Return of the landline duty?

thinkbroadband.com is today reporting that Internet Service Providers have put the issue of a residential broadband levy back on the agenda in a meeting with Ed Vaizey, Minister for Communications, Culture and Creative Industries, which took place earlier this week. The story first appeared on ISP Review, where there is a little more detail about the meeting.

The story is a little confused, not least by the context of the meeting being intended to discuss the controversial rating system for fibre installation, but ISPs appear to have suggested that the government institute an £8/year levy on residential fibre to the home connections of 1ooMbps.

The purpose of the levy is not clear, and neither is Vaizey’s reaction to what was apparently a ‘lively’ discussion. The last government intended to legislate to raise a £6/year levy on ordinary telephone landlines so as to generate funds to roll out fibre in the ‘final third’, but this was derided by the Tories in opposition, with George Osborne taking great delight in cancelling the by then already-dropped plans in June’s ’emergency’ Budget. It is not evident that this newly-proposed levy would be used in this way. Further mystery is added by the absence from this week’s meeting – apparently invitations weren’t extended – of both BT and also Vtesse Networks, the latter of which has made probably the most amount of noise on the issue of the rateable value of fibre installation which was, after all, the purpose of the meeting [Edit 14 January: ISP Review has since corrected its report to state that, although not being invited to the original meeting, Vtesse was represented, by its Finance Director, at this week’s re-scheduled one].

An £8/year levy on residential 100 Mbps connections isn’t likely to raise much money – though getting the principle in place would be a useful start to raising the sorts of money that would be required to make a serious dent in the ‘final third’. Neither does Vaizey have much political scope for manoeuvre on the issue, given both Osborne’s actions in dismissing the landline duty so comprehensively and the Tories having also dropped their manifesto commitment to reviewing the tax paid on fibre connections. Though this of course wouldn’t be the first policy U-turn by this ConDem government, even this week.

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