The British government has begun a twelve-week consultation on the proposed broadband tax that is expected to help fund the rollout of superfast broadband services across the country, Reuters reports. It has been widely claimed that the current government is keen to sign the new levy into law prior to the upcoming general election, which is expected in May 2010.
Under the proposals, which were unveiled as part of the Digital Britain report released in June 2009, the state plans to raise approximately GBP150 million to GBP175 million (USD225 million to USD263 million) per year by introducing a GBP0.50 per month levy on every fixed line voice and/or broadband connection. This extra charge is to be paid in to a Next Generation Fund (NGF), which will be managed by regulator Ofcom. The consultation launched has called on telecoms and internet industry players to put forward views on how the funds raised should be spent. Business Secretary Peter Mandelson said that the investment was essential to preserve Britain's international competitiveness and prevent a new digital divide emerging between those with fast and those with slow connections, noting: ‘Already the market is delivering superfast Internet speeds of 50Mbps to half the country but we cannot be certain that it will reach the communities that are not currently served.’
The government has estimated that as the result of private investment already being undertaken by providers such as fixed line incumbent BT and cableco Virgin Media, superfast broadband will reach around 70% of the population by 2017, but the state is keen to boost this figure to 90%.