Conservative Government Would Scrap Broadband Tax

Two of key proposals of the Digital Britain report will be scrapped if the Tories win power in the next election, the party has revealed while confusion surrounds whether the government will set broadbroad access in law or merely make it a commitment.

In an interview this week with the Financial Times, Tory shadow culture secretary Jeremy Hunt said that a Conservative government would reverse plans to impose a 50p tax on all telephone lines which was to have netted around £175m towards rolling out high-speed broadband to the much of the UK. Hunt also added that the Conservatives would review the BBC’s royal charter and plans to make it share revenue with other broadcasters.

Hunt told the FT that the Tories would look to scrap the proposed charge “as soon as possible”.

The government announced a plan to provide universal 2Mbps broadband earlier this year, in response to the Digital Britain report. The government also announced plans to use a 50p-a-month levy to pay for faster broadband, but has recently been criticised for concentrating on coverage rather than broadband quality, as research suggests that broadband quality is crucial for a country to take a leadership role in the digital economy.

Commenting on the Tory plans to scrap the tax, David Frost, director general of the British Chambers of Commerce said that high-speeed Internet was vital to the fututre competitiveness of the UK economy and questioned how it would be paid for if not through the 50p tax.

Confusion also emerged last week around whether the government plans to make 2Mbps broadband access a legal obligation or simply a future target with no repecusions if it fails to achieve its goal. According to BBC reports, Digital Britain minister Stephen Timms told MPs last week that the government’s promise of broadband to all homes by 2012 was “an obligation”. But the Department for Business Innovation and Skills later backtracked on Timms’ comments claiming they were a “slip of the tongue”.

Earlier this month, the author of the Digital Britain report Lord Carter, said the government’s plan to provide a universal 2Mbps broadband service may be slower than users would like, but it’s essential for social inclusion. “Universal 2Mbps broadband is the technological equivalent of the minimum wage,” said Lord Carter, in response to a question from eWEEK Europe. “You have to have a base level – but we also have to have an answer to the quality question.”

The government has said it will introduce the broadband tax to fund its broadband roll-out before the next election. Speaking at an event organised by the The BCS Chartered Institute for IT in September, Minister for Digital Britain Stephen Timms said that the 50p a month tax will be introduced as part of a Finance Bill before Christmas. “We want to make high speed networks nationally available. The next-generation fund will help that and we will legislate for it this side of a general election,” Timms said, according to BBC reports.

But while the UK government merely included a 2Mbps connection for all its citizens as a goal in the recent Digital Britain report, authorities in Finland have gone further by making 1Mbps broadband a legal right for all its citizens.

According to local media reports, the Finnish government has set a deadline of next July to enforce the right to a 1mbps connection for all its 5 million citizens. The government has set a more ambitious target of mandating a 100Mbps connection by 2015 but the latest announcement is seen as stepping stone towards that aim.