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Who should pay for universal broadband?
Sunday 04 April 2010 06:50:19 by Sebastien Lahtinen

The government is proposing that public funds will be used to subsidise rollout of broadband to ensure that virtually everyone in the UK will be able to receive a 2Mbps service by 2012. In addition to this, they will be introduce a 50 pence per month levy on phone lines, dubbed the 'broadband tax' to help deliver next-generation broadband to 90% of the UK, targeting the funds for the hardest to reach areas.

The timing of any government intervention in relation to next generation broadband is a source of debate with wide ranging views both within the political parties and within the communities at large. Some economists have argued that it is too early to spend public money on next-generation broadband as doing so could dissuade the competitive market from doing so on its own.

In a survey we carried out from 11 to 18 March 2010 with over 2000 responses, the support for government intervention was quite strong. In general terms, we had a relatively balanced group of respondents from the urban, sub-urban and rural areas:

Chart showing generally even spread of respondents from city/town centres, suburbs, villages and around 8% from more rural areas.

Should the government subsidise (from taxation) 'up to 2 Mbps' broadband in those areas where the cost of building infrastructure is very high?

There was general support for the government to fund basic broadband services rollout across all groups of respondents, although as expected, those living in villages or rural areas were more likely to support such a policy (66-73%) whilst those in urban and suburban areas were slightly less supportive (52-53%):

Chart indicating general support for government funding of 2Mbps broadband services. Those in cities, towns and suburbs were slightly less keen although most still supported the proposal.

Should the government subsidise 'next-generation' (25Mbps+) broadband in those areas?

There was a negligible difference in the support for government funding of next generation broadband services. Overall, 56% of users supported funding for next-generation services whilst 58% supported the 2Mbps minimum service. However, less than half of those in urban areas (47%) and the suburbs (48%) would support funding of nextgen services.

Chart showing support for government funding of next generation broadband (25Mbps and faster). Although the majority favour the proposa, those in cities, towns and suburbs are more skeptical.

As the survey was carried out on the thinkbroadband website, it will show a bias towards those persons who are interested in broadband services, however it does suggest that there is strong support within the connected communities to help spread the benefits of Internet access to everyone.

Comments

Posted by cyberdoyle over 6 years ago
Its a shame all those who don't have broadband couldn't vote in the survey. I don't think anyone realises just how many there are. Or how many have very poor connections. Its time we got cracking and got the infrastructure fixed before it is too late, and narrowband copper digitalbritain gets left behind the rest of the world. The return on investment is for the people and the government. The telcos get a return on copper throttling, why should they invest? The trick is to get fibre to the final third, and the market will rush to keep up.
Posted by cyberdoyle over 6 years ago
It actually would make more sense for the government to drop the tax on lighting fibre which is stopping private investment. This would make no difference to their coffers, cos they won't get it if they leave it on, because nobody can afford to do it.
They can then tax it in the years to come once the benefits are apparent, or they could scrap it because getting everyone onto next gen fibre access will save the government a packet.
Why tax the seed corn? Far better to reap the harvest.
Posted by drteeth over 6 years ago
People who live in the sticks don't have gas mains and have to use septic tanks if they are too far from civilisation...their choice. Now they expect the country to pay to they can get fast broadband? They are having a laugh.
Posted by jtthedevil over 6 years ago
I'm sure you don't mind getting the same water and electricity services as the people in the country who live beside the supplies? All for no extra cost to you.
Think its you who is having a laugh my friend...
Posted by mr_optimistic over 6 years ago
Well, I live in the country, have no gas or sewage and can't do much better than 2Mbs. I can't see why there should be any tax for this at all. The internet isn't essential and this whole idea is just a gimmick to give the impression of a fwd looking government. Tax is an imposition and shouldn't be encouraged lightly. Start a charity if you feel that strongly about it.
Posted by CARPETBURN over 6 years ago
quote"I'm sure you don't mind getting the same water and electricity services as the people in the country who live beside the supplies? All for no extra cost to you."
You live next to a power station in the country? and a water treatment works?
I think you will find coal fired power stations are pretty well spread throughout the UK not just out in the country.
Posted by CARPETBURN over 6 years ago
You also dont realise theres more people in a suburban area and they actually are the ones that mean there are even electricity companies in business? There wouldnt be the funding from just a few villagers. Have you considered moving and helping the economy? That way you wont be unhappy next to a power station, you can fund financial growth and also end up somewhere with good broadband speed.... Every one wins.
Posted by herdwick over 6 years ago
"Its a shame all those who don't have broadband couldn't vote in the survey." - this site works on dialup, mobile phones, on library computers, work computers, etc etc. Wouldn't have made any difference to the statistics out of 2000 respondents what is a representative number of non-broadband users - 10 ? 20 ?
Posted by otester over 6 years ago
Problem is in this country is people aren't willing to pay out of their own pocket, of course they want a free hand out.
Posted by seb (Favicon staff member) over 6 years ago
@cyberdoyle: If the fibre projects succeed, the government would earn more back in VAT :)
Posted by itworks over 6 years ago
It should be privately funded just like all other infrastructure in this country. It hasn't happened as fully as the Government would like because 1) BT has held the investment back because of their effective monopoly and 2) the Government and Civil Service didn't recognise this impediment believing BT was doing all it could - when clearly it wasn't. I invested and lost a considerable sum of money funding the cable network in the UK - later bought for pennies by Virgin but that doesn't stop me from seeing the benefits of private enterprise if given a freer hand.
Posted by antsnest over 6 years ago
"t should be privately funded just like all other infrastructure in this country. "

Please go and read your history books.

The National Grid was created by the CEB. Water supplies were created by towns/government. Gas supplied were created by local authorities until the NTS was created by British Gas after 1967. Etc etc

As far as I'm aware the only large scale infrastructure (defined for this purpose as serving the majority of the country rather than just the cities/towns) created by private enterprise were the railways (Canals possibly but they were only really used for commerce).
Posted by otester over 6 years ago
@antsnest

Just because the government did it, doesn't mean the private sector can't.
Posted by holly over 6 years ago
"Just because the government did it, doesn't mean the private sector can't"

Outside the cities the private sector is a bit dilatory to say the least! Without the public support we have had already we wouldn't have any service.
Posted by CARPETBURN over 6 years ago
@antsnest And do all the Gas, Electric and Water companies come sniffing around for new taxes to be imposed upon people by goverment each time they want to for example lay a new pipe?

People that are in favour of this tax are off their tiny little heads IMO. Just imagine a new 50p tax to supply gas to more people, a 50p tax for water to flow quicker from your tap, another 50p tax for the electricity to have more spark.
Posted by CARPETBURN over 6 years ago
Lets whack MANY 50p taxes on the public and give it to all business that want to improve but dont have the funds shall we? All those in favour of the 50p broadband tax which will fund business and make them more profitable thats fine i want to expand my business also, are you same people willing to fund me? NO i didnt think so.

All those in favour are all living for the fantasy of better broadband, rather than looking at the morals of the tax.
Posted by otester over 6 years ago
@holly

The problem is the current state of the world where we only really can choose between corporations, take as back a hundred years, private sector becomes viable again.

That's how the country should be like, loads of little businesses covering everyones needs.

Also if you live out in the middle of nowhere, you understand that you may not have access to such services.
Posted by Stuartli over 6 years ago
Far too many in this country believe that others, including government, should attend to their every need no matter what the financial expenditure required.

Using the Internet was not cheap initially, but strong competition has helped to bring communication prices down to far less in real terms today.

BT, for instance, could have given us free phone calls quite a few years ago and still made a profit, but preferred to enjoy its monopoly to the full for far too long.
Posted by donkey_hellfire over 6 years ago
@CARPETBURN "And do all the Gas, Electric and Water companies come sniffing around for new taxes to be imposed upon people by goverment each time they want to for example lay a new pipe?" No they just increase our bills to cover their infrastruture costs. The average increase in water prices for 2009-10 is 5.1%. This includes inflation of 3.0%. http://www.ofwat.gov.uk/regulating/reporting/custchgs2009-10/rpt_tar_2009-10headlines.
Posted by donkey_hellfire over 6 years ago
I wonder how much our electricity bills will increase to foot the national grid renovation as large sections of it are reaching its end of life. We the consumer / person end up paying for it one way or another. We just need to use the most efficient means of using the money.

@otester Many small fragmented companies would not have the customer numbers to utilise economies of scale cost reductions. For example some health care drugs in ths US cost 7 times what they cost in the UK. NHS vs many smaller health care companies.
Posted by mishminx over 6 years ago
Last time I checked the Government were not proposing a national fibre network nor are communications providers in danger of being nationalised. So comparison to other utilities would at best be disingenuous.

Instead they propose a digital welfare tax for a botched half assed job.
Posted by chrysalis over 6 years ago
Stuartli cheap yes, futureproof? no.
Posted by CARPETBURN over 6 years ago
quote"@CARPETBURN "And do all the Gas, Electric and Water companies come sniffing around for new taxes to be imposed upon people by goverment each time they want to for example lay a new pipe?" No they just increase our bills to cover their infrastruture costs. The average increase in water prices for 2009-10 is 5.1%. This includes inflation of 3.0%. http://www.ofwat.gov.uk/regulating/reporting/custchgs2009-10/rpt_tar_2009-10headlines."

And BT are charging more for fibre than they are for ADSL, so your point is what?
Posted by nmg196 over 6 years ago
@cyberdoyle Those without broadband COULD participate in the survey. There was no filtering or blocking. Dialup, mobile broadband and people using the Internet from work could all comment freely.
Posted by Raspyyeti over 6 years ago
Why not use the current tax on phone & broadband services to found a full all of UK fiber broadband network that is open for any retail service provider to offer TV, radio, phone & data services to all of the UK.
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