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UK Scraps Phone Tax to Fund Rural Broadband

Phillip Dampier June 24, 2010 Community Networks, Public Policy & Gov't, Rural Broadband, Video No Comments

The License Fee pays for the BBC's television, radio, and online operations, but now the British government wants a portion of it to be directed towards broadband as well.

Britain’s new coalition government announced Wednesday it was scrapping a proposed £6 a year phone tax to help expand rural broadband in the country.

“We need investment in our digital infrastructure,” said George Osborne, the Chancellor of the Exchequer. “But the previous government’s landline duty is an archaic way of achieving this, hitting 30 million households who happen to have a fixed telephone line. I am happy to be able to abolish this new duty before it is even introduced.”

“Instead, we will support private broadband investment, including to rural areas, in part with funding from the digital switchover under-spend within the TV licence fee.”

Osborne is referring to the average £11.63 monthly fee British citizens pay to help fund the operations of the BBC’s radio, television and online operations.  A surplus of up to up to £300 million is anticipated to remain after the UK completes its transition to digital television in the next two years.  That money would be diverted to expanding rural broadband under the government plan.

But campaigners for better rural broadband service complain that will not raise nearly enough to provide broadband across the countryside.  The 50p monthly telephone tax proposed by the former Labour government would have raised nearly £1 billion per year.

Charles Trotman, of the Country Land and Business Association, told The Telegraph it will not be enough money to connect all rural areas. He said remote communities risk being left behind in ‘broadband deserts’ unless more is done to help villages set up connections themselves.

Other critics contend the surplus from the digital TV transition may not exist two years from now.  Thus far, mostly rural regions in England have made the transition to digital, costing the government publicity campaign less than expected.

Rather than the tax, Osborne claims the government can spur investment from the private sector by “making regulatory changes to reduce the cost of roll-out.”  He did not specify what those changes might be.

The government claims it is committed to providing up to 2Mbps broadband service across the entire country, but the lack of action in many areas have forced small towns and villages to launch their own municipal broadband services, sometimes funded by residents themselves.

The BBC covers two British communities doing it themselves — providing enhanced broadband because private providers wouldn’t.  One in Highworth offers free Wi-Fi for up to two hours daily, while in Lyddington residents raised £37,000 to obtain enhanced DSL service.  (5 minutes)

Highworth (Swindon) relies on Signal, a high speed WISP/Wi-Fi network that offers up to 20/2 Mbps unlimited access with no Internet Overcharging schemes like usage caps or overage fees for £5.99 per month, or up to two hours daily access for free.  (4 minutes)

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  • Milan Gohil: Phillip, I trust that you will let us know what we can do to fight this assault on our freedom! Ajit PAID is a slimy POS! Trump is well on his way to...
  • Tammy Nelson: This is crap! Why are the customers always losing and they always win? I pay quite a bit for cable and internet. If you are cutting channels, at le...
  • Mike Colceri: THIS TOTALY SUCKS!!! I LOVE CHILLER , AND NOW YOU'VE GONE AND GOTTEN RID OF IT!!!!😠 BUT MY BILL STAYS THE SAME.....MINUS MY CHILLER!!! WHOEVER IS THE ...
  • BobInIllinois: Jo, FYI on this. YouTube wanted to get this streaming service up fast. The 5 big US cities that you listed all have network tv stations owned and ...
  • Dave Burstein: Phil Good work on this. Nearly no one has reported that the FCC is paying AT&T for an offering they would have anyway....
  • Jo: Chicago, Los Angeles, New York City, Philadelphia & San Francisco Bay Area This is it? it's just like google fiber.. a failure....
  • BobInIllinois: Wouldn't this be bad news for all those small, independent WISPs out there?...
  • Jp Eres: I finally filed a complaint with the Better Business Bureau (New York) as well as the FCC. Magically after months and months of rude customer service...
  • LG: Let me guess.. it comes with a 200Gb bandwidth cap too, right? This month, for the first time, I actually reached my 1 Tb limit with Comcast. It's m...
  • Kerry: This makes four channels that have been removed in the last 60 days. We are still paying the same ....
  • Kerry: Should the F. C. C. step in and stop what seems to be consumer fraud ....
  • Kerry: Very upset with N. B.C. For dropping the chiller channel . I subscribed to tier 1 so I could get all of the channels listed in tier one. It is the...

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