Analyst firm Point Topic has posted an interesting breakdown of how it expects the governments £0.50p +vat per month tax (Next Generation Fund) on all fixed phone lines (except low-income social telephony services) to work. The tax itself is designed to help finance the roll-out of future broadband services to 90% of Britain by 2017 (raising an estimated £175m per year).


Point Topic also correctly makes the point that simply building out new networks that advertise hundreds of Megabits per second (Mbps) won't be good enough, unless there is a Quality of Service (QoS) behind it to help keep a sustained and reliable transfer rate. They also claim that the 2017 timescale is un-ambitious and could be brought forward by two full years.


It should be noted that Point Topic is not taking sides; they are merely examining how the tax could be used. Elsewhere concerns continue to exist about the government’s intention to keep the tax going after its 2017 target is met (i.e. like road tax, which doesn't all get spent on roads).

There are also fears about the difficulty in gaining fair distribution of the money and the addition of VAT on top of the tax (tax on a tax, how nice). It’s often suggested that a wiser course of action would be to cut the fibre tax, thus making it more cost effective to deploy next generation fibre optic broadband services via the private sector.