The Times claims broadband levy scope widened
It is impossible to know precisely what is happening with the broadband levy or even, as it is being called by Ministers now, the Broadband Tax. The oddity in the naming is that its proper name should be a 'a telephone line tax to fund a better broadband network.' If it was a pure broadband tax it would be levied against just broadband services.
The Times leads with a headline of 'Broadband levy may be trebled for homes with multiple lines'. Hardly headline grabbing stuff as we believed from the time the Digital Britain report was released that the tax was to be levied on a per telephone line basis, rather than a per household basis. Therefore those with 2 lines will pay £1 a month, and those with half a dozen, £3 a month. The data suggesting 1.7 million homes have 3 or more lines seems a little unusual as one of the big advantages of ADSL is that you do not need a dedicated telephone line for it so home owners still retaining a second or third line for Internet access are already wasting monthly line rental of around £10 to £12 a month (unless they have multiple broadband lines). The most likely answer is that these dedicated lines are actually rented by and paid for by businesses for home workers where a firm wants to give employees broadband, but wants them to only use it for business purposes.
On the issue of Virgin Media telephone lines, some reporters and even the odd Minister or two thought these were immune as they were fibre optic based, however, they have always been intended to be included in the levy. The wording in the Digital Britain report was such that it covered all metallic telephone lines, and while Virgin Media makes great use of fibre-optic in its advertising, the reality is that the telephone line to the home is supplied over a twisted pair copper cable running alongside the metal co-ax cable, and thus will be subject to the tax. Those Virgin Media customers who will not have to pay the tax are those taking a broadband and/or TV package but not a telephone line service.
What needs clarifying rapidly by the people responsible for the Finance Bill is the latest leak from the Treasury reported by The Times, that VAT will be levied on top of the tax, thus increasing the cost by some 17.5% (assuming VAT returns to this level when the tax starts). We know that low income groups will have various exemptions applied, which is welcome, but at a time when the government is spending a few million to encourage Internet participation, many of these people will be annoyed to find their bills going up to pay for something that at this time they have no interest in.