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MPs criticise Government's proposed broadband levy

LONDON - A group of MPs has rejected the Government's proposal for a monthly 50p levy on fixed telephone lines claiming it is a "regressive tax" and unfair on the poor.

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A report published by the Business, Innovation and Skills Committee hits back at the Government's proposals that were drawn up as part of the Digital Britain bill last July.

The Committee considers the Government's proposal of an extra 50p charge imposed on every fixed phone line, with the estimated revenue of £175m going to ensure that every home can access a minimum speed of 2Mbps by 2012, to be a "regressive tax". It argues the cost to be unfair on the poor who will be "unable to, reap the benefits of that charge".

It is also raised concerns about the lack of a definition of the Government's proposed 2Mbps Universal Service Commitment due to the uncertainty of what it will mean in practice. The Committee believes that the definition should be the delivery of a minimum 2Mbps.

While the group of MPs welcomes the Government's action on digital inclusion, it is concerned that the funding for the measures is dwarfed by the proposed budget for the scheme.

In the report, the Committee also argues that early Government intervention in Next Generation Access "runs a significant risk of distorting the market and will not allow time for technological solutions to extend the market's reach across the country".

Committee chairman Peter Luff said: "We are also worried about the current arrangements for delivering the policy, with a part-time Minister [Stephen Timms] also serving in the Treasury.

"We believe this creates conflict of interest within the policy-making process, especially on an issue such as business rating arrangements and does not provide the appropriate level of Ministerial oversight."

Luff said: "In times of great stringency in public expenditure, digital inclusion not Next Generation Access should be the priority for expenditure.

"The market can be helped to deliver greater levels of high speed access without significant increases in public expenditure."

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