Digital Britain doesn't come cheap as Government rolls out 'broadband tax'

17 June 2009 / by Rachael Stiles
Under the Government's plans for funding a new age of Digital Britain, every residential and commercial property in the UK with a home phone line will have to pay a 'broadband tax' of 50 pence per month.

Communications minister Lord Carter, author of the Digital Britain report published today, intends to raise up to £1.5billion to cover the cost of the next generation of broadband internet.

The money will be made available to internet service providers, Lord Carter said, that want to move forward with new internet technologies, enabling 90 per cent of consumers to download music and films in seconds by 2017.

Lord Carter also said in his report that he plans to divert money from the television licence fee to fund a Digital Britain, raising £200million to get existing broadband connections of 2Mb into every home in the UK by 2012.

According to communications regulator Ofcom, about 15 per cent of Brits are currently living in 'notspots' – mostly in rural areas – where they are not able to receive access to broadband internet facilities.

But the BBC Trust chairman, Sir Michael Lyons, has reacted defensively to Lord Carter's plans, which would see licence payers' money used to fund broadband.

"The licence fee must not become a slush fund to be dipped into at will," Sir Michael said, "leading to spiralling demands on licence fee payers to help fund the political or commercial concerns of the day. This would lead to the licence fee being seen as another form of general taxation."

Lord Carter also has designs on the surplus of money leftover from the digital switchover fund, estimated to be around £250million, to implement his broadband crusade.

Industry experts have reacted with mixed feelings towards Lord Carter's Digital Britain report.

"A 2Mb commitment is a pretty underwhelming aspiration given the rest of Europe already experiences over 6Mb as an average," says Michael Phillips, product director of "If this is a headline speed then experience would indicate that many recipients will actually get only a fraction of this, as headline speeds presently fluctuate dependent on levels of usage and how far users are from junction points.", on the other hand, believes that the plans laid out in the report will imprive broadband services in the UK, in terms of availability, cost and speed.

While accepting that the report has flaws, Jason Glynn, communications expert at uSwitch, said: "However you look at it this report is good news for Britain."

"Major investment in our broadband infrastructure is well overdue and we expect the upgrade to revolutionise broadband access for millions across the UK."

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