Tax could dealy Digital Britain, warns Dunstone

Tax could dealy Digital Britain, warns Dunstone

The Government's broadband tax could delay the roll out of faster broadband across the UK and force low income households to give up their internet connection, Talk Talk chief Charles Dunstone warned this week.

The 50p a month levy, which will be added to domestic phone bills to help fund the cost of developing the network for faster broadband, was mooted in the Digital Britain report in June.

Dunstone warned that the tax will interfere with market forces, resulting in private investors waiting for public funds to be raised to fund the roll out rather than forging ahead with their own funds.

He said: ‘Crucially 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. This will mean that much of the tax will be wasted investing in networks that the private sector would have built themselves anyway.’

Dunstone argued: ‘When broadband first started people said the networks would only reach 60 per cent of the population.The private sector, unaided, actually got to 99 per cent coverage, far further than in most other countries.’

‘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.’

Dunstone also warned the 50p a month tax will force around 100,000 low income households to give up their internet connections.

Dunstone told the Daily Telegraph: ‘This is an unjust and regressive tax on all phone customers which will subsidise mostly richer rural households that can afford high priced super-fast broadband services.”

He added: ‘As well as being unfair we estimate that the increase in price will mean that over 100,000 mostly low income homes will be forced to give up their broadband lines. This is wholly inconsistent with the Government’s plans to tackle digital exclusion by increasing uptake and use of broadband'

Andrew Heaney, TalkTalk's director of strategy and regulation, gave evidence to a committee at the Department for Business, Innovation and Skills today. He told the Committee Talk Talk fears the Government has 'dodged' proper public debate about the broadband levy. He argued that public funds should be spent on delivering essential basic services.

TalkTalk said that the broadband levy was an 'unfair tax' that would prove counterproductive, and that the Government should instead focus on enabling private sector investment and encouraging effective competition.

Written by Mobile Today
Mobile Today

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