The European Commission (EC) has hinted that Digital Britain plans for a 50p per month tax on all telephone lines (here), which will help to foster the rollout of UK next generation broadband lines to 90% of the country by 2017, could still fall foul of competition rules.


So would it fall foul of EU state aid rules? Provided the UK government opens its Next Generation Fund up to fair access by all independent operators then no, probably not. However it's likely that operators would need to compete for a share of the pie, with governments typically being inclined to pick the cheapest solution.

That sort of scenario would still suggest that incumbent operators should see an understandably larger share, especially with BT's FTTC technology being relatively inexpensive to deploy. Then again, should more expensive but faster FTTH (100Mbps) services from operators such as i3 Group not be taken more seriously than slower FTTC deployments? Now that’s a difficult balancing act.

Elsewhere there are more than a few fibre optic broadband deployers who suggest that cutting the tax on new fibre lines would be a potentially better way of doing it than a 50p levy, yet the government frequently ignores this idea.