Digital Britain: £6 tax on all fixed phone lines to fund broadband gap

A tax will be imposed on fixed telephone lines to help fund the rollout of broadband to rural areas.

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A tax will be imposed on fixed telephone lines to help fund the rollout of broadband to rural areas.

This will cost every household with a landline phone 50 pence per month, equivalent to £6 a year.

Ben Bradshaw, secretary of state for culture, media and sport, told parliament that the government still had a target for every home in the UK to have broadband by 2012, as he announced Lord Carter's Digital Britain report.

"We have concluded the fairest way is to use some of that saving ... in an independent national fund to ensure full coverage," he said.

But shadow culture secretary Jeremy Hunt immediately hit back, questioning the benefits of this tax, and why responsibility for funding the rollout to some areas would effectively be taken off the shoulders of telecoms providers.

The fund would only raise £150 million per year, he added. "At this rate, it will take 20 years to complete the £3 billion rollout", he said, calling the report a "colossal disappointment".

BT and Virgin Media this morning indicated they are unlikely to be able to afford to provide broadband infrastructure to homes in the countryside, and were not expecting to receive much government help, according to a report in The Times.

BT told the newspaper it could not afford to connect remote rural homes to the service without financial support. “We believe that the future is fibre, but it is only economically sensible for us to connect up the big cities and new-build houses; we’re not expecting Digital Britain to help us to run fibre into rural areas.”

A source at Virgin Media added that the company expected the report “to offer us not much more than some tax breaks”.

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