Tax to pay for fast net access

Tax to pay for fast net access
17 June 2009 | | Internet, Technology

Lord Carter tells the BBC’s Sophie Long why his Digital Britain report calls for phone line charges and punishing file sharing piracy.

Every Briton with a fixed-line phone will pay a “small levy” of 50p per month to pay for faster net access.

The national fund created by the levy will be used to ensure most Britons get access to future net technologies.

The proposal is part of the Digital Britain report outlined by Culture Secretary Ben Bradshaw in Parliament.

The report also includes a pledge to curb unlawful file sharing by giving regulator Ofcom new powers to identify persistent pirates.

To encourage take-up of broadband services the government has appointed online entrepreneur Martha Lane Fox as a digital champion.

Mr Bradshaw told the Commons that the government intended to upgrade all national radio stations from analogue to digital by 2015.

It promised a “more robust” system of content classification for the video games industry.

The report, commissioned by the government last year and written by communications minister Lord Carter, offers a blueprint for the UK’s digital future.

“Digital Britain is a statement of intent and ambition, a commitment to infrastructure and access, and an overdue recognition of the industrial importance of the creative industries,” said Lord Carter.

The main points outlined in the report include:

• a three-year plan to boost digital participation

• universal access to broadband by 2012

• fund to invest in next generation broadband

• digital radio upgrade by 2015

• liberalisation of 3G spectrum

• legal and regulatory attack on digital piracy

• support for public service content partnerships

• changed role for Channel 4

• consultation on how to fund local, national and regional news

• £130m of BBC licence fee to pay for ITV regional news

Spooks production firm warns piracy will kill off quality TV

One of the biggest surprises in the report was the promise to introduce a levy on fixed telephone lines in order to pay for fast broadband rollout to those areas of the country – estimated to be around one-third – which won’t be reached by commercial efforts.

It will amount to a 50p a month tax for every household in the country with a fixed phone line.

“It is a contribution which we are asking people to make – it’s six pounds a year – offset, as we make very clear in the report, by the likely continued reduction in headline prices because of the competitive market we have in this country,” said report author Lord Carter.

Antony Walker, chief executive of the Broadband Stakeholders’ Group, believes the tax will mean that 90% of the UK will be able to benefit from broadband of up to 50Mbps by 2017.

“It is a top-up subsidy for the last third of the country and must focus on those areas that would otherwise be uneconomic to deliver fast services to,” he said.

 

Culture Secretary Ben Bradshaw announces legislation to curb unlawful file-sharing

He thinks it will eliminate the problem of a two-tiered internet where towns and cities benefit from fast speeds while rural areas remain in the slow lane.

But Alex Salter, from broadband measurement firm Sam Knows, doubts the levy will create enough money to bring next-generation access to every home.

“It answers the main question from the last report which was who is going to pay. This is less expensive per capita than similar schemes, for example in Australia, but is unlikely to generate the full budget required – this will still have to come from the providers,” he said.

Communications minister Stephen Carter said that some £200m of funding would be spent to extend coverage to the 15% of UK homes which do not receive broadband at 2Mbps.

The government has pledged to complete this by 2012.

The majority of the money will come from funding ring-fenced in the BBC licence fee for the digital switchover.

Some of this money will also be used to support regional news on commercial channels.

Sir Michael Lyons, BBC Trust chairman said it would fight any changes to the licence fee.

BBC Trust chairman Sir Michael Lyons rejects sharing income

Backstop powers

To combat the growing problem of illegal file-sharing the government has given greater powers to Ofcom and internet service providers.

It will allow them to identify illegal downloaders and pursue a “write and sue” approach for the worst offenders.

But the British Phonographic Industry, which represents the UK’s record labels, was not impressed.

“The government appears to be anticipating its failure by lining up backstop powers for Ofcom to introduce technical measures later,” said the BPI chief executive Geoff Taylor.

The shadow culture secretary Jeremy Hunt said the document was a “colossal disappointment.”

World class?

Prime minister Gordon Brown said that the report would pave the way to making Britain’s digital infrastructure world class.

“Britain is going to lead the world. This is us taking the next step into the future to being the digital capital of the world. It is making sure no family or business misses out,” he said.

Currently Britain stands at about seventh in global broadband league tables, below nations such as Korea, Japan, Sweden and Norway.

The digital and communications industry in the UK is said to be worth around £52bn a year. Lord Carter estimated that some 22 million Britons rely on the industry for their daily work.

Digital Britain was launched in October 2008 to establish a framework for the UK’s digital economy. There then followed eight months of lobbying and consultation with an interim report published in January.

Lord Carter is due to quit his post during the summer recess.

The report was a joint effort between the Department for Culture, Media and Sport and the Department for Business, Innovation and Skills.

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