ISP TalkTalk’s CEO Charles Dunstone criticised the government’s plans to impose 50p per month broadband tax on landliners to fund high-speed broadband infrastructure in rural UK, saying the scheme will further increase the digital divide as more than 100,000 phone users, especially, from low income homes may leave broadband for cost reasons.

“This is wholly inconsistent with the Government’s plans to tackle digital exclusion by increasing uptake and use of broadband.” he added.

This ‘unjust and regressive tax’, he said, would ’subsidise mostly richer rural families that can afford high priced super-fast broadband services’

The scheme will also delay the next generation broadband roll-out in rural areas as the private network providers will need to wait for the allocation of public funds.  He also fears that ‘much of the tax money will be wasted investing in networks that the private sector would have built itself anyway.’

Many recent broadband speed surveys indicated that UK broadband lags behind many developed nations like Japan, Sweden and South Korea in terms of speeds. Ofcom has reported that on average an UK broadband user gets download speeds of around 4.1 Mbps while the same is over 10Mbps for a user in Japan which has turned a fully fibre optic broadband nation over the years.

Digital Britain Report, published in June, gave its suggestions on the next generation broadband roll-out for almost 90% UK homes by 2017 that also included 50p per month broadband levy as a means of funding the roll-out.
 
However, Dunstone feels that the government should let ‘the private sector drive next generation broadband as far as it can’ instead of going for public funds to compete with Korea or Netherlands.  

“Public funding at this stage is simply going to waste customers’ money and slow down roll-out” he warned.

TalkTalk also feels the government is not prepared for a public debate on the broadband levy issue. Andrew Heaney, TalkTalk’s director of strategy and regulation would meet a committee at the Department for Business, Innovation and Skills (BIS) to brief the company’s concerns over the possible misuse of public funds meant for spending on broadband roll-out.