Conservatives plan to reverse 50p broadband tax
The Digital Britain Report introduced a 50 pence per month levy (the so called 'broadband tax') on copper phone lines, which would be used to fund the rollout of next generation broadband to the areas where market forces were not expected to deliver on their own.
In an interview with the Financial Times this morning, Jeremy Hunt, shadow culture secretary said that if the Conservatives win the general election, they would reverse the Digital Britain Bill and are considering changes to how the BBC is structured. This would mean scrapping the proposed 50p per month levy on phone lines which is expected to raise £175m to fund next generation broadband in mostly rural areas.
The Conservatives told us that they are looking at plans for a market led approach:
"We believe that it is important to first create an environment where the market is encouraged to invest and see where this takes us before looking at a broadband tax for areas in which the market won't invest.
While we recognise that there may need to be some public investment in the future to ensure 100 per cent coverage, we believe it is putting the cart before the horse to do this before you have seen how much the market will provide."Conservative Spokesman
The Shadow minister also suggested in a BBC interview that the Conservatives would also look at any regulatory changes that might be needed to encourage this investment.
Thinkbroadband has always argued that the government should be doing everything possible to incentivise companies to invest in broadband technology, including fibre optic cabling. At present, fibre is subject to non-domestic rates (similar to council tax for businesses), which adds to the cost of connecting up Britain to a super fast network. This statement by the opposition may indicate a positive change, although no doubt it will be of concern to rural residents who are unclear on what they should expect in the next 5-7 years. It is important to note that the above does not affect the Universal Service Commitment of 2Mbps which is expected to be available across the country in 2012.