Fibre tax likely to be opposed in the UK

1 Mar 2010

The majority of people living in the UK do not support the Labour Government’s plan to introduce a 50pc + VAT tax on all fixed lines to fund the rollout of super fast, next generation broadband.

According to UK magazine ISPreview, the latest survey results reveal that 74.3pc of British people do not support the Labour Government’s plan to introduce a 50p +vat per month tax (‘Next Generation Fund’) on all fixed phone lines under its Digital Britain strategy.

Revenue from the NGF (estimated to be £175m per year) would be used to support the rollout of next generation broadband services to 90pc of the country by 2017, with a focus on less profitable areas, such as rural locations.

Respondents to the survey were also asked which alternative solution they would prefer, which turned up some interesting results.

The Conservative party plan to use part of the BBC’s existing TV Licence fee (the 3.5pc ‘Digital Switchover’ budget) gained the greatest single vote of support from 31.7pc of respondents.

The idea of cutting the controversial ‘Fibre Tax’, which taxes the rateable value of the basic next generation infrastructure, gained the next most significant portion of support with 24.2pc.

Funding the rollout of next generation broadband services purely through private sector investment came in third with 23.7pc.

Meanwhile support for the 50p phone line tax itself was incredibly weak and gained just 11.7pc of the vote. Respondents were split between the main choices, although the 50p tax was clearly the least popular by a significant margin.

“What comes out clearest is how the majority of respondents agree that next generation broadband will need some sort of support and cannot merely be left to the private sector, which would result in many rural areas being left without access to superfast broadband,” commented’s editor Mark Jackson.

Concerns have also been raised about consumer demand for superfast next generation services, such as Virgin Media’s 50Mbps cable product and BT Wholesale’s new fibre optic based FTTC (40Mbps) and FTTP/H (100Mbps) technologies.

However, when asked whether a truly superfast connection would benefit them, 61.3pc of respondents gave a resounding ‘Yes’ and 18.3pc were unsure, the rest (20.3pc) said ‘No’.

“The most important point to remember about future broadband is not the headline (advertised) speed but its underlying infrastructure improvements,” Jackson continued.

“Today most of the country is still served by dated and slow copper cables, which is why average UK speeds are often closer to 4Mbps (Ofcom’s April 2009 data) than the dizzy heights of ‘up to’ 20-24Mbps as advertised by ISPs using existing technologies (e.g. ADSL2+),” concluded Jackson.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years