The i3 Group ( H2O Networks, Fibrecity ), which repeatedly called on the previous Labour government to scrap plans for a 50p broadband tax on all fixed phone lines, has questioned whether the newly announced coalition between the Conservative and Liberal Democrat party will be able to do a better job of funding next generation broadband deployment around the UK.

The fibre optic infrastructure specialist suggests that the coalition would be best served by "[sticking] to the Conservatives pre-election plans". This proposed to scrap Labour's 50p +vat phone line tax (£175m per year) and instead use part of the BBC's TV Licence fee (3.5% 'Digital Switchover' budget - £130m per year) to help fund a superfast broadband rollout. However the BBC money would not be used until 2012 at the earliest.

The Conservatives also pledged to push BT and other infrastructure providers into opening their cable ducts and to review the controversial Fibre Tax. The Conservative approach is targeted to give private investment a chance to work first. They promised to deliver "100Mbps broadband across most of the population" by 2017, though "most" is not very specific.


The Conservatives new coalition partners, the Liberal Democrats, preferred Labour's somewhat unpopular solution of imposing a 50p tax on all fixed phone lines. However their speed target was set at just 40Mbps, while other details remained broadly in-line with Labours policy to have 90% of the country within reach of Next Generation Access (NGA) networks by 2017.

i3 Group's boss remains concerned that, even if the Conservative approach is followed, it will still not be bold enough to tackle the toughest issue of rural broadband coverage. Elfed Thomas fears that waiting until 2012 before deciding whether to use the BBC money is simply "unrealistic".


i3's Fibrecity project recently resulted in the launch of a 100Mbps Fibre Optic ( FTTH ) broadband network in Bournemouth city on the south coast of England (here), a feat they hope to repeat in Dundee next. Any reduction in the Fibre Tax would of course help an operator like i3, as could enticing BT to open their underground fibre ducts. However some ISPs fear that the price BT would charge for accessing such ducts might ultimately out-way any benefit.