The think tank has questioned the fairness of introducing high speed internet to 90% of the nation, when the only tax measures introduced to fund the GBP3.5bn project is on the telecommunications sector. The think tank notes that the introduction of fast broadband nationwide will provide a major benefit to all sectors of the UK economy, including the public sector, and should therefore be funded out of general taxation.

Under the current proposals, announced by Treasury Minister Stephen Timms in mid-2009, the tax will likely equate to an annual charge of GBP6 on each home with a phone line, regardless of whether the line is operational, raising around GBP150m-GBP175m annually.

The think tank has questioned whether the Digital Britain proposals are the best use of taxpayers’ money. It has instead advocated that the government consider the creation of community broadband hubs to provide very high speed broadband to remote areas in the medium-term, and defer nationwide roll-out until the longer term, when there is a greater need for higher bandwidth.

“The promotion of high speed internet access outside major conurbations should, in the first instance, be through the use of public libraries, community centers, post offices and other public buildings as high speed access hubs. This would replace the promotion or funding of direct connectivity to up to 8 million homes as suggested by Digital Britain. The cost of this initiative would be likely to be less than GBP300m rather than the GBP3.5bn associated with going from 60% to 90% 50Mbit/sec household accessibility,” the report states.

The report is a response to the consultation launched by the government on December 11, 2009 to allow observers and experts to comment ahead of the tax's introduction, scheduled for October 1, 2010. The consultation period closes on February 12, 2010.