A new report from UK think tank Policy Exchange has called into question the use
of a telecommunications tax to fund proposals for introducing high speed broadband
nationwide.
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.
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