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Chancellor: Broadband upgrade 'essential' to economy

Broadband tax will pay for fibre roll-out

Super-fast broadband is essential to create thousands of new businesses and jobs in the UK, says Chancellor Alistair Darling.

During today's budget announcement, Darling revealed the government has "taken the decision to ensure the benefits [of super-fast broadband] were spread to rural as well as urban areas".

Darling then said a proposed 'broadband tax', which was first outlined in the Chancellor's Pre-Budget report in December, will "unlock private investment and enable 90 per cent of the country to access the next generation of super-fast broadband by 2017".

Under the 'broadband tax' Brits will be charged a £6-a-year levy on their telephone line. This tax will create the 'Next Generation Fund' that will pay for the roll-out of super-fast broadband across the UK.

However, Darling did elaborate on when the 'broadband tax' would come into force.

Darling's comments come just days after Prime Minister Gordon Brown revealed that the government hopes to ensure every Brit has access to super-fast broadband by 2020.

Sebastian Lahtinen, co-founder of thinkbroadband.com said super-fast broadband will change the way Brits use the web.

"It will help individuals interact with governments and businesses in a more efficient and personal way," he said.

According to Lahtinen, there has been a surge in the use of 'telepresence', a type of high-resolution video conferencing which "creates the feeling that you are physically in the same room".

"Being able to take part in a meeting from home will mean saving on travel costs, and more importantly allowing you to spend your time more effectively whether that means more time with the family or to complete other work," added Lahtinen.

"Many people are looking to start their own businesses, and by having access to high speed broadband, they can put off renting an office which can present a significant cost saving, and possibly even make the difference between profitability when times are tough."

According to Dominic Monkhouse, managing director of web hosting firm PEER 1, believe super-fast broadband will help encourage more Ecommerce in the UK.

"Ecommerce start-ups are typically one or two man bands working out of their living rooms and without a huge amount of capital behind them. It's not just the availability of high speed broadband that will launch these businesses but the cost - there's no point having the service available if it's too expensive to have any meaningful impact," he said.

"Superfast broadband absolutely has the potential to promote online start-up businesses which will in turn create jobs, so long as those who would benefit the most aren't priced out."

See also: Gov't group to oversee roll-out of 100Mbps broadband

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