Britain to tax fixed lines 6 pounds a year for broadband: expect more mobile-only households

Posted on June 19, 2009  /  0 Comments

To many people’s surprise, the UK has decided to tax every fixed line 6 pounds a year to build “next generation broadband” throughout the country.

But Virgin’s network is limited and fibre-optic cables are expensive. The two firms can profitably reach only around two-thirds of the population, reckons Matt Yardley of Analysys Mason, a consultancy that helped to prepare the report. Connecting the rest at high speed will cost around £3 billion. So Lord Carter surprised the broadband industry by proposing a £6 annual tax on telephone lines, raising around £150m. That will be used to bring “next generation broadband” (a term left undefined, but probably an expansion of the BT scheme) by 2017 to the third of the country the private sector will struggle to reach.

We sincerely hope this money will be spent as soon as its collected and will not add to the billions of universal service funds rotting in government accounts the world over. We also predict that there will be more mobile-only households as a result. Trust the British to go against the current. Everyone else beats up on mobile and shields fixed; they do the opposite.

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