TalkTalk UK Broadband ISP Interview - ISPreview
TalkTalk UK Broadband ISP Interview
By: Mark Jackson - December 21st, 2009 : Page 2 -of- 3
"we think it fundamentally unfair to introduce such a regressive [50p] tax that does not reflect ability to pay"

TalkTalk Logo 2. This year’s Digital Britain report approved a pledge to make broadband speeds of at least 2Mbps available to everybody in the UK by 2012, though there is still much debate surrounding what technology should be used to deliver it.

In all likelihood the outcome will probably be a mix of limited land-line broadband coverage improvements, Mobile Broadband, Satellite technology and or Fixed Wireless Access (Wi-Fi / WiMAX) infrastructure. What are your thoughts on each of the proposed technology solutions?

ANSWER: Digital Britain (Q's 2,3,5,)

When the Government's vision for a Digital Britain was presented this year we, like most people, agreed with Gordon Brown's statement that "Only a Digital Britain can secure the wonders of an information revolution that could transform every part of our lives." But we do have some views about the Government's suggestions on the best way to create a 'Digital Britain'.

The government thinks that the market will deliver NGA for about 60% of the UK and that the remainder will only to be reached by public intervention costing about £1bn. They have decided that the best way to raise this money is through a 50p per month tax on customers of fixed networks. We think this is a very ill-conceived scheme. First, the prospect of future government funds will discourage and actually slow private investment and NGA roll-out. Second, we don't think spending £1bn to upgrade the broadband speed for generally wealthier rural homes is a good use of public money.

Lastly, and probably most importantly, we think it fundamentally unfair to introduce such a regressive tax that does not reflect ability to pay. The tax will also discourage around 100,000 mostly low income households from taking up broadband, thus actually widening the digital divide. At some in the future it may be appropriate for public intervention - but certainly not today and certainly not through such a regressive tax.

We do support using public funds to help meet the goal of getting all homes to the minimum level of 2Mbps. Unlike NGA, 2Mbps is required to use basic / essential services so it is appropriate to use public funds to achieve this.

We agree that there are many 'self help' steps that can be cost effectively taken - including speed tune ups and improving home wiring - before there is any need for network upgrades. It's estimated that there will be 2 million homes that will need an upgraded network and this could be delivered by a combination of technologies such as Fibre (FTTC), mobile or satellite. It is important for competition that whatever solution is selected is available wholesale.

We're pleased that Government acknowledges the important role that digital technologies play in developing a competitive, socially cohesive, vibrant and successful Britain. As the report points out, more than 70% of people describe broadband at home as essential or important. We are committed to playing our part in helping create a Digital Britain, but will continue to fight for the rights of our customers.

3. Do you think the above solutions for bringing 2Mbps to the rest of the UK are the best ones or should the Digital Britain report have proposed something different (i.e. what would you do)?

ANSWER: See above (Q2).

4. The final Digital Britain report also attempted to spur interest in future next generation access (e.g. Fibre Optic broadband) solutions, although the only real meat appeared to come in the form of a controversial 50p per month tax on all fixed phone lines (Next Generation Fund). Do you think this tax is a good idea and will it be enough to push related next generation broadband services into 90% of UK homes and businesses by the government’s 2017 target?

ANSWER: This is an unjust and regressive tax on all phone customers which will subsidise mostly richer rural households that can afford high priced super fast broadband services.

As well as being unfair we estimate that the increase in price will mean that over 100,000 mostly low income homes will be forced to give up their broadband lines. This is wholly inconsistent with the Government's plans to tackle digital exclusion by increasing uptake and use of broadband.

Crucially the scheme is likely to delay next generation broadband roll-out in rural areas rather than hasten it as private investors will wait for public funds to be made available. This will mean that much of the tax will be wasted investing in networks that the private sector would have built themselves anyway.

We understand that this levy was devised at the last minute after the Treasury refused to make funds available, presumably because they thought it was a bad use of public money.

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