British Phone Tax to Fund Broadband

The government has announced plans for a 50p per month levy on all fixed copper lines to fund the expansion of fibre broadband to areas where the market fears to tread.

The proposals come as part of the government's Digital Britain report – its blueprint for ensuring the UK does not become the laggard of the global digital economy.

Speaking at the launch of the final Digital Britain report in London today, Communications Minister Lord Carter said it is very likely the market will deliver next-generation broadband for between 50 and 65 per cent of the population of its own accord.

The "final third", however, is likely to be ignored by the market without additional help from the public sector – and a copper tax is Carter's answer.

"We recommend a very simple price of 50p per fixed copper line levy on everyone which we will use as a means of subsidising market build out of fibre networks to the remainder of the population," said Carter.

Carter estimates the levy will raise between £150m and £175m – a sum he said will provide "enough investment" to make the economics of taking fibre to the last third of the population "attractive".

Pointing out that it amounts to £6 per year for every household, he said: "We have not made that decision lightly but [the levy] is a forensic way of answering the [next-generation broadband] question."

"The benefits to the economy will be enormous," he added.

Key among these benefits envisaged by Digital Britain is the ability to shift public service delivery onto a digital footing. By 2012 the report anticipates there will be "a significant increase in digital participation" triggering public services to be switched to primarily electronic and online delivery.

Back in January the interim Digital Britain report included a plan for a universal service obligation for up to 2Mbps broadband, with the aim of ensuring there are no more digital 'notspots'.

The final report concretes this proposal.

"We are not saying that [up to] 2Mbps is the height of our ambition," said Carter but rather a "technological minimum wage".

"It's the level of connectivity that's required for people to access the sort of services that we want," he added.

A combination of government investment, commercial tender and extension or change to existing mobile licences will be used to deliver universal service, according to Carter, who said that many of the homes currently without broadband will be connected using technology with "next-generation capability".

"We are not specifying a ceiling, we are specifying a floor," he noted.

To enable the UK's mobile networks to play a bigger part in building universal broadband, Carter flagged up the report's plans for "a programme of spectrum liberalisation, auction packaging, auction release timetable, licence change, licence liberalisation", adding: "All of which we believe will do in mobile networks what we're saying we will achieve in fixed networks."

The report names dot-com entrepreneur Martha Lane Fox as a Digital Inclusion Champion to evangelise the skills and benefits of digital participation with the aim of encouraging broadband refuseniks – those who can technically get broadband but choose not to – to take up fat pipes.

It also sets out Carter's final thoughts on safeguarding intellectual copyright in an age of illegal file-sharing – with telecoms regulator Ofcom set to be given "an explicit duty" of significantly reducing piracy. In additional, it recommends ISPs should be armed with "a suite of technical measures" to combat repeat P2P offenders – such as bandwidth throttling.

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