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Small UK Businesses Fear Damage from Governments 50p Broadband Tax

Posted: 24th Feb, 2010 By: MarkJ
fibre optic cableUK Government plans to put a 50p +vat per month tax on all fixed phone lines, which would help to fund the rollout of next generation broadband services to 90% of the country by 2017, could "severely effect" small and medium-sized businesses (SMEs) according to Outsourcery.

Outsourcery, a provider of cloud computing solutions and mobile-centric unified communications, believes that the levy could in fact have the opposite effect from its intention and might lead to SMEs finding their ambitions severely hampered by an inability to access high-speed, low contention network services.

Mark Seemann, Product Strategy and Development Director at Outsourcery, said:

"Access to broadband is becoming vital for the growth and survival of over four million SMEs in the UK and it is critical that the government invests in broadband infrastructure if Britain is to compete effectively in the global economy.

Broadband is rapidly achieving utility status and all types of communications eg phone systems, Unified Communications and cloud computing are becoming increasingly reliant on an already under capacity system.”

It all sounds a bit contradictory until you realise that Outsourcery is actually attacking the limited ambition of the plan. They claim all it does is tinker with the speed rather than solve the underlying issue that the UK is "building its broadband network on archaic technology".

Outsourcery warns that the nation's copper infrastructure desperately needs to be upgraded to 100Mbps - 1Gbps fibre optic in order to satisfy businesses' requirements both now and in future.
With copper wires (i.e. FTTC technology), speeds will not push much past 50Mbps even with the latest broadband technology. But in reality the average sustainable speed is far lower (12-15Mbps).

With SMEs making up 97% of the British economy, they will play a critical part of the recovery and a lack of adequate broadband could indeed cause problems. The group believes that a faster network would permit the most advanced business applications, such as HD Video conferencing and streaming complex software over the internet.

Curiously the group claims that one solution to the problem would be for the government to impose more regulation and put hefty fines on network providers who have frequent outages. They also believe that the government should force those ISPs to compensate small businesses whose livelihoods have suffered due to their services being offline.

Mind you any competent business should be choosing a broadband provider with a strong SLA and that invests enough into its capacity to avoid similar pitfalls. There are plenty around, though all must still obey the laws of market supply and demand.
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