MPs slam 'regressive' broadband tax plans

Plans to put a surcharge on broadband lines have been slammed by a group of MPs as "regressive" and "poorly targeted".

The Digital Britain report was released last year and makes up the bulk of the Digital Economy Bill, which is currently going through parliament. The proposals have called for 2Mbps connections across the country, with the roll out to be paid for partially by a 50 pence broadband line tax.

The new report from the Business, Innovation and Skills Committee has slammed the thinking behind both those ideas.

Broadband tax

Regarding the broadband tax, which would be introduced in the next budget, the report said faster broadband would mostly benefit well-off people, while taxing all those with fixed phone lines - especially less well off people and the elderly.

"Such a levy would be both regressive and poorly targeted. It would have a much greater pact on the less well-off who will pay for an enhanced service which only a minority will enjoy," it said.

"If public funds are required for Next Generation Access, they should be raised through general taxation, in the same way as for any other national infrastructure programme," it added.

2Mbps - what does that mean?

The report found no problem with the 2Mbps goal, but said the government had no idea what that goal actually means.

"This is an appropriate and achievable ambition. But the Government has not defined what 2Mbps will mean in practice," the report said.

When asked by the committee what the 2Mbps pledge actually meant, Minister Stephen Timms said it was not a guarantee of a minimum connection speed, but that the service would be "capable" of such speeds.

The Government later told the committee that the universal connection "should look and feel like a 2Mbps commitment as someone in areas served by the market would understand it" - which the report said was "not a helpful statement."

The committee called for a clear definition of what the pledge means, saying it should provide a 2Mbps connection at minimum.

Leadership

The report also called for a full-time minister to head up the Digital Britain project, noting that the departure of the report's author Lord Carter was a major blow.

"We remain concerned that following the resignation of Lord Carter, the Ministerial structure which created a part-time Minister for Digital Britain provides neither the appropriate ministerial oversight nor the weight to match the importance of this policy area."