Clock Ticking On Super-fast Broadband Tax Consultation

The government has announced a consultation on how a £1 billion investment in super-fast broadband should be used to provide around 90 percent of the country with access to the networking technology, despite opposition plans to scrap the tax behind the fund if they win power at the next election.

The Next Generation Fund was originally announced as part of the Digital Britain Report published in June last year and builds on the government’s existing Universal Service Commitment to provide 2Mbps broadband to the entire country by 2012. The next step in the process is a consultation exercise on how the Next Generation Fund should be allocated, which will begin this week led by business secretary Lord Mandelson.

“This investment is about bringing the future of broadband to areas of the country that would otherwise miss out. We cannot underestimate the opportunities this will bring for homes and businesses, which is why we are taking action to make sure everyone benefits,” he said.

However, the validity of the consultation exercise may be undermined by comments made by the Conservative opposition last year that they would reverse plans to impose the 50p tax. Tory shadow culture secretary Jeremy Hunt said a Conservative government would look to scrap the proposed charge “as soon as possible”.

Although the business secretary is keen to be seen as championing the roll-out of broadband with this latest announcement, some critics have questioned his backing of plans to cut off suspected persistent file-shares from the Internet. The plan would not only hit the person in question but their entire household.

The UK government laid out its strategy to combat illegal file-sharing in the Digital Economy Bill during the Queen’s speech in November. The government plans to implement an escalating series of sanctions, starting with sending letters to illegal downloaders and culminating in slowing down the connection speed of offenders or temporarily suspending their connections.

According to Mandelson, the Next Generation Fund is designed to help support work already done by the private sector in rolling out high-speed Internet across the UK. “Already the market is delivering super-fast Internet speeds of 50Mbps to half the country but we cannot be certain that it will reach the communities that are not currently served, which is why we are putting in an extra £1 billion to support the market,” he said. “By upgrading our networks we will put the UK at the fore of rapidly developing technologies which will bring jobs, boost business potential and grow our digital economy.”

Despite facing the need to slash government spending to the tackle the budget deficit, the government says it plans to raise the money for the Next Generation Fund via a 50p tax on all fixed lines as previously announced in the Digital Britain White Paper last year.

The Next Generation Fund consultation will include various organisations in the telecommunications and Internet provider industry, the government said, which have 12 weeks in which to respond to the process.