Is the broadband tax about to fall by the wayside?

Some months ago the UK government issued its support for a so-called broadband tax in the UK which would effectively see a 50p a month charge on every landline in the country. This will be used to create a £200 million a year fund for investment into the UK broadband industry, allowing the government to reach its goals of universal broadband in the UK with a minimum speed of 2 Mb per second. However, a report by a committee of MPs suggests that this tax is ill-conceived and it could actually fall by the wayside.

There are concerns that the £200 million income which the broadband tax is forecast to bring in each year has not been clearly earmarked for any specific investment issues. At the moment everything seems to relate to nationwide broadband in the UK without any specific goals, targets or individual investment requirements. As a consequence this attack on the UK government broadband tax could well sound the death knell and leave the private sector to take the lead on this particular issue.

However, if the private sector is left to its own devices we could see a reduction in competition in due course so in many ways this is something of a double edged sword.