Labour to push for broadband tax before election
Tory row ahead
The Labour government has reaffirmed its commitment to a 50p per month tax on every landline, and vowed to push through the necessary legislation before the general election in May.
Plans for the levy, to subsidise rollout of fibre-based broadband services in rural regions, were revealed in the final Digital Britain report in June.
But after the announcement there was little sign of Whitehall moving to implement the new tax, and speculation grew that it would be dropped. In August the new Digital Britain minister Stephen Timms added to doubts when he declined to commit to action before the election.
Yesterday however, he confirmed legislation would be brought forward before next May. "[It] will be in the Finance Bill which I'm also responsible for at the Treasury, and my aim is that we should legislate for that this side of the general election," he told a British Computer Society audience.
The revived plans could set up a political clash ahead of the election. Normally the last Finance Bill of a parliament contains only uncontroversial measures, but the Tories have already publicly opposed a broadband tax.
The government estimates the levy will raise between £150m and £175m per year. It wants communications providers to act as tax collectors by adding 50p to every bill and then passing it to a central fund. Most of the industry is expected to resist such a levy.
BT is committed to connecting 40 percent of the country to faster broadband by 2012. It is installing fibre as far as street side cabinets, which will offer theoretical downstream speeds of up to 40Mbit/s.
The £1.5bn investment is targeted at densely populated urban areas, prompting fears of a new digital divide. The tax and subsidy fund are Labour's policy response.
Separately today, BT announced it expects to double the reach of its ongoing ADSL2+ exchange upgrade programme, which offers downstream speeds of up to 24Mbit/s over existing copper infrastructure. It said 75 per cent of premises will be covered by 2011. The programme is years behind schedule. ®
why don't they just...
...up the rate of VAT on telecom connections - from the current 15% to 20% - the collection infrastructure is already there, as is the payment structure, so whilst it is still gently bending over the electorate and inserting a broadband connection where there is no sun, at least it would be doing it honestly, and with less disruption.
Although this is a pointless tax, and will be wasted and fail to achieve it's stated ambition, this is what Government is for - to raise finance to achieve societal goals which are not commercially viable.
It's just a shame that in recent years Governments have forgotten that, and decided to try and control every aspect of our lives.
Oh, and @No, I will not fix your computer; it makes sense for Governments to nationalise natural monopolies (water, gas, sewage, the rail network (not necessarily the trains on them), the road network. Other services which can be subject to competition are better left in private hands - provided there is genuine competition that will usually deliver a better and cheaper service to the user. Telecom physical infrstructure is not necessarily a natural monopoly, but it is only with the advent of wireless that genuine competition has entered the market for the whole package - this is because the physical infrastructure was paid for by public subsidy (other than Virgin, which was paid for by very stupid and optimistic investors - probably the same ones who paid for the channel tunnel). What should have happened as soon as the technology caught up was a nationally owned company owning the lines, and doing the maintenance, and private companies providing the calls.
However that would be a pragmatic solution, rather than one which suits any particular ideological slant, so no chance.
Just be spent on moats and chandeliers
that's what they do with the tax money. And then to top it all off they will claim they have a legal right to net communications, it is just plain corrupt.
The only question is how much longer are people going to put up with it?
A BETter Way
BT don't have to own the fruits of this broadband tax and indeed where any public money is spent on our 4th utility the result should be owned in the community interest.
- have a look here http://www.fibrestream.co.uk/blog for equity and ownership models already in place.