The Conservative Party has pledged to push 100Mbps superfast broadband connections out to a "majority" of the UK population by 2017. The move almost mirrors Labours current government policy, which aims to make next generation broadband services available to 90% of homes by 2017.

However the Tories have gone one step further by specifically stating "100Mbps" and, instead of imposing a new 50p per month tax on all fixed phone lines to fund the project, they'd use part of the BBC's annual license fee.


Osborne's reference to a "BBC licence" fee obviously refers to the Colour TV Licence (£142.50 per year), which a vast majority of us all pay and primarily helps to fund the BBC. Roughly 3.5% of that is currently assigned for use as part of the Digital Switchover.

It appears as though this cash would only be used to fund a rollout into rural areas, with the private sector doing the rest (i.e. mainly urban towns and cities). The Conservative Party has also recently plugged the idea of reducing the Fibre Tax to assist in that process, which is something we favour.

Suffice to say that using the BBC's TV licence fee would raise a similar amount of money but without the need to impose a new tax; though the licence fee itself has been known to rise. However this is election time and as usual there are plenty of policy pledges being floated around without much meat on them.

It’s also interesting to explore the idea of breaking up British Telecom, which has already happened. To be fair Ofcom didn’t do a terrible job of that (though it was not perfect) and we don’t perceive BT’s complete breakup as being a miracle cure; it’s a very complicated market and any such idea would require considerable consultation (BT is a commercial business after all).