Feeds

Broadband tax of £6 per year to fund rural fibre rollout

Town and country

Internet Security Threat Report 2014

Digital Britain The government plans to impose a 50 pence monthly levy on every phone and broadband line to fund the rollout of fibre to rural areas, it was announced today.

The measure, which will mean city dwellers subsidise faster broadband in sparsely populated areas where the economic case for commercial investment is weak, will come in next year. It is likely to be seen as one of the most controversial proposals of Lord Carter's final Digital Britain report, published this afternoon.

The levy will be collected by all phone and broadband providers and paid into a Next Generation Fund, run by Ofcom. The government estimates providers will pay between £150m and £175m in total every year.

A Network Design and Procurement Group, whose membership wasn't revealed, will consider applications for subsidy from networking companies wanting to install fibre in a rural areas.

"The benefits we believe will be enormous," Carter said. "Across the country, rather than just in the cities."

The government plans to impose the levy because BT and other network infrastructure providers indicated the market for next generation services in rural areas - between 30 and 40 per cent of the country - will not be large enough to justify the cost. Carter plans to use the Next Generation Fund to connect the "Final Third" by 2017.

BT has committed to roll out fibre to street side cabinets covering about 40 per cent of its national network by 2012. The £1.5bn investment, which will offer downstream speeds of up to 40Mbit/s, is aimed mostly at dense urban and suburban populations. The new technology will be available to competitors on a wholesale basis.

Separately, it is deploying fibre into premises, offering 100Mbit/s downstream, on new build sites where the civil engineering costs are low.

Virgin Media's network meanwhile covers about 50 per cent of the country, again in urban and suburban areas. It has almost completed an upgrade to 50Mbit/s downstream and is in early testing of a 200Mbit/s service.

Carter said subsidising deployments to the "Final Third" was essential to avoid a digital divide on access to faster broadband. Asked if he believed it would be a popular measure, he said: "We'll have to wait and see."

The former Ofcom boss said strong competition in the ADSL market had driven broadband prices down and that he expected the impact of the levy to be "competed away".

Carter also confirmed the previously announced 2Mbit/s universal broadband service obligation. It will be funded by a combination of the public purse and underspend diverted from the TV digital switchover. Private investment in better mobile coverage is also expected to contribute. The Network Design and Procurement Group will also be responsible for ensuring delivery of universal broadband. ®

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
Same old iPad? NO. The new 'soft SIMs' are BIG NEWS
AppleSIM 'ware to allow quick switch of carriers
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Brits: Google, can you scrape 60k pages from web, pleeease
Hey, c'mon Choc Factory, it's our 'right to be forgotten'
Of COURSE Stephen Elop's to blame for Nokia woes, says author
'Google did have some unique propositions for Nokia'
It's even GRIMMER up North after MEGA SKY BROADBAND OUTAGE
By 'eck! Eccles cake production thrown into jeopardy
Mobile coverage on trains really is pants
You thought it was just *insert your provider here*, but now we have numbers
Don't mess with Texas ('cos it's getting Google Fiber and you're not)
A bit late, but company says 1Gbps Austin network almost ready to compete with AT&T
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.