By Natasha Lomas, 23 September 2009 17:32
NEWS
The proposed fibre tax to pay for next-gen broadband in the UK could be law before the next general election.
Stephen Timms, Minister for Digital Britain and financial secretary to the Treasury, said the government is committed to making its £6 per year tax on landlines law to pay for rolling out next-gen broadband in the UK.
The fibre levy was included in the government's Digital Britain report, unveiled in June by then Comms Minister Lord Stephen Carter. However, soon after unveiling the final report, Carter stepped down from the government - leading to speculation the tax may be dropped. Limited time left to push a law through parliament before the next general election has also cast doubt on its survival.
Speaking at a British Computer Society (BCS) panel debate this morning, Timms said: "The levy on telephone lines - 50p a monthÂ… will be in the finance bill which I'm also responsible for at the Treasury and my aim is that we should legislate for that this side of the general election."
Timms added that while some next-gen broadband services are already available in the UK - such as Virgin Media's cable broadband service, which offers speeds up to 50Mbps where available - it is important the government ensures services are "nationally available".
"We don't want parts of the country that are left behind," he said. "And I think that is going to require action on the part of government."
Asked how he could be sure the plans set out in the Digital Britain report would survive looming government spending cuts, Timms said: "The spending that we do will need to be very tightly targeted to make a difference in areas like this where we know future jobs [will come]."
Comments
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1. anonymous
Absolute madness. The piffling amount of money generated will probably cost that amont for BT, Virgin or Kingston to administer in their billing systems.
Hell, why don't we just make it a round £10 and we can pay for something else needed like a general election.
I personally favour a haggis tax on Scotland, to pay for it's wider penetration to the rest of the UK, where the market is poorly served - you can't buy any decent south of Gretna Green !!
2. Richard Davies
What if you don't have or want broadband?
What if you get it via satellite or cable?
What if you use a mobile dongle and already pay a tariff to someone else?
Why have BT and the like, we wouldn't be in this rut if they had of constantly pumped investment back into the infrastructure in the first place?
Who will benefit in the long term...the ISP's and their shareholders...they then, should pay, not the UK public via tax!
We already pay a line rental? Will this tax replace it?...after all, BT are only talking about FTTC which means that there infrastructure will be fibre but your connection will still be coming down your existing copper phone line. I might not mind paying a tax if we get FTTP.
What will £175 million acheive when BT stated it would cost billions to provide FTTP.
Most people already get 2Mb or more.
When ADSL was launched...BT said it cost around £250,000 per exchange to upgrade. They upgraded at no cost to the public if a certain percentage of the area agreed to sign up to broadband (trigger levels). BT therefore saw that they would get the money back via peoples broadband packages.
Any areas not broadband enabled should be done at the telecomm provider / ISP's cost, not ours.
What ever happened to WiMAX which was intended for the areas that Broadband couldn't reach?
If we pump our money into the infrastructure will we get a share of the profits as BT plan to charge ISP's £225 per user per year?
All these un-answered questions, yet the government are proposing it anyway...typical!
3. Jeremy Wickins
This is very strange. Either £175million a year is enough to finance this roll-out, in which case someone seems to have been lying about the costs (BT, I'm looking at you), or it isn't, in which case there is no point doing it. There is no middle ground here.
Also, BT is a private company - no longer part of the state apparatus. The government has no business involving itself in something that it has no control over (despite what it thinks and has been doing for years).
This is pointless crap, and only adds to my belief that Labour is determined to keep pushing through lousy legislation until they cannot win the next election (because the winner of the next election will be unelectable for the next twenty years because of the mess it has to try to sort out).
4. anonymous
And how long will this tax stay at 50p? How long before some other idiot with his own agenda uses it to generate more cash for their own pet project, and bumps the tax higher.
Why are we paying for something the ISP's will profit from?
Typical goverment idiots have no idea about the real world and don't care what the people really want.
5. karen challinor
sheer bloody minded, pig headed stupidity and point blank refusal to listen to the public
it would be far more sensible for the government to drop the tax on optical fibre set by the Valuations Office Agency, that would be a greater incentive to all telco's to lay fibre rather than a one shoe fits all tax that goes to BT once the government overhead has been taken off (at a wild guess something like 49p per line)
but of course getting rid of a tax is far less attractive to ministers than creating new ones, getting rid of old taxes is an admission that they were counterproductive
and of course the new tax will be a resounding success as most people on broadband already receive 2Mb/s
and those that don't, well they'll be reclassified as an ultrafast dial up line
but of course! I wasn't thinking! the new tax is a red herring, they will be trying to get the draconian measures for dealing with what they consider to be naughty people on the net, into law before the election, lets wait for the bill to appear so we can read it, I'll be very surprised if the internet disconnection and broadband throttling measures aren't tucked into some otherwise innocuous paragraph shortly after the 50p tax is headlined
remember the coroners and justice bill ? this is going to be more of the same
they think they are smart and we are stupid, they deserve to be in authority and we deserve to do what we are told
so write to your MP and tell them in no uncertain terms what you think of the digital britain report and the idea of a new tax being introduced just before an election, I can guarantee they will listen if they think they might be out of a job afterwards, it's probably the only time they will listen though
6. anonymous
It will be interesting to see how this law is worded and whether it will differentiate between fixed data and voice lines and how it treats ADSL lines were the two are combined but the voice side may never used and how it will handle ISDN30 that handle multiple connections over a single line.
It will also be interesting to see how many people walk away from fixed lines as a result of the tax, thus reducing the amount collected.
At the moment we use Virgin for a combined telephone/TV/cable package, but we never use the phone only our mobiles or Skype, when the the last PC died it was replaced with a laptop, so it would be quite easy to go totally moble with voice and data, and switch to satellite for our TV, this severing all fixed connections to our home. I am already being taxed to prop up the banks due to their miss poor buesiness strategies, I see no reason why I should be taxed to support ISPs and Telecoms companies due to their poor business strategies
7. Lionel A Smith
Clearly the lessons of the window tax have been forgotten by those in government.
I just don't see this one flying it is too stupid for any sane person to consider.
I know politicians can be out of touch but this reaches new depths of crassness.
8. Richard Davies
For the sake of an example, if you assume that there are around 13.7 million Broadband subscribers in the UK and they all signed up to this new service which BT has stated will get £225 per year per customer...
THEY WILL GET £3.08 BILLION POUNDS PER YEAR.
We won't see any of that unless we're a shareholder and it should more than pay for any infrastructure upgrade within a couple of years...SO WHY DO THEY NEED A TAX?
9. Ron Livesey
Simplistic at best, complex in implication.
10. Nick Cole
So we are being taxed through BT accounts, to enable the Government to give BT a proportion of that tax to allow them to invest in equipment.
That is all the Government seem able to do nowadays, merely find ways of taking more of our money for their own pet schemes resulting in ever decreasing public benefit.
11. Radical Meldrew
I guess BT will pay this tax centrally to government. What is to stop that money being diverted for other uses - like other taxes that we pay?
Road tax has to be the classic example - £46 billion is collected and they spend £2.7 on road maintenance!
12. anonymous
Richard Davies wrote..
For the sake of an example, if you assume that there are around 13.7 million Broadband subscribers in the UK and they all signed up to this new service which BT has stated will get £225 per year per customer...
THEY WILL GET £3.08 BILLION POUNDS PER YEAR.
==
I think you are overlooking the facts that Fibre To The Premesis (FTTP), of which this £225 service charge relates to, has a capital costs for the approx. 75% of the population that is is remotely feasible to rech, of > £25bn last I heard.
FTTP is being *trialed* in Ebbsfleet development green field site with brand new infrastructure from everyone - BT, Water, Electricity, Transco Gas etc...Fibre to your farm premesis 5 miles up a track just isn't going to happen is it.
The silicon.com article being being discused with the Phone Tax, is Fibre To The Cabinet (FTTC at a cost to BT of £1.5bn) that BT are rolling to pilot now in several area's that will cover an estimated 40% of the population, without no apparent £225 service charge(to ISP) you are offended by....
You hear much whinging, but don't see much stepping forward to take up the challenge from Virgin, Sky, Talk Talk, O2 etc here....If delivering Fibre (note Virgin, we mean fibre, not cable as the last few hundred metres) to the house. To the majority of the ountry, Virgin is just not an option.
Also, WIMAX is still a pipedream. In pilot in Milton Keynes, abd expensive to boot with no real hills to interfere with the signal. WIMAX in Scotland/Wales - hmm....you kinda don;t get 3G there today, WIMAX is a no hoper......
Short term, for the rural NOT SPOT people, the *only option* is probably BT's recent announcement of the (previous business only) BITS enabling technology which should raise the game for broadband from 3-5km from the exchange to up to 12km - Giving to 2Mbps, but seriously most not spot people will be dizzy with happiness as better than 56k dial up they current have to live with !!
BITS seems a worthy candidate for some of this cash, as no-one else is offering *any* solution other than DIY Communal WiFi coverage in some remote villages - See Peter Cochrane's blog.
Just a shame the phone line tax is being levied, as this should really be government/centrally funded as is otherwise borderline 'not commercially viable'.
People compare the UK badly with Korea and other 'recent new infrastructure' countries where it is relatively easy to provide this. You want to try America where things are pretty grim for lots of rural rural folks - no broadband, and as seen often on TV 'No Signal' on your US Cellphone.
Why on earth do people expect Telecoms for net to nothing. In copmparison to the NHS, Schools, Local Council Services, Police etc you get pretty good coverage, service and value for money.
Infrastructure costs big money, there is no way to do this on the cheap. Central funding is required, not a ridiculous phone line tax. In a recession, this is an ideal opportunity to provide a boost to employment, and the long term futue of UK PLC.
13. David Bradley
Is this a tax on a PHSYICAL telephone line [i.e. a copper pair to the home/office] or a telephone number [perhaps in the range 01/02/03]? There is a huge difference between the two which could add up to a significant monthly fee.
Think about it for a moment with ISDN2e, DDI, VoIP, Fax to email, private circuits, 0800, 0845 etc etc.
14. Nick
@Richard Davies
What if you don't have or want broadband?
=====
What if you don't want schools as you've no kids, or NHS as you have private medical care, or public transport systems as you have a car? i don't *want* any of these things but you can be sure a huge amount of my tax goes towards paying for them ;-)
15. karen challinor
Nick, everyone gets taxed for those things not just those with phone lines
if the internet tax were applied to everyone not just those with phone lines then it would at least be fairer
I am still of the opinion that its a red herring though
16. karen challinor
David Bradley - yes it is a tax on a fixed land line, including those from cable companies like Virgin who offer a telephone line as part of the deal
I'm not sure if you get charged for each line you have so if you have a phone line and a separate fax line you get charged £1 per month instead of 50p though
17. anonymous
Poorly thought out strategy, placing a tax on landlines will push the demand for mobiles and voip services, putting more pressure on broadband infrustructure.
Any resonable person can see that if you make it more expensive to have a landline, then people will remove the need via VOIP phones.
This will then also mean that the tax collected will be affected.
So we will be left with the monies needed for the better broadband infrustructure not be collected, more bottlenecks on the current infrustucture and telephone companies who provide the landline services further impacted and dis-enchanted with providing such a loss leading service in the first place.
On the whole a government stragtegy thoughout by a monkey. With no real understanding of technology, the economony, lagtime on taxes, opprtunity cost etc.
It will provide the conservatives with a great platform to get rid of labour and will quickly entrench the conservatives in power for at least a generation without any real hardwork on their part.
All they have to do is reversing the tax, delaying the broadband work and running their own digital britan review.
Business will not be happy but they will still be better off.
18. GALLEYSLAVE
As BT own all the copper wire (land lines) in the country, this dumb tax will speed BT'S demise, as we all find another way to connect to the web or make calls.
19. IT technician
Collecting this tax seems fairly straight forward. The big question is 'How will it be spent?'. I just can't see how it will work. BT and TalkTalk etc are not charities. How will the government give them assets? Who will own them? a huge bureaucracy will be required to administer it.
20. anonymous
can,t the conservatives repeal the law.? A certain vote winner.
21. Winston Smith II
Once again it is, alas just another example of Labour ‘control freakery’.
I can see three main points against it:
1. Many of the very elderly housebound use the telephone system as almost their only method of staying in touch with family & friends living at a distance. They have missed out on the introduction of computers & have no wish to either own or use one so why should they be penalised by an additional tax for services that they will never benefit from?
In addition, many of these people are already in the ‘eat today or heat today?’ money bracket and another 50p will be the straw that breaks the camel’s back.
2. Broadband services are owned and managed by commercial companies. Why should our taxes be used to fund them?
I understand they all need a govt licence to carry out their business – surely it is not beyond the simpletons in whatever govt dept controls this to make a condition of licensing that they (the commercial companies) should implement fast broadband countrywide? No fast broadband = no licence
Yes, this will eat into their profits initially but in the long term they will benefit from an increased customer base. Also, more than one company could use a line so they could all work together on introducing the communications links which would make it cheaper for each individual company
3. Finally, would this tax money ever actually be used for improving broadband or would it merely slide into govt. coffers to fund more ‘bin control outreach officers’ – or whatever other money wasting scheme is flavour of the month at Labour HQ?
22. anonymous
This is one good way of killing the internet, and the technology advancement of this country - so much for freedom of speach. I think the government might find that as more and more items are taxed, the internet and phones will be the last thing on peoples list of need things, and a reduction of BB will be seen, not in vast ammounts, but enough to make a nice dent in the internet access in this country, and put the economic growth back by 5 years. All we need, a goverment that wants to prolong the recession.