Viatel: Loss of Broadband Tax could Halt Next Gen Broadband

If you haven?t heard of communication and internet provider Viatel it?s probably because they provide business rather than residential connections. This week, the ISP has questioned just how the government intends to be able to make superfast broadband a reality without the now scrapped broadband tax.

Under the labour government, much of the money to fund the rollout was going to be generated by a 50p per month tax on telephone lines that would have generated enough money to move forward with the goals of the project. The tax was quickly scrapped under the coalition government but would have raised around ?175m a year. In response the government wishes to instead use money from the licence fee, but this won?t be possible until 2012 and will generate only around ?120m.

Viatel has suggested that budget problems and a lack of a clear goal could cause major problems in a next gen rollout:

Product Manager for Connectivity at Viatel, Steve Powell, commented:

?”BT?s recent commitment to extending its superfast broadband network was great news, but this week’s budget could mean more delays. There have always been questions over how to deliver superfast speeds to the whole country ? BT?s most recent announcements only planned to cover two thirds of the country ? and the danger is that many businesses will be left in the slow lane.

This lack of availability to businesses up and down the country could cause serious headaches as organisations seek additional bandwidth in order to support more and more bandwidth hungry and mission critical applications over these connections.”

Currently there are only two real goals from the UK government right now, and neither can be called a ?promise?. The first is the by 2012 we should see everyone in the UK having access to speeds of 2 Mpbs, although this is likely to be technically filled much sooner when the HYLAS1 satellite goes online providing users with 8 Mbps wherever they are in the country ? for a price.

The second is to make sure the broadband rollout happens in rural areas just as quickly as it happens in cities and will use public sector cash to fund the rollout where private companies can?t justify the cost. Neither commitment really focuses on business broadband.

We won?t find out exactly how money is being spent ? or indeed how much money the project will have in the early years ? until the industry event on July 15^th.

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