Telephone tax: On the Line?

The Commons Business Committee has today criticised a planned tax on broadband, saying it would “place a disproportionate cost on a majority who will not, or are unable to, reap the benefits of that charge” (according to the FT).  My colleague Mark Wallace first criticised the telephone tax in the wake of the PBR and now it seems MPs are finally catching on to how unfair this planned charge is.

Lord Carter’s Digital Britain Report, published in June 2009, tested the water for a 50p a month levy on households with a telephone line, to help pay for universal broadband access.  Getting everyone in Britain on a fast internet connection is going to cost quite a lot of money, and inevitably those who don’t want it will pay if Lord Carter’s suggestion is taken up.  It is naive to think that this tax on broadband will facilitate better access to communication; what it will do is foster resentment among, and place financial pressure on, those who don’t want it.  Why should it be that if you have a telephone you should pay for other people’s broadband use?  Owning a landline phone is no indication that you want or need what’s being billed as ‘superfast’ internet access.  Millions of people will be paying this annual £6 charge for years, but it is unclear how many of those paying will benefit.

I’ve grown up watching the internet metamorphose from something expensive slow and limited, into a powerful tool that is accessible at the touch of the button held in the palm of my hand.   For most people it is a part of their working day, used at home in their leisure time and generally is something taken entirely for granted.  Yet there are still hundreds of thousands of people in the UK who have no access to broadband, and make do with dial-up internet, or nothing at all.  Even a tech-enthusiast like me has to recognise that some of these people neither want nor need broadband, so why should they pay for those who do?   A phone is a basic communication device and those on low incomes, who simply cannot afford this new telephone tax, or the elderly who have no desire to use broadband, are going to end up forking-out and getting nothing back.

It is clear that a market-led solution is the right way of getting broadband access to those who want it; the government should be looking at incentivising broadband companies to invest in making superfast connections accessible to those who are currently without.  The Commons Business Committee is suggesting a temporary removal, of business rates on fibre optic cable and this is certainly one way of achieving this, while relieving a small tax burden on businesses hit by the credit crunch.

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