Talk Talk boss slams broadband tax

 

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By Stewart Mitchell

Posted on 2 Nov 2009 at 10:10

The government's proposed “broadband tax” could push back high-speed broadband by years, according to TalkTalk chief executive Charles Dunstone.

The Final Third fund would impose a £6 per year tax on every UK landline to generate cash to roll-out fibre networks and bring next generation broadband within reach of 90% of the population, as laid out in this year's Digital Britain (pdf) report.

However, Dunstone believes the tax is “unjust” and rather than speeding fibre networks to rural areas could hinder progress by dissuading private companies from investing.

“The scheme is likely to delay next generation broadband roll-out in rural areas rather than hasten it as private investors will wait for public funds to be made available,” says Dunstone. “This will mean that much of the tax will be wasted investing in networks that the private sector would have built themselves anyway.

“I understand that this levy was devised at the last minute after the Treasury refused to make funds available, presumably because they thought it was a bad use of public money.

“We now need to let the private sector drive next generation broadband as far as it can. Public funding at this stage – in what appears to be an effort to ‘keep up with the Joneses in Korea, Singapore and the Netherlands – is simply going to waste customers’ money and slow down roll-out.”

TalkTalk has invested heavily in unbundling local exchanges and a spokesperson told PC Pro that “we have got our own next generation network”. Plans to invest public funds in rival network would undermine the value of those investments.

“”It will have an impact on those investments, but that's not the motivation for the criticism,” says TalkTalk’s director of strategy and regulation, Andrew Heaney, “It's a billion pound investment in what is effectively a luxury or premium service and there's been no public consultation.”

Dunstone goes on to suggest that 100,000 lower income homes could be forced to abandon broadband as a result of the tax, although provides no evidence for the assertion.