Monday, 2 November 2009

TalkTalk Criticize Broadband Tax Plans

The Government 's plans to introduce a broadband tax in order to cover the cost of providing 'broadband for all' has been criticized by telecoms company TalkTalk. The planned tax, announced as part of the Digital Britain report, would cost users around £0.50 per month and is likely to be leveled at those receiving fixed line broadband.

TalkTalk's chief executive Charles Dunstone (who seems to enjoy being provocative) has said that the £6 per year tax could force low-income households to give up their internet connections:

"This is an unjust and regressive tax on all phone customers which will subsidise mostly richer rural households that can afford high priced super fast broadband services. As well as being unfair we estimate that the increase in price will mean that over 100,000 mostly low income homes will be forced to give up their broadband lines. This is wholly inconsistent with the government's plans to tackle digital exclusion."

Whilst it is admirable to defend those who are on low incomes who stand to gain from having a broadband connection, the figures just don't add up. An extra 50p per month is unlikely to dissuade people from getting connected. Cheaper alternative such as pay as you go mobile broadband are available and the benefits of an internet connection are hard to ignore.

Only 10% of people polled by Ofcom this summer intended to cut back on broadband costs. With the money people are able to save by shopping online a broadband connection could pay for itself.

BT have previously suggested that the tax be paid by those who own a mobile phone in order to spread the cost. The Conservatives have opposed broadband taxation so the outcome of the general election might decide the fate of the tax.

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