was meant to be ironic - highlighting the ease at which a 2meg connection can be saturated. I can get continuous steady speeds - they're just not very high!
Posted by Dawn_Falcon over 8 years ago
Sure Frank, and what's their coverage like? 5%? 10%? 40% of an area is a very, very large number of people to convince to sign up to an expensive service.

john - Um, there are weight and flexability issues with fibre on poles.
Posted by john (Favicon staff member) over 8 years ago
Dawn_Falcon: I don't think the weight of fibre would be more than copper. You only need one fibre on the poles to a cabinet (well preferably more for redundancy), where as at the moment they run hundreds of pairs of copper.
Posted by Frank22 over 8 years ago
Dawn_Falcon - It works by splitting a town or village in areas. Once an area has sufficient votes, the rolling out of fibre in the area commences. My sister already has a connection and my brother, living in the east of holland, will get a connection too.
I my brother's case, the village is divided in several areas. An area gets FTTH once 40% (No more than hudruds of homes) have agreed to get the connection.
Posted by Dawn_Falcon over 8 years ago
Yep, and 40% is *extremely* high, by civil planning standards.
Posted by Nevilledart over 8 years ago
I already pay for a broadband service that is never ever delivered. Do I get a tax rebate for that? Does it give me a right to receive what I apy for. I say the whole industry needs to be scrapped and replaced on one based on service delivery - pay for what you get!
Posted by Dawn_Falcon over 8 years ago
Great. When you get round to changing the laws of physics or accept a 10% discount for being capped at 1MBit, get back to me.
Posted by vicdupreez over 8 years ago
Well, I emailed BT's Ian Livingstone, and offered to pay 2k for fiber to the house. I did the calculation on what BT said it would cost to bring fiber to 100% of homes months ago, some £50 billion divided by 25 million lines. I got told no thanks and you have no chance of ever getting fiber... So paying £2 to get the blokes in London fiber, I do not think so... Also, there will need to be a MAJOR rethink on the part of ISP's before fiber is offered. Having a 3gig cap on a 100meg fiber connection is crazy...

Posted by yobrenoops over 8 years ago
Theres such an enablement culture being discussed here. There is frankly no commercial reason for a company to install SFBB to a rural village, hamlet, farm even satellite town where the business case doesn't believe it will give a good ROI. Particularly the way the economy is now.

Read the article, see how sparsely populated the majority of the country actually is, now thing that for that small percentage of customers, the MAJORITY of fibre would have to be laid!

Is that fair? They choose to live where they do and should deal with the consequences.
Posted by yobrenoops over 8 years ago

On the other hand, where the lineplant has gone all wonky in a town/city due to motorways or aluminium cabling etc I'm all for some kind of uplift programme because it would be beneficial. But if someone lives in a Market town or village they chose a more rural life, you cannot expect to be top or even middle of the list!
Posted by Frank22 over 8 years ago
Dawn - 40% seems high. However, if you go to (and use google translator), you find that in most neighbourhoods the 40% is exceeded after a 6 month period.
The scheme also includes tiny hamlets.
The cost for the package is 50 Euro (Approx 45Pounds). This is for a 50mbps symmetrical connection (And it is really that fast!), telephone, (HD) TV and radio.
I think the UK should have similar private enterprise initiatives.
Posted by Frank22 over 8 years ago

It will get BT installing fibre networks straightaway too, because once a town/village has a fibre network by a private enterprise, BT has lost all potential business from the entire town/village.
Posted by pyeomans over 8 years ago
Why should my parents who don't have or want broadband pay a premium for the ones who do have or want broadband! Ridiculous.
Posted by Dawn_Falcon over 8 years ago
vicdupreez - £20k would be more like it for single rollouts. And I'd like a link to your workings, thanks.

Frank22 - And that's expensive as heck. You make me wonder if hard selling tactics are being used, honestly. And there is nothing stopping anyone from trying just that...

pyeomans - Because a dying stone-age breed are less and less relevant to the country's future.
Posted by Somerset over 8 years ago
Frank22 - so why aren't VM doing this?

So XMSNet want 40% of people to sign up to change ISP?
Posted by chrysalis over 8 years ago
with the village areas getting lots of public sympathy I am curious what is to happen to the urban areas that are in regions with 'poor takeup' as dawn_falcon told me in the other topic. Will it be embarassing to have inner city areas left behind?
Posted by cyberdoyle over 8 years ago
no more embarrassing than the whole country being left behind which is what is going to happen. Other countries will be getting 100meg or gig connections. They won't want to connect to superslow countries. UKplc is gonna drop off the radar.
Posted by Somerset over 8 years ago
cyberdoyle - 'They won't want to connect to superslow countries' - what are you talking about?
Posted by Dawn_Falcon over 8 years ago
UKplc in terms of the major companies is certainly /not/ using ADSL. There is a bit of a case for our wholesale bandwidth pricing being a bit off, but it's hardly to the "drop of the radar" point.

More, a far more limited percentage of people in other countries will be getting those connections, yes...
Posted by dragon1945 over 8 years ago
I am not willing to pay the proposed 50P a month tax, let alone £2. BT still say my line can only support 512 Kbps, and no hope of any increase. However, thanks to Talktalk I get 1.79 MB on the same phone line. BT lost a potential customer for BB, plus my phone line rental and call costs with it. If BT won't roll out fibre here, then why should I pay for townies high speed access? We have as much hope of getting cable TV as getting fibre. Which is to say 0%.
Posted by Guest_Again over 8 years ago
I don't like the idea of the 'tsx' on broadband, but if it gets the speeds up higher for everyone, bring it on.
Thankfully I already get good speeds with Be*, but more is ALWAYS better EG: remember how 512kb was soooo much better and faster than dialup (except for some folks on Tsk..Tsk..Tskcali and the like) - most were happy with that. And then ONE meg came out that is. It was of course dearer, but, given the chance..
Posted by Fellwalker over 8 years ago
why should I pay for the quicker access of others? As an earlier adopter I have already paid the premium for that. No one offered to help me. Prices for broadband now are much cheaper even in £ terms, let alone in real terms. Indeed, the monthly cost is now under HALF of what I first paid in 2001.
Can I have a discount?
Posted by heather1 over 8 years ago
Posted by Pellyman.
I'm 75 years old so 2015 is probably a bit optimistic for me. Can I get a reduction on the £2, please?
Do I really have to pay over £100 a year so some users can play games - really important that!
Email, BBC web site, Banking and Vehicle Licence etc. are about all I use or need.
If I'm on the 'phone all day, I pay more. Is it impossible for ISPs to charge in relation to broadband usage? Seems fairer to me.
Posted by Toddy15 over 8 years ago
Out of all the areas listed for this rollout Northern gets just two exchanges upgraded compared to the rest of the UK. Can anyone else see the unfairness from BT here or is it just me. They (BT) are still making millions in profit yet they are still moaning about the cost yet if they had done it years ago when they knew about fibre optics they would not now need to go to the cabinet they could have been installing fibre to the home from the the early 1980,s Bah Humbug.
Posted by Dixinormous over 8 years ago
No I can't see the unfairness, for the now 4,000th time it's the first 15% of the total, loads more to go!
Posted by Somerset over 8 years ago
Toddy15 - BT wanted to roll out FTTH years ago but the government wouldn't let them.

Why is it unfair? Because your exchange is not on the list?
Posted by Dawn_Falcon over 8 years ago
You're making me agree with Dixi. Stop. (lol)

heather1 - An awful lot of the cost isn't related to speeds though, like helpdesks...
Posted by amforbes over 8 years ago
Stone age technology blame B.T. blame the government I'm sure there's plenty of blame to go around. All I want is a reliable internet connection that I can use for some tv watching, you tube and other things. I know I'm going a bit O/T here but why is it when there's a push for faster Net speeds our elected officials jump on the bandwagon saying that it will be used for piracy.

Someone needs to tell them not everyone lives in a city or close to an exchange!
Posted by kawasakiMan over 8 years ago
The big problem is the ISP's pay up front with no promises of speed or quality attitude. Why should anyone pay more, without getting any assurance that their own service will improve ?
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