Digital Britain: ‘Broadband tax’ on phone lines and licence fee money for local news

June 16, 2009 at 7:46 pm Leave a comment

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by Tony Grew

The Culture Secretary has told MPs that the proposals in the new report Digital Britain will transform the internet in the UK.

Ben Bradshaw made a statement on the report this afternoon.

Among the propsals are “a small levy” of 50p a month on all fixed phone lines to establish an independent national fund, “which will be used to ensure maximum next generation broadband coverage.”

Entrepreneur Martha Lane Fox has been named as the government’s new digital inclusion champion.

The report reiterated the government’s intention to upgrade all national radio stations from analogue to digital by 2015, with DAB “firmly placed” as the primary platform.

Mr Bradshaw also announced that licence fee money would be used to prop up local news services.

“The licence fee is the existing major intervention for content,” he said.

“There is nothing in either the BBC charter or legislation to say the BBC must have exclusive rights to it.

“Independent of the level at which the licence fee is set after 2013, we will consult on the option of sharing a small element of it post-2013 to help ensure high-quality plural provision, particularly in the regions and the nations.

“Subject to that consultation, we will use some of the current digital switchover underspend to fund pilots of this model in Scotland, Wales and one English region between now and 2013.”

Mr Bradshaw said that the government still supports multi-annual licence fee settlements for the BBC, “but we also believe that it is in the BBC’s own interests to evolve into more of a public service partner with other media organisations, and to see itself as an enabler of Digital Britain.

“We have been encouraging discussions about a joint venture between BBC Worldwide and Channel 4, which we believe would benefit both, as well as securing the future of Channel 4. Those talks are ongoing, and we are ready to help in any way we can.”

Mr Bradshaw said the digital revolution has “huge potential” to improve the services of government and public bodies, and to reduce costs.

“The report sets out how public services will be delivered primarily online and electronically, thus making them quicker and more responsive to the public while saving money for the taxpayer.”

He announced there would be new legislation to curb unlawful peer-to-peer file sharing.

“Ofcom will be given a new duty to reduce this practice significantly, including two specific obligations: the notification of unlawful activity and, for serial infringers, identity release to enable targeted legal action by rights holders.

“We also propose technical measures by internet service providers, such as bandwidth reduction for serial infringers, if the other measures prove insufficient.

“We will also implement a new, more robust system of content classification for the video games industry, building on the pan-European game information system with a strong UK-based statutory layer of regulation; that will ensure the protection of children, now and in the future.”

Mr Bradshaw said other countries are investing heavily in next generation fixed broadband.

“Telecommunications prices for the consumer have fallen significantly in recent years and are expected to fall further as technology advances, so we have concluded that the fairest and most efficient way of ensuring that people and businesses are not left out is to use some of that saving in the form of a small levy on all fixed lines to establish an independent national fund, which will be used to ensure maximum next generation broadband coverage.

“To complement improvements to fixed broadband, we also need to modernise our wireless network. This report sets out plans for the structured release of sufficient high-quality spectrum Europe-wide, for the creation of the next generation of mobile networks.”

Shadow Culture Secretary Jeremy Hunt called the report “a colossal disappointment.”

“The introduction, on page three, says that the report seeks to achieve seven things,” he said.

“So what are they? The first is an “analysis”, as is the second; the third is a “statement of ambition”; the fourth is a “restatement” of need; the fifth is an “analysis”; the sixth is a “framework”; and the seventh is a “review”. Where in all of that is a single action?

“There is one area in which the report has excelled itself, and that is consultation. The interim report published in January announced eight consultations, and this one announces 12, plus one new quango.

“That is surely government of the management consultants for the management consultants by the management consultants.”

Mr Hunt said that America, France and Japan are laying fibre optic cable to thousands of homes while Britain’s operators “have barely started to think about it.”

“Why have the French Government been able to create competition between internet service providers to lay fibre in France Telecom’s ducts while the British Government have stood by as BT makes minimal investment, protected by a monopoly over the local loop?” he asked.

“Today’s solution, according to the Government, is a broadband tax, but rather than taxing, should the Secretary of State not be seeking to stimulate investment through the regulatory structure?

“The cable revolution happened without a cable tax; the satellite revolution happened without a satellite tax.

“Everyone recognises that some public investment might be necessary to reach the more remote parts of the country, but simply slapping on an extra tax is an old-economy solution to a new-economy problem.”

Mr Hunt also questioned the government’s plans for local news services.

“Does the Secretary of State accept that the traditional model for regional news—based on the old ITV transmitter regions—has failed, and that what people really want is not regional news but local news?

“Why does Birmingham, Alabama have eight local TV stations when Birmingham in the UK, four times its size, has none?

“Why is the Secretary of State using the public’s money to prop up a failed system when people in his Exeter constituency have to watch the news from Plymouth, and people in my constituency in Surrey have to watch news from Southampton?

“In America, much smaller cities have not just one but a whole clutch of local news channels, greatly enhancing a sense of community and vibrant local democracy. None has access to a licence fee.”

Mr Hunt said that if the BBC has £100 million a year to give to other broadcasters, “should we not first consider giving it back to licence fee payers, which is what nearly three quarters of them have said that they want?”

Former Home Secretary David Blunkett said the digital highway, “as for the physical highway, people need a vehicle, they need training, and they need to know the rules of the road—and that above all, they need awareness of risk.” He called for more training and education.

Lib Dem Culture spokesman Don Foster welcomed the plans to support regional and local news.

“I have no problem with the BBC’s involvement in that, any more than with its role in helping with the roll-out of broadband, but I am deeply concerned about how that is to happen,” he said.

“The Secretary of State has avoided calling it top-slicing of the licence fee, but that is what it is. Whatever the language used, top-slicing sets a precedent that undermines the BBC’s independence.

“What guarantees can we have that in future the Government of the day, especially when they are unhappy with something that the BBC is doing, will not take money from the licence fee to fund their pet projects?”

Labour MP Dr Gavin Strang said the BBC “is a truly great British institution and achievement, funded by the licence fee” and there is “real apprehension” that the arrangement might ultimately weaken it.

Mr Bradshaw pointed to his time as a BBC journalist.

“As a former BBC employee, I agree,” he said.

“The BBC is the best broadcasting organisation in the world, and it is one of this country’s institutions, along with the national health service, of which the British people are most proud—in all surveys, whenever they are asked.

“However, I sincerely suggest to my right hon. Friend that the BBC has a far stronger argument for retaining the licence fee in the long run if it is prepared to share it with organisations and to help us address the problem, which many Members from all parts of the House have raised, about the non-viability of any plurality in local and regional news coverage without that level of support.

“If my right hon. Friend is worried about a principle being broken, he could have made that argument three years ago, when we decided to use a portion of the licence fee to help fund digital switchover.

“The BBC did not fight a battle over that; it was a very sensible thing for us to do, and Members from all parties signed up to it.

“I do not accept my right hon. Friend’s argument, but I am a great defender of the BBC.

“It is in the BBC’s interests to share some of the licence fee and to see itself as an enabler, rather than to feel that it and only it should have exclusive recourse to the licence fee.”

photo by Petr Kratochvil.

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