Darling confirms telephone line tax
Townies to pay for rural broadband
Yesterday's budget confirmed Labour's intention to tax every phone line in the UK to the tune of 50 pence a month, providing funds for connecting the disconnected by 2017.
The tax was widely expected, and was part of the Digital Britain proposals, but yesterday's speech confirmed that it will come in once Labour gets past the minor detail of winning the next election. The plan is to connect 90 per cent of the country by 2017, but rural operators will need to find money for fibre if they're going to avoid being underminded by BT's ubiquitious copper.
For a long time Wireless Internet Service Providers (WISPs) were seen as the ideal way to connect rural communities - keeping infrastructure costs low and only relying on cables for aggregated backhaul. The problem is that once the company has got around the line-of-sight issues and licensed some frequency it's also proved there's a market. So BT comes along and upgrades the local telephone exchange so it can steal away most of the customers with cheaper ADSL.
The WISP goes out of business, customers too far from the exchange still don't have any broadband and BT makes money for its shareholders - which is, after all, what it should be doing.
All this was laid out for us last year by Malcolm Corbett of the Community Broadband Network, who explained that for rural broadband to work companies have to lay fibre optic to the home. That way BT can't come along and undercut the prices - it could lay more fibre, but that would be a huge investment which would only result in a comparable service, so BT is unlikely to bother.
Of course, laying fibre is much more expensive than setting up a WISP, which is where all those 50 pence pieces come in - unless the Conservatives win the next election in which case they'll be raiding the BBC's licence fee for the money.
Corbett, now of the Independent Networks Co-operative Association, reckons the money will help networks avoid the trap of providing a sub-standard service which can be easily superseded by BT - essential if every bothy and cow shed is going to be connected to "superfast broadband" as envisioned by Digital Britain. ®
It'll be like the "road fund" licence. Add 50p onto every phone bill, spend 5p of it on the network and the other 45p goes staight into the pot to pay for more useless self-justifying civil service wankers.
Broadband is not a right, it's a choice. Like good beer. If you want it, pay for it and/or move somewhere where decent quality is available. By all means use central taxation to ensure that each local library is equipped with a decent connection, as a public service, but this "digital divide crap" is just, well, crap. What next, extra tax on petrol so everyone can have a bike?
(and before you start, I'm 4km from an exchange, only get 2Mbit/s, and am 1 hour's walk from the nearest bar. I chose to live here, and I don't expect anyone else to pay for a network upgrade for me).
If you think this is to pay for rural broadband, you're nuts.
1. It is a fundamental principal of British taxation, that everything goes into one pot. If Road Fund Tax funded roads, they'd be paved with gold.
2. History shows that taxes are usually introduced as "special measures" to fix a specific problem. The rate is then hiked each year, while the problem is forgotten. If I remember my history (never my best subject) Income Tax was introduced at 6 (old) pence in the pound for only the very wealthy, to fund World War 1. The rest is history.
should anyone be expected to pay to compensate BT for their failure to serve customers?
If taxpayers fund national telecom infrastructure projects, that infrastructure is public property. I don't see a big problem with the state investing in the county's infrastructure, but if so, BT (and other competitor telcos) can buy or rent that infrastructure from the state.
On the other hand, I do see an enormous problem with a shameless tax funded bailout to rescue a failing private sector telco and its failing CEO.
The Broadband Stakeholder Group (reported in The Telecom and Times) estimated that it would cost £1.5Bn to bring fibre close to just 40% of homes in the UK by 2012. And £5Bn to provide fibre to *all* UK street cabinets. Or £29Bn to connect *all* UK homes with fibre.
So, back of the fag packet calc... 50p month per landline would take around a decade to bring fibre close to 40% of homes. fifty years to bring fibre broadband to all street cabinets, and two and a half centuries to provide fiber to every home.
The numbers really don't add up.