Superfast levy could mean bigger broadband bills

Broadband customers could foot the bill for the rollout of superfast internet to remote areas. The news follows new proposals by the government, which hopes to raise the £500 million needed to cover the ‘final 5%’ of homes.

The government wants to impose a levy on providers to help fundthe extension of fast broadband to all homes in the country. Thisis likely to be passed on to customers, with domestic broadbandbills estimated to rise by around £1 a month.

The new administration plans to bring speeds of 24Mb or greaterto reach 95% of the UK population by the end of 2017 but extendingconnections to all premises could cost an additional £500 milliondue to the challenges of getting people online in hard-to-reachlocations.

While the Department for Culture, Media and Sport (DCMS) favoursa funding option that imposes a tax on broadband, mobile and phoneproviders, reports suggest that has yet to make a final decisionthat this is how the money will be raised.

The plans face opposition from the internet services trade body,ISPA, which claims that a levy could "undermine" broadbandinvestment, and highlights the previous coalition government hadbranded similar plans from Labour an "archaic" way of boostingbroadband spending.

Wireless and satellite technologies are currently being testedto see whether they are capable of reaching the required speeds,which could alleviate the financial burden. The trade body forservice providers, ISPA, said the trials were "encouraging".

A spokesperson for ISPA said: "Government would be better offfocusing efforts on encouraging investment and competition."

Source: Financial Times

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