Levy on Broadband Upgrade Cause for Concern
Lord Carter’s Digital Britain proposes imposition of a levy upon broadband users throughout the country, creating apprehensions of violation of the EC competition rules regarding state aid.
In response to the report, an EC spokesperson has expressed that until the government specifies the mode of implementation of the said scheme, the EC authorities cannot take any action in this regard. The question that arises here is whether the proposal is in breach of the rules limiting state aid for commercial purposes, but until the government elaborates upon this scheme, nothing can be said with certainty.
The proposed fee of £6 every year, with a break up of 50 pence every month by each of the individual broadband users towards the estimated cost of around £200 million has been in question for more than one reason. The measure aimed at subsidizing the total expenditure in the plan to upgrade broadband speeds all over the country to 2Mb from the present speed has not met with enthusiastic support from many corners.
According to Lord Carter, the purpose of the proposed levy has been clearly laid down in the report itself, saying that this is being done to meet the challenges of the competitive market and the reduction of the headline prices by creating an offset for the same.
However, the EC authorities are not convinced of the fact and are already conducting a check to see whether the levy is in accordance with the competition rules, which ought to be followed by every funding scheme of the state. It is not clear whether charging the present users for updating the system is in violation of the rules or not. To keep up-to-date with the latest broadband news, refer to Broadband Genie, they also offer really good broadband advice and info on things such as pay and go dongles for mobile broadband.
