Mobile users should share broadband tax, says BT

BT has called for the government’s proposed £6-a-year broadband tax to be extended to mobile phone users in a move that could reduce the size of the tax. In his Digital Britain report last month, the communications minister, Lord Carter, proposed a 50p-a-month levy on every fixed-line phone to meet the bill for getting the next generation of super-fast broadband networks to 90% of UK households by 2017.

But it is not only fixed-line companies that would be able to bid for some of the estimated £1.5bn that would be raised by the tax. Mobile phone operators would also be able to use the money. As a result, BT’s director of industry policy and regulation, Emma Gilthorpe, said yesterday that if mobile, wireless-based operators did go through that bid process then “the government should consider the opportunity to widen the base for the tax and possibly reduce the amount that each individual household pays”.

BT reckons it is incongruous that the levy only applies to fixed-line phones even though mobile phone companies and other businesses that want to use wireless solutions can bid for the cash for next-generation networks.

Carter proposed the new broadband tax because there is little chance of the market being able to make an economic case for pushing fibre-optic networks and other super-fast broadband services beyond about 60% of the population. With the Treasury unwilling to make any money available from general taxation, the telephone levy aims to plug the funding gap.

BT has already announced plans to invest £1.5bn over the next three years on a super-fast network but it will only reach four of every 10 homes. Virgin Media, meanwhile, is already offering broadband at 50Mb a second – the sort of speed expected from next-generation networks – but it covers only about half of the country.

Gilthorpe’s comments, at a Westminster Media Forum debate on Digital Britain, came as BT announced that it is speeding up the rollout of its next-generation network.

Having originally planned to have about half a million homes connected by next March, it yesterday said it would have 1.5m homes connected by next summer. By the end of this summer Virgin Media will have completed its next-generation network plan, putting its 50Mb a second service within reach of 12.5m homes.

But there are fears within the industry that Carter’s broadband tax could fail as it would require a new finance bill, which is unlikely to appear before next March. By then the government will be focused on a forthcoming general election and a new tax on consumers is unlikely to be a vote-winner.

Sourced from Guardian Newspaper [Link]

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