50p broadband tax 'will leave 20 pc of UK without fibre' (Taxing the Internet due to lack of funds)

Silicon.com ^ | 2 July 2009 | Natasha Lomas

[greatdefender]

BT reckons a government plan to put a 50p tax on copper lines in order to fund fibre broadband to the country's hard to get to places can only go so far - and will probably never reach the last fifth of the UK.

The plan, unveiled last month in the government's Digital Britain report, is aimed at ensuring superfast broadband is rolled out to areas likely to be ignored by the market.

Liv Garfield, BT's director of strategy, said today that she believes the 50p per month levy will still leave a proportion of the UK without fibre.

"I could see a way to get to 80, 85 per cent with [the fund generated by the fibre tax] but I struggle a little more if it is up to 100. It's impossible to get up to 100."

Neil Brown, telecoms partner at law firm Eversheds, shares BT's view that 50p won't go far enough.

"An extra 50p on landlines will not go very far in terms of what's required and at a time when public spending is going to be subject to significant constraints.

"The challenge of releasing or attracting funds which are adequate to realise the government's ambition of securing, for the UK, its position 'as one of the world's leading digital economies' is going to present quite a challenge," he said in a statement.

Back in May, the telco revealed it is accelerating its rollout of fibre exchanges and BT's Garfield said the next phase of exchanges to be fibre-enabled is likely to be announced sometime next week. The accelerated programme will mean more than a million premises will be within reach of fibre-based services by March 2010, rising to around 1.5 million by next summer, she added.

David Campbell, BT Openreach's MD of next-generation access, added that the telco will deploy a mixture of fibre to the premises (FTTP) and fibre to the cabinet (FTTC) for next-generation access - with P or C being chosen depending on the economies of each exchange.

"The thing that really dictates the economies of P rather than C is the amount of civils' work you have to do [ie digging up roads etc to lay fibre] so where we feel there are no civils and we can run fibre all the way to the customer - either overhead or underground infrastructure - then it's more cost effective," he said.

Garfield added that upstream speeds are likely to be a key differentiator for fibre. While the telco expects the increase in headline upstream speeds that fibre will bring to be popular with consumers, BT believes "the uploading capability is probably one of the critical points and certainly a USP [unique selling point] for this particular service," according to Garfield.

[Bernard]

So many governments are trying to tax themselves into prosperity; maybe one of them will find the magic formula and actually do this for the first time in recorded history.