Chancellor Confirmed Landline Duty (aka. Broadband Tax)
Chancellor Alistair Darling has confirmed the government will introduce the Landline duty to the Finance Bill.
The “broadband tax” will cost households with a landline connection 50p per month, with the revenue generated being spent on bringing rural areas up to date with their broadband services.
The government will be investing £200m in the rollout of broadband under the Digital Britain programme as part of the government’s Universal Service Commitment. Darling said, “We are modernizing the UK’s digital infrastructure so we can provide the next generation of superfast broadband to 90 per cent of the population by the end of 2017.”
A consultation on the practical aspects of the new Landline Duty is to be launched shortly and this will be followed by a consultation on the procurement approach to investing in Next Generation Access.
Julie Owens at moneysupermarket.com thinks the move is good and said that while a levy was “a little unfair” to those who have a landline but no broadband, 50p is a small price to pay for vital infrastructure to the UK.
Everyone deserves access to broadband. BT and Virgin Media have begun upgrading their networks but the government and Ofcom must ensure the rollout of a super-fast network reaches the places that need it most.
Still, the broadband tax has angered many in the industry.
Chief executive of TalkTalk, Charles Dunstone, the second largest consumer broadband provider in the UK, said the tax is “unjust and regressive”, claiming it will serve only to subsidise richer users who can afford superfast broadband.
The solution was also criticized by BT, with BT strategy and portfolio group director, Liv Garfiel, stating that a 50p per month tax on phone landlines would not provide enough funds to cover the entire UK with fibre-optic broadband.
Conservatives said they would do away with the tax if they were to win the general election.