Broadband tax backlash begins

 

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By Barry Collins

Posted on 22 Jun 2009 at 07:56

Executives from two of Britain's biggest telephone companies have spoken out against the planned £6-a-year "broadband tax".

The plans, announced last week in the Digital Britain report, will see a 50p-a-month levy applied to all landlines to help pay for a nationwide fibre broadband rollout.

However, the move has been attacked by two of the companies who will be forced to collect the levy from their customers.

"It is like a poll tax, a fixed figure for everyone," Charles Dunstone, chief executive of Carphone Warehouse, told The Sunday Times. "I don't really know if the Government can justify it to the electorate."

Dunstone's condemnation was echoed by BSkyB boss, Jeremy Darroch, who questioned whether it was the right time to press ahead with a stealth tax.

"There are hard-pressed people who see a phone-line as a necessity, but may have no interest in broadband," Darroch told the newspaper.

"When competition has done a good job of driving down prices, we don't want Government policy to force costs up again."

Last week the Internet Service Providers' Association (ISPA) issued a similar statement, claiming that "in effect customers and the ISP industry are being penalised for successfully bringing prices down."

Despite such high-profile criticism, reports suggest the Government is ready to impose the levy from next Spring. But whether the broadband tax would survive a potential change of Government next May is doubtful. The Conservatives have already voiced their opposition to the plans.

"The cable revolution happened without a cable tax, the satellite revolution happened without a satellite tax," said Shadow Culture secretary Jeremy Hunt, in the House of Commons last week.

"Everyone recognises that some public investment may be necessary to reach the more remote parts of the country, but simply slapping on an extra tax is an old economy solution to a new economy problem."