Broadband Levy for Superfast Net

As the government decides how to bring high-speed internet access to remote areas, homeowners' broadband bills could potentially rise.

As it stands the government is currently looking into how it can raise an estimated £500m to take superfast broadband to the final 5%.

Industry watchers said one of the options to generate the needed money is to impose a levy on firms involved in rolling out broadband. Such a levy would add around £1 a month to domestic broadband bills.

The UK government plans aim to get superfast broadband (line speeds of around 24 megabits of data per second) to 95% of the population by 2017/18.

Extending this to 100% of the population will mean reaching out to remote parts of the country, which is likely to cost them around £500m. There are several wireless and satellite technologies being tested to see if they can bring fast enough net access to those areas.

The Internet Service Providers' Association (ISPA) said such a levy could undermine the investment that net providers were making to accelerate broadband speeds in the UK. It also said however that trials of satellite and wireless technologies were "encouraging".

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

ThinkBroadband's Andrew Ferguson believes any levy on industry would undoubtedly be passed onto customers, bumping up monthly bills.

He said: "If a £500m levy was to be raised over two years, it would add around £1 per month to every broadband bill if we assume providers passed on the levy in full - and we see no reason why they would not.

"The departments that stand to gain are people like Defra with farmers happy to deal with online forms when they have a good connection, the NHS which can do more remote consultations and HMRC that can move even more to an online only presence."

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