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Pre-budget report and broadband
Thursday 10 December 2009 10:42:04 by Andrew Ferguson

It is unusual for broadband to figure in budget speeches, but since the announcement of the 50p levy on each fixed telephone line it was inevitable that more of a mention would be made. Alas for those looking for the full detail they still have to await the announcement of the finance bill.

Broadband received several mentions (the various documents are listed on BBC News Online:

Infrastructure UK’s initial work programme will also include:

  • supporting BIS in delivering a Universal Service Commitment in broadband by 2012 and providing further support to achieve private sector roll-out of next generation broadband to 90 per cent of the population by 2017.

4.43 The £750 million Strategic Investment Fund was introduced in Budget 2009 to support advanced, innovative industrial projects of strategic importance, including £250 million for low-carbon projects. Box 4.3 sets out the projects benefiting from investment from the Fund so far.

[..]

  • a contribution to the total Government investment of £200 million for the roll-out of universal broadband under the Digital Britain programme;

4.46 Digital Britain also announced a duty on fixed telephone lines to be used to help encourage private sector investment in digital infrastructure. A consultation on the practical aspects of the new Landline Duty will be launched shortly and will be followed by a consultation on the procurement approach to investing in Next Generation Access.

Broadband coverage in Pre-Budget report

So that is it, while the tax is mentioned, the exact amount is not, so the presumption is that it remains at 50p per month and the exemptions are yet to be formally announced. The wording is perhaps a little different, suggesting less that the fund which might have raised £1.5 billion by 2017 will be used to solely fund next generation roll-outs, but used as part funding in conjunction with money from the private sector.

With two consultation periods and a general election that has to happen by early June 2010 getting the duty into place is going to be a rushed job, and with the Conservatives saying they will abolish the tax there is a real possibility that the next six months or so of uncertainty may delay private investment in next generation networks.

Of some concern in the media coverage of the telephone tax is that it is being pushed as a tax to fund roll-outs in rural areas, when the reality is that there will be plenty of people in towns and cities that will benefit from assisted roll-out of next generation broadband technologies. We are already seeing a rise in complaints against Openreach with its roll-out of FTTC not necessarily enabling all cabinets on an individual exchange. One final point is the the levy has only ever been suggested as increasing next generation coverage to around 90% of households, which is well short of current broadband coverage levels.

Comments

Posted by otester over 7 years ago
This will not help people in rural areas, it's just another revenue source for BT.

It will most likely end up like fuel duty, ever creeping upwards...
Posted by cjbell68 over 7 years ago
Otester I sort-of agree - It MIGHT become another revenue source for BT if the specifics aren't managed well (technology, geography).

Or it could be diverted away from broadband which would also be bad.

"roll-out of next generation broadband"...I like that bit but also open to interpretation and abuse: e.g. mis-selling of BET.

The government should make sure its true NGA, be sure they don't get ripped off on the cost and be sure they get the coverage right.
Posted by andrew (Favicon staff member) over 7 years ago
BET does not fit any definition of next-gen broadband, but may get some money from the £200m mentioned, if the Network Development Procurement Group awards some work to Openreach that utilises BET.

NDPG has no staff yet, wait until the New Year, and we should here more, but this gives them a tight timescale to get things done by 2012.
Posted by cyberdoyle over 7 years ago
even with a tight timescale there is no earthly reason to deploy BET, it is a scandal waiting to happen...
Posted by johnb2008 over 7 years ago
Winston Churchill introduced Vehicle Exise Duty/Road Fund Tax (Licence Disc)to be spent on improving roads..............We all know where that went!
The landline tax may be spent on broadband for a couple of months,but then it will increase and become part of general taxation.
Posted by Dawn_Falcon over 7 years ago
No Carpet, there's absolutely no reason to connect up 10-15km long lines from a business perspective whatsoever. It's a small number of lines, and the drive to include them is something you'd only expect from a government concerned with digital inclusion.

Given that there's no realistic chance of, within a decade and more, fibre runs that long for individual properties, you're simply against them having broadband. Very...unprogressive, as is typical of your views.
Posted by KeithJillings over 7 years ago
Rural users are already surcharged for broadband thanks to Ofcom. This money won't go to help them. It's just another stealth tax.
Posted by windboy001 over 7 years ago
very nice
Posted by cjbell68 over 7 years ago
I imagine 90% should be on true NGA access, funding BET for the 10% locations if there is cash left. The government need a strategy for inclusion for the 10% eventually.
Posted by mishminx over 7 years ago
With an election in the offing you would expect some reduction in activity anyway. Regardless of the dodgy tax demands of the champagne socialists.
Posted by Dawn_Falcon over 7 years ago
KeithJillings - Oh? And where is this surcharge on their bill? Urban users have effectively heavily funded the rollout, so far.
Posted by Somerset over 7 years ago
Cyberdoyle - Why is BET a 'scandal'?

KJ - What is the 'surcharge'?
Posted by CARPETBURN over 7 years ago
quote"Alas for those looking for the full detail they still have to await the announcement of the finance bill."

Which like everything recently wont add up correctly
Posted by CARPETBURN over 7 years ago
quote"No Carpet, there's absolutely no reason to connect up 10-15km long lines from a business perspective whatsoever. It's a small number of lines, and the drive to include them is something you'd only expect from a government concerned with digital inclusion.

Given that there's no realistic chance of, within a decade and more, fibre runs that long for individual properties, you're simply against them having broadband. Very...unprogressive, as is typical of your views."

Who is that a reply to???..... I hadnt even commented prior to that babble!
Posted by wirelesspacman over 7 years ago
Don't worry, she's just having another rant :-)
Posted by Dawn_Falcon over 7 years ago
wirelesspacman - Do tell who you're refering to, it's not me (hint - "Dawn Falcon" is not a female reference).

And Carpet, your socket puppet dosn't fool me.
Posted by CARPETBURN over 7 years ago
^^^ WTF are you talking about now? Are you suggesting i have more than one username here? Its not even clear who you are speaking to or calling a "socket puppet" whatever that means.... Get the doctor to change your meds. Replying to someone when they havent said anything is nuttier than a jar of Sun-pat
Posted by Wizmartin over 7 years ago
Not entirely sure why it is regarded as a "good thing" that dwellers of urban squalor should further subsidise rural types who i) mostly choose to live in remote and inaccessible locations for their own reasons and ii) do their darndest to selfishly protect "their" countryside from allowing much needed homes to be built for "townies" who have to fight over less than 10% of the UK's built land surface to find a space for a home.

Remember agriculture in the UK requires approximately 50% of the available land and yet only contributes less than 0.5% to GDP.

Posted by pet2000 over 7 years ago
When I pay tax for something, I expect public ownership. I am not paying tax for privately own enterprises (BT in this case), that would be against my understanding of what tax is. Someone should challenge this to the High Court.
Posted by Dawn_Falcon over 7 years ago
That's nice.

Please, show how this money is automatically going to BT, how BT is not paying out more money specifically because of government regulations (i.e. under-cost provision of LLU services), etc.

Simply because you have a flawed understanding of both the law and the situation...

Carpetburn - Oh look, De Nile.
Posted by tonyevic over 7 years ago
It would seem that many of you are mis informed.
This is NOT a levy paid to BT nor a levy instigated by BT.
ALL COMMUNICATION PROVIDERS will have to bid for the right to get the contract (including BT)to get their fingers on the £170 million or so funds made available from this tax, to supply lines for 'Digital Britain'
Posted by CARPETBURN over 7 years ago
quote"Carpetburn - Oh look, De Nile."

Lets hope you drown in it!
Posted by Dawn_Falcon over 7 years ago
You're the one indulging Carpet, not me.
Posted by CARPETBURN over 7 years ago
quote"You're the one indulging Carpet, not me."

And you are the one that replies to me when i havent even said anything. I trust the shock therapy isnt working.
Posted by grampar over 7 years ago
As I have had serious problems with B.T. and my daughter and I are tied to a BROADBAND contract for some months, the very thought of paying them another £2 per quarter for a line rental increase is even more offensive than their £4.50 charge for not paying by direct debit or online. As I continue to have a service problem with my broadband I fear that further comment would be spurious as this Government will steam roller it's policies irrespective of public opinion and B.T. will right it's own rules while they have a near monoploy on line rental. Grampar
Posted by Dawn_Falcon over 7 years ago
Wait, there's a line rental increase? Link please.

The article is referring to a *tax*, not a line rental increase, and is something the Government, not BT, is imposing.

So...link.
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