Coalition Eyes BBC Licence Fee For Broadband

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The Tory / Lib Dem government plans to top-slice the BBC licence fee to pay for faster broadband

Plans to use part of the BBC licence fee to build a nation-wide bradband network, outlined in the coalition government deal struck between the Tories and the Lib Dems, have been broadly welcomed by the IT industry.

The idea to ‘top-slice’ the licence was first put forward by the Conservatives in its election manifesto, in response to the previous government’s plans to impose a 50 pence a month “broadband tax” to cover the cost of rolling out superfast broadband across the UK.

The Liberal Democrats had indicated support for Labour’s levy plans. But the legislation was dropped in the rush before Parliament was dissolved before the general election in April.

At the time, Internet service providers (ISPs) and other quarters of the communications industry were wary of the Labour plans.

A realistic solution?

But the Tory plans came under equal scrutiny, not least by The Communication Workers Union, whose deputy general secretary stated: “Most people, particularly those in hard to reach rural areas will see this [broadband levy] as a modest cost for an essential service. The market simply will not deliver broadband everywhere, and if the Tories want to sound plausible they need to find a realistic solution to this problem.”

And a report published by broadband researchers in March suggested it was the Labour levy, and not the Tory BBC top-slice, that would bring greater benefits to rural communities, where the Tory vote was stronger.

Nevertheless, the coalition has adopted the Tory manifesto pledge, but is more scant on detail. It said it would “ensure the rapid roll out of superfast broadband across the country”.

Newly appointed broadband minister, Ed Vaizey will now oversee discussions with the BBC, as part of his responsibility for implementing the Digital Economy Act out of the business, innovation and skills department. But it is understood that he will report to the Culture Secretary.

Lax on detail

Mark Jackson, ISPreview.co.uk‘s editor and founder said the news was “a firm step in the right direction”.

However, like many commentators, he remained “deeply concerned that no action has been outlined for tackling the Valuation Office Agency’s (VOA) tax on lit fibre lines (i.e. Fibre Tax), which is often highlighted as one of the most costly deterrents to laying fibre optic broadband cables around the country”.

“The final coalition agreement is also decidedly lax on detail and fails to make any mention of its time-scale or service performance targets, without which the goal posts could easily be shifted. Next Generation Access (NGA) services are absolutely vital to the continued growth of this country’s economy and we call upon the new government to deliver a proper outline of its plans as soon as humanly possible,” he added.

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