The Labour Governments controversial proposal to put a 50p +vat per month tax (Next Generation Fund) on all fixed phone lines to help fund the rollout of next generation broadband services to 90% of the country by 2017 has been shelved at the last minute. The tax itself was widely disliked and had received stiff opposition from almost all quarters, though without it the government has effectively erased its crucial Next Generation Access (NGA) plans.

The tax was part of the government's Finance Bill, which will now face a general delay until 18th May; crucially, after the general election. It's still possible that a victorious Labour party might reintroduce it, though Conservative opposition, even in a hung parliament situation, is likely to mean that the 50p tax is now well and truly consigned to the dustbin.

In the meantime there will be an inevitable climate of uncertainty, though such weather is not to be unexpected around a general election year. Meanwhile the Conservative party recently pledged to use 3.5% of the BBC's existing TV Licence fee (Digital Switchover Budget, estimated to be worth £130m per year) to deliver "100Mbps broadband across most of the population" by 2017, instead of imposing the 50p tax.

However this would only be utilised in 2012 if moves to encourage private investment, such as forcing BT to open its underground cable ducts and possibly lowering or cutting the Fibre Tax, prove ineffective. The Conservatives also support Labours USC, which aims to bring speeds of at least 2Mbps to everybody in the country by 2012. See THIS NEWS for full details on what all of the main parties have proposed.