UK ISPs Respond to 2010 Budget and 50p Phone Line Broadband Tax
Posted: 25th Mar, 2010 By: MarkJ
Broadband providers, such as Entanet UK, TalkTalk and the i3 Group (H2O Networks, Fibrecity), have poured scorn over yesterdays Budget and its plans to help fund the rollout of next generation fibre optic based broadband services by putting a new 50p +vat per month tax on all fixed phone lines in the country.TalkTalk's Andrew Heaney said:
"We think this tax is an unfair, regressive and wasteful way of funding superfast broadband which would deliver less benefit than it will cost, slow superfast broadband roll-out and drive around 200,000 homes off broadband.
If this or any future Government does think that spending public money on providing universal superfast broadband is a good use of people’s hard-earned money and it is found that the market can’t meet that need then it should be funded, like any other national infrastructure project, out of general taxation, not by taxing the less well-off who use landline phones to subsidise the relatively wealthy who want high speed access to the internet."
"We think this tax is an unfair, regressive and wasteful way of funding superfast broadband which would deliver less benefit than it will cost, slow superfast broadband roll-out and drive around 200,000 homes off broadband.
If this or any future Government does think that spending public money on providing universal superfast broadband is a good use of people’s hard-earned money and it is found that the market can’t meet that need then it should be funded, like any other national infrastructure project, out of general taxation, not by taxing the less well-off who use landline phones to subsidise the relatively wealthy who want high speed access to the internet."
TalkTalk's comments will come as little surprise to anybody who keeps tabs on the market, they have a history of being outspoken and firmly against the idea of a new tax. Similarly the i3 Group , which recently began offering its own 100Mbps Fibre-to-the-Home ( FTTH ) service in the UK city of Bournemouth (here), fears that the tax could hinder rather than help the market.
Elfed Thomas, CEO of i3 Group, said:
"The i3 Group is disappointed with the Chancellor’s policy for superfast broadband, announced in yesterday’s Budget Statement. ... In my opinion, this is an irresponsible use of tax payers money, as it is the areas that are most ‘deprived’ of communications infrastructure - such as homes in rural areas - that need to be subsidised, not towns and cities.
Fibre optic cable is not expensive, but putting it in the ground is, and the proposed broadband tax does not appear to be adequate to address the rural broadband issues we face in this country. The broadband tax may actually disincentivise UK companies like ours, while other countries around the world are embracing next generation access and governments are supporting next generation broadband projects.
It is likely that the levy will create an uncompetitive market for next generation services and will result in the consumer losing out."
"The i3 Group is disappointed with the Chancellor’s policy for superfast broadband, announced in yesterday’s Budget Statement. ... In my opinion, this is an irresponsible use of tax payers money, as it is the areas that are most ‘deprived’ of communications infrastructure - such as homes in rural areas - that need to be subsidised, not towns and cities.
Fibre optic cable is not expensive, but putting it in the ground is, and the proposed broadband tax does not appear to be adequate to address the rural broadband issues we face in this country. The broadband tax may actually disincentivise UK companies like ours, while other countries around the world are embracing next generation access and governments are supporting next generation broadband projects.
It is likely that the levy will create an uncompetitive market for next generation services and will result in the consumer losing out."
Elsewhere Entanet UK welcomed the discussion about improving broadband users’ experience but remains starkly critical of all the pledges and proposals being put forward. They warn of "real [dangers]" with setting "unrealistic expectations for UK voters".
Darren Farnden, Head of Marketing at Entanet, said:
"Neither Labour nor the Conservatives has explained in their manifesto pledges exactly how they will use this money to ensure that the required infrastructure will be rolled out to all corners of the land. Taxing fixed line telephone users is discriminatory and requires a fair and workable system of collection. Likewise, beating up BT isn’t going to work when the company’s obligations are only to provide telephone services, not broadband, and it has its own shareholders’ demands to address."
"Neither Labour nor the Conservatives has explained in their manifesto pledges exactly how they will use this money to ensure that the required infrastructure will be rolled out to all corners of the land. Taxing fixed line telephone users is discriminatory and requires a fair and workable system of collection. Likewise, beating up BT isn’t going to work when the company’s obligations are only to provide telephone services, not broadband, and it has its own shareholders’ demands to address."
Separately the CMA (part of BCS), a membership organisation for ICT professionals, believes that current proposals for a landline tax would provide a return on investment only for a limited number of very specific projects.
David Harrington, Head of Regulatory Affairs at CMA, says:
"There is a distinct poverty of thought and action that is serving businesses badly in the UK - presently just scraping into the top 30 countries in the Broadband Quality Score (BQS).
We are calling on any post-election Government to create a clear investment framework and process to stimulate the economic platform (not only the network) to grow internet based businesses ahead of global competition.
Any form of tax on the access network does not serve the aims of Digital Britain, in our belief. However, if there is to be a tax, it should be across all forms of access - including mobile networks - otherwise competition will be distorted."
"There is a distinct poverty of thought and action that is serving businesses badly in the UK - presently just scraping into the top 30 countries in the Broadband Quality Score (BQS).
We are calling on any post-election Government to create a clear investment framework and process to stimulate the economic platform (not only the network) to grow internet based businesses ahead of global competition.
Any form of tax on the access network does not serve the aims of Digital Britain, in our belief. However, if there is to be a tax, it should be across all forms of access - including mobile networks - otherwise competition will be distorted."
For a different perspective entirely, PlusNet has reported that it saw approximately double the amount of BBC iPlayer traffic during the Budget than a normal weekday afternoon, which is nice.
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