Gordon Brown’s Government wants to impose a new £6 + VAT tax which will be levied on every fixed telephone line in all homes and businesses across the country. Homes with multiple lines might pay multiple times. The tax would be levied on homes with and without broadband access.

Conservatives have unveiled alternative proposals to increase competition and introduce superfast broadband across the United Kingdom. The action plan will:

• Open up BT’s ‘local loop’ monopoly to other telecommunication operators, and review unfair business rate rules.
• Investigate the use of sewers and other utility infrastructure to lay broadband cables.
• Allow telegraph poles to be fitted with fibre optic cables, rather than old fashioned copper wire.
• Ensure that all new homes are capable of receiving superfast broadband through a fibre to the home network.
• Use money currently allocated to the digital TV national switchover to help establish a universal network, and after 2012, look at using this money to ensure superfast broadband reaches rural areas.

At present, 87% of homes in the South East have a fixed telephone line, and 74% have access to some form of broadband internet access.

Richard Benyon said:

“Some communities in West Berkshire are being held back by lack of access to Broadband.  This impacts on people’s ability to work from home, run businesses in rural areas, or to study.  Conservative plans will be a massive boost for all parts of West Berkshire, but particularly rural communities.   The Conservatives will open up the BT monopoly and increase competition, while Labour just want to hit homes with an unfair new phone tax.”

Notes to Editors

REGIONAL FIGURES – THE DIGITAL DIVIDE

The charts below show how many homes currently have a fixed telephone line and have access to broadband internet.

Source: Ofcom, Summary of telecoms and internet take-up, residential summary, Q 1 2009.

from http://www.ofcom.org.uk/research/cm/cmrnr09/charts/telecoms.pdf

LABOUR’S PHONE TAX

The Government are planning that every home and business with a fixed landline or other data lines will pay a £6 a year tax per line, across the United Kingdom. This is estimated to raise £440 million between 2010-13 (HM Treasury, Pre-Budget Report 2009, p.10). VAT will also be levied on top, raising up to £77 million in additional revenue, and raising the tax to £7.05 per line for a home.

It was originally proposed that this tax would only be levied on fixed copper (telephone) lines, but a consultation document published in December revealed the tax would be aimed at all local loops regardless of what they consist of (e.g. copper pair, co-axial cable, fibre) and it was intended to cover services which may “include traditional voice services or other data services”.

The consultation continues “where more than one local loop is provided...the duty is payable on both lines” (p..9). Some 1.7 million households have a different broadband supplier to their telephone line supplier (The Times, 26 November 2009). They could pay this tax twice. If a household also had a different supplier for its fax, they could pay three times what was originally suggested.

HM Treasury, Implementing a Landline Duty, December 2009.

http://www.hm-treasury.gov.uk/consult_landlineduty.htm

CONSERVATIVE ACTION PLAN

To help deliver the roll out of superfast broadband at speeds of up to 100 Mbps to the majority of homes across the UK by 2017, Conservatives would:

• Require BT to open up its infrastructure, including ducts and dark fibre, to other operators. This will allow others to build high speed networks and ensure that we do not rely solely on BT for the provision of superfast broadband.
• Investigate the potential use of other infrastructure, such as sewers, for the delivery of superfast broadband.
• Update building regulations to ensure all new build developments are able to receive superfast broadband.
• Current regulations will be amended to allow widespread aerial deployment of fibre using BT’s existing telegraph poles. Since fibre optic cables are far more efficient and have far higher capacity than old copper wire cables, there will be no detrimental effect on visual amenity.
• Re-examine the case for changing the rating system for fibre networks with a view to removing all current disadvantages suffered by new operators.
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• Support the use of any under spend from the digital switchover fund being used to establish a universal broadband network of 2 Mbps by 2012. We believe that this approach could be continued post-2012 if the market has not started delivering superfast broadband to all parts of the country, including rural areas.