Government push to popularise Voice over IP with 50p tax
The Digital Britain report threw out a curve ball with the proposal for the 50p a month levy/tax on all metallic telephone lines. There has been some talk that the levy may not make it into law before the next General Election, but Stephen Timms speaking at a debate by the British Computer Society insists the government is committed to the levy and getting it into law before the next general election.
As with many taxes there are unforeseen consequences; the 50p per month may not be much, but people may vote with their feet and consider alternate methods of voice communication, e.g. mobile phones, or Voice over IP (VoIP). While those using ADSL will still get stung for the levy, some may, by moving second or third lines to utilise VoIP, save money per month, and the expected £175m a year revenue could be lower than expected. It is even possible that the mobile providers may exploit this charge in their marketing in areas where 3G coverage is good, or cable providers could see an increase in those opting for just a broadband service rather than a telephone/broadband bundle.
The levy will also affect those for who the telephone is a communications lifeline and have no desire to embrace the digital revolution. For the digital inclusion aspects of the Digital Britain report, it may make people more resistant to change. Of course, any levy or tax change in the run up to a general election will be exploited by the opposition, but we are at the real risk that the bits everyone agrees on within the Digital Britain proposals could be delayed.
With broadband speeds of 25Mbps and faster to some 50% of households being available from two or more providers by 2012, (which means that many millions paying the levy will see no immediate benefit and those who want to pay to get better broadband in their area having to wait until maybe 2017 to see the benefit) one really must question whether the proposed solution is the best that can be arrived at. The private sector, given the right incentives, e.g. removal of fibre tax, would most likely have reached or exceeded the current government plans.
A radical idea would be for the music/movie industries to embrace a fibre based broadband roll-out and help with investment seeing the new infrastructure as being a way to replace the existing distribution model of physical DVD/CD media and shipping the goods to shops around around the country. The content industry could then control the gateways offering the content and by ensuring that the price was right for options like streaming (the radio of the digital age) or buying to copy onto a portable music player, they might see sales increase, eroding some of the perceived losses due to piracy.