Tax Revenues Could Fund UK's Broadband Network

by Robin Pilgrim, LawAndTax-News.com, London

25 September 2008

Ofcom, the UK's regulator of telecoms and the media, has this week published proposals to encourage further investment and competition to deliver super-fast broadband to UK homes and businesses by using revenue generated from taxpayers.

The proposals seek to build on the innovation and competition delivered in current generation broadband, by introducing a next generation broadband which will deliver speeds of up to 100mbps, with services delivered through technology including fibre optic cables rather than copper wires, which currently deliver speeds of up to 8mbps to most homes.

To achieve this, Ofcom aims to provide certainty on the future regulatory environment for super-fast broadband by setting out new proposals for consultation in five main areas:

  • developing clear standards for wholesale products, thereby allowing communications providers to compete and innovate in the super-fast broadband market;
  • allowing pricing freedom where there is effective competition, giving companies the flexibility to price services that reflect investment risk and generate a return on investment;
  • understanding the scope for competition based on access to existing telecoms infrastructure, building on the success of local loop unbundling;
  • facilitating transition by ensuring the smooth and timely move from traditional copper to fibre networks for both industry and consumers as services take off; and
  • communicating the next steps for Ofcom: how they will work with other interested parties including industry, the UK Government and the European Commission.

However, in a statement released by Ofcom on Wednesday they explained that the UK government needs to ensure that all areas of the country receive access to the broadband, and have suggested using tax revenues as a method of giving areas with poor broadband coverage the same level of access.

Ofcom’s plan of action includes continued engagement with stakeholders, building on the Ofcom industry roundtable held on September 2, to ensure the timely and efficient delivery of services.

Ofcom intends to publish a statement on super-fast broadband in the spring of 2009.

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