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November 2, 2009

Broadband tax will force 100,000 homes off internet

TalkTalk opposes 50p-per-month levy

Oliver Garnham

The UK's proposed 50p broadband tax will force 100,000 low income households to give up their broadband lines, according to TalkTalk CEO Charles Dunstone.

The tax is expected to start in 2010 and last for seven years, raising about £1 billion. It's designed to help fund the roll-out of superfast broadband access, but Dunstone says the increased availability of high-speed internet will come at a cost.

Broadband TalkTalk "This is an unjust and regressive tax on all phone customers which will subsidise mostly richer rural households that can afford high priced super fast broadband services," said Dunstone.

"We estimate that the increase in price will mean that over 100,000 mostly low income homes will be forced to give up their broadband lines. This is wholly inconsistent with the government's plans to tackle digital exclusion by increasing uptake and use of broadband," he added.

TalkTalk's director of strategy and regulation, Andrew Heaney, is due to give evidence to a Business, Innovation & Skills (BIS) Committee later today to outline the company's concerns.

Hearney is expected to express concerns to the BIS Committee that the government has avoided proper public debate on the issue by including the levy in the Finance Bill which traditionally is not consulted on.

£6 broadband tax to go ahead before next election

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TalkTalk believes that investment in the UK's broadband infrastructure should be focused on delivering essential basic internet access, rather than developing premium services that favour the private sector.

"Crucially the scheme is likely to delay next generation broadband roll-out in rural areas rather than hasten it as private investors will wait for public funds to be made available. This will mean that much of the tax will be wasted investing in networks that the private sector would have built themselves anyway," said Dunstone.

"When broadband first started people said the networks would only reach 60 per cent of the population. The private sector, unaided, actually got to 99 percent coverage, far further than in most other countries. We now need to let the private sector drive next generation broadband as far as it can. Public funding at this stage - in what appears to be an effort to ‘keep up with the Joneses in Korea, Singapore and the Netherlands - is simply going to waste customers' money and slow down roll-out."

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Comments

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Comments received

Roy King said on Monday, 02 November 2009

What a load of crap from Charles Dunstone, does he not realize that with low income homes the majority do not give up things like fags, booze, mobile phones & broadband never mind how poor they are.

Screwed Britain said on Monday, 02 November 2009

Yet another TAX from the corrupt cartel we call our government.

Laurie said on Monday, 02 November 2009

What a load of crap from 'Roy King' who has no way of substantiating his comment.

Laurie said on Monday, 02 November 2009

What a load of crap from 'Roy King' who has no way of substantiating his comment.

John said on Monday, 02 November 2009

Yes I agree totally with roy King. The low income homes are better off than most people, with their heads in the sand, think. Charles Dunstone doesn't live in the real world.

Squeptick said on Monday, 02 November 2009

Having spent many years in social work I have a degree of sympathy with what Roy King is saying. Lower income households do seem to end up with more disposable income and they often choose to spend it in the ways he suggests. Having said that, it is also clear that there is genuine hardship in this so-called developed country and the gap between the 'haves' and the 'have-nots' continues to widen even under a labour government.
Personally, I wince whan I see ever-faster broadband speeds trumpetted in the media. In my part of rural Dorset we have just achieved a sort-of broadband which trundles along at a pedestrian 500k on a good day.

Carl Barron said on Monday, 02 November 2009

Excessive taxes in the UK are killing off businesses due to this government’s proven total lack of ability to handle the money it gets from revenues.

Reduce all Taxes and promote growth, if you do not, the results will hit like a whirlwind of further finical devastation and job losses.

Excessive taxation is crippling the UK’s ability to recover as it is.

Signed Carl Barron Chairman of agpcuk

tricky said on Monday, 02 November 2009

As phone providers are private companies let them raise the money from shareholders, not taxation.

wilsenda said on Monday, 02 November 2009

What is all the fuss about? We are talking about 50 pence, not 50 pounds, per month, right? Does Talk Talk really believe that 100,000 households - which already pay for broadband - can't afford a measly 50p per month to help progress? Of course they don't! Look for the political agenda, boys & girls, and you'll see what they really think.

Leo Hopkins said on Monday, 02 November 2009

I can pretty much guarantee that the tax on broadband is yet another way for the government to make money. The government's purse thrives of peoples addiction. Their addiction to cigarettes; - the tax on this is enormous! The tax on alcohol - the tax is enormous! - The tax on fuel (again another addiction/dependancy) - The tax on this is enormous.

Now everyone is twittering and facebook-ing etc, etc we have become pretty much dependant on it, and like the social worker rightfully points out poorer families will still carry on paying for it, regardless.

This tax will last 7 years? - Yeah right, its likely to stay with us and increase but then the government really NEEDS the money you see - how else would they be able to afford to pay for second homes and dry cleaning bills topping £700 a time? Hmmm?

Andy G said on Monday, 02 November 2009

Disgusting Tax imposed by a bunch of misguided do gooders

really? said on Monday, 02 November 2009

50p a month. = £6 a year.
i'm sure most low income households will be able to pay that if they can pay for a computer.
i don't think 100,000 people will give up their broadband lines just for that.

D@ve said on Tuesday, 03 November 2009

Although I don't agree with the tax, I think the claim that '50p a month will force 100,000 homes to give up broadband' is ridiculous, to say the least!

Leo Hopkins said on Tuesday, 03 November 2009

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