Digital Britain: new landline tax to pay for broadband roll-out

Published 18th Jun 2009

A new 50p per month broadband tax is to be levied on every home and business with a phone line under government plans to raise up to £1.5bn to pay for the next generation of internet connections.

In his flagship Digital Britain report published today, communications minister Lord Carter also set himself on a collision course with the BBC with plans to divert money from the licence fee to fund a £200m investment in bringing existing broadband services to everyone in the country by 2012.

Beyond that date, he wants to continue to raid the licence fee to pay for regional news and children's programming, which broadcasters are cutting back on amid the collapse in television advertising.
MediaGuardian editor Jane Martinson: 'The first time they've talked about diverting money from the BBC' Link to this audio

The BBC Trust chairman, Sir Michael Lyons, hit back at the plan, warning that the broadcaster's governing body "will not sit quietly by and watch this happen".

"The licence fee must not become a slush fund to be dipped into at will, leading to spiralling demands on licence fee payers to help fund the political or commercial concerns of the day," he said. "This would lead to the licence fee being seen as another form of general taxation."

Carter stressed he is not advocating a reduction in the BBC's licence fee, but he wants some cash, which it currently receives to help people switch to digital TV, to be set aside for local news, and in future possibly also children's programmes. The National Audit Office believes the corporation could be sitting on a £250m surplus from the digital switchover fund.

"The case is made to make available public funding for the provision of news in the nations and regions," said Carter. "It is our view that we have a funding mechanism for public content – it is called the TV licence fee."

Lord Carter's 238-page report covers everything from combating internet piracy to setting a 2015 date for the switch to digital radio. Alongside the plan to get existing broadband – at 2Mb per second – to everyone in the UK by 2012, Carter took many in the industry by surprise by proposing the new 50p-a-month tax on all phone lines. That will raise between £150m and £175m a year which the government will make available to companies such as BT which want to push the next generation of internet networks, allowing consumers to download music in seconds and movies in a minute, to 90% of the UK population by 2017.

Mirroring Gordon Brown's recent appointment of Alan Sugar as enterprise champion, Carter also announced the appointment of Martha Lane Fox, one of the founders of travel site Lastminute.com, as his "champion for digital inclusion", charged with persuading the 30% of households who are not online to get broadband access.

But the report was immediately attacked by shadow culture secretary Jeremy Hunt as "a colossal disappointment" and "digital dithering" as it will result in yet more discussions over the summer. "Where in all this is a single action?" he asked. "But there is one area in which this report has excelled itself: consultations. This is surely government of the management consultants, for the management consultants, by the management consultants."

The film and music industries also reacted angrily to what they saw as Carter's half-hearted attempt to clamp down on people who illegally share copyrighted material over the internet. The report proposes forcing all internet service providers to send letters to customers they believe are illegally downloading copyrighted content. But it will then be up to the media companies to take legal action against illegal downloaders through the courts. If that does not work, internet users could have their broadband connections slowed down or access to particular websites blocked after a year, although this is also up for further consultation.

Recent research has shown that more than two-thirds of internet users would ignore warning letters, and with more than 6 million internet users in Britain regularly downloading illegally copied music and films, the media industry believes so-called "technical measures", such as ­slowing down broadband connections, should be introduced before the courts system is clogged up with thousands of lawsuits.

Lavinia Carey, chair of Respect for Film and director general of the British Video Association, said: "As an alternative to legal action we advocate a more effective and proportionate approach, namely the prompt implementation of technical measures or 'road humps' for persistent infringers in order to make life difficult for them to continue to access content illicitly, while still enabling them to access other services such as email, banking and shopping sites."

Source: ' Guardian '

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