Headline hysteria - will 100,000 homes be forced to give up broadband?

3 November 2009

Read any newspaper website, and there are sure to be several stories that make no sense whatsoever. Like a Magic Eye poster, you find yourself staring at them for several minutes before all becomes clear - it's complete bullshit. And so we cross to The Telegraph for a high profile news story that warns of a catastrophe awaiting broadband users in the UK:

Bitterwallet - 100,000 homes will lose broadband, says The Telegraph

Yikes! Grim times ahead for low income families using broadband, as Government taxation will mean they have no choice but to disconnect from the internet. And this won't affect just a handful of society's most vulnerable, but 100,000 homes. It's a tragedy in the making warns Charles Dunstone, chief executive of Talk Talk - one of the country's largest suppliers of home broadband. Dunstone explains more:

“As well as being unfair we estimate that the increase in price will mean that over 100,000 mostly low income homes will be forced to give up their broadband lines. This is wholly inconsistent with the Government’s plans to tackle digital exclusion by increasing uptake and use of broadband."

Goodness, it's now over 100,000 homes that will have no other option whatsoever - like switching to a cheaper broadband tariff, perhaps - other than to regress to life in the 1980s. But what is this crippling taxation Dunstone speaks of? The Telegraph explains:

Mr Dunstone estimates that around 100,000 lower income households will be forced to give up their own internet connections in able to cover the 50p per month tax that will be added to all domestic phone bills to fund the roll-out of next-generation broadband networks.

The tax, which was first proposed in the Digital Britain report, published in June, will last for around seven years, costing each household a total of £42 and raising about £1 billion for investment in high-speed fibre networks.

And there we have it. No, really - that's it. At no point does Dunstone reveal how he arrived at this figure, nor does the Telegraph seem interested in the maths. Surely some thinking would be useful in justifying the headline or the statements that follow? But no, you don't need to know anything else - just accept that over 100,000 homes that currently can afford a broadband service, won't be able to in the future.

Right. A couple of questions from us, then. Why is Dunstone arguing against the tax based on these numbers? Look at the Government statistics - 63 per cent - or 16.5 million homes - have a broadband connection in 2009; Dunstone is arguing against the tax based on barely half of one per cent of homes losing broadband. And that's based on the current numbers; in seven years time, all indications are that the number of broadband-enabled homes will be far higher, and that's ignoring the proposed benefits of the tax over that time, which includes a rollout of a minimum 2MB network to reach all UK homes.

So this argument against the tax makes no sense based on current usage. But then there's the bigger question - would low income homes really balk at the thought of investing £42 over seven years? After all, what does Dunstone think these homes are doing on the internet anyway? Are we certain they're not contributing in any way to the £3 billion a year spent on online food deliveries, and or playing any part in spending an expected £8.9 billion online this Christmas, representing a fifth of all seasonal spending? And let's consider some other facts about internet usage - that 60 per cent of internet users browse price comparison sites, a similar number research services and products before buying, 40 per cent are engaged in auctions and over a fifth are selling goods online. 26 million people - one in two adults in the UK - have made an online purchase in the last three months.

The fact is that in the majority of UK homes, the internet plays a vital role in saving money, spending money and managing money (over half of all internet users use online banking; over a third use the web to pay bills). How many homes would be willing to go without all of these benefits and services for a sake of 50 pence per month? There's a far stronger argument for the internet decreasing a low income family's expenditure by considerably more than £6 a year.

So what the blithering hell is this news story all about? If there are genuine concerns about this level of taxation, where are they? Does this story exist because a chief executive with a vested interest is pushing it for the sake of his own agenda, or is it another example of paper-thin churnalism where press releases are dressed up as news stories by reporters so squeezed for time that investigation is a luxury they can't afford? Oh, hang on - I've just read the final paragraph:

“We now need to let the private sector drive next generation broadband as far as it can. Public funding at this stage... is simply going to waste customers’ money and slow down roll-out."

And there we have it - taxation and public funding threatens the profits and expansion of companies like Talk Talk. That's a far more relevant story than the bullshit-baffles-brains presented to the reader without question.


  • Gunn
    I'll gladly pay a tax if it improves the network but isn't that for the provider to do not the government, they will either just pocket the cash or mess it up. their lofty ambition of getting everyone at least 2Meg broadband was hardly promoting digital Britain.
  • Paul S.
    I think that's a separate issue. If Charles Dunstone was arguing against the tax because the Government's goals weren't ambitious enough or were unachievable, or because private companies were going to do the job anyway - that'd makes sense and indeed, be a news story. But I don't see any evidence in the story that low incomes families are too poor to justify paying an additional 50p a month for a service that arguably returns far greater financial benefits.
  • BobF
    Wasnt it a case that everyone pays the 50p tax, even those without broadband atm? And as I always maintain, if the percentage involved isnt even a whole number, then its not worth worrying about. But yes, the tax will end up being used to fund something stupid, like the olympics, or wasted in paying for some useless "case studies" or meaningless committee evaluation.
  • MrRobin
    50p tax today, £50 tax tomorrow! You watch! Then there'll be gas pipe tax to help fund energy efficient boilers for swimming pool owners.
  • GerraJob
    I would make jobless households pay £5 extra per month, meaning the already overburdened hard-working tax payers don't have to pay. The incentive? If you want to save a fiver a month, get a fucking job instead of bleeding the country dry to pay for your broadband and sky+
  • Paul S.
    Now there's a tax we can all agree on.
  • goon
    isnt telecoms privately owned so why is the public paying for it
  • Mr. B.
    All of your utilities are paid for already. What you recieve is not a bill BUT a Bill of Remittance. This means, in legal terms, it is a credit to your account. no money = now war http://www.youtube.com/watch?v=6cQBY0ZO2Rc&feature=player_embedded

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