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 fund the extension of fast broadband to all homes in the country. This is likely to be passed on to customers, with domestic broadband bills estimated to rise by around £1 a month.

The new administration plans to bring speeds of 24Mb or greater to reach 95% of the UK population by the end of 2017 but extending connections to all premises could cost an additional £500 million due to the challenges of getting people online in hard-to-reach locations.

While the Department for Culture, Media and Sport (DCMS) favours a funding option that imposes a tax on broadband, mobile and phone providers, reports suggest that has yet to make a final decision that 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" broadband investment, and highlights the previous coalition government had branded similar plans from Labour an "archaic" way of boosting broadband spending.

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

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

Source: Financial Times

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