The cross party business innovation and skills committee said yesterday the plans would tax the majority to provide super fast broadband to the few.
The £6 annual tax has been expanded from its initial focus on fixed phone lines to include fast fibre connections, meaning almost every household would be subject to it. Carphone Warehouse’s TalkTalk and Sky both branded the tax “unfair”.
Andrew Heaney, director of strategy and regulation at TalkTalk said: “I welcome the conclusions of the select committee.
“Its findings chime with what we have been saying since the tax was first mooted last summer – it is an unfair and regressive way of funding super fast broadband which would deliver less benefit than it will cost and in fact slow roll-out.”
A Sky spokesman said: “This is a question of basic fairness. A telephone licence fee will penalise the less well-off so that faster, premium-priced broadband services are available to an unknown number of people in rural areas who both want and can afford them.”
Virgin, which has already invested £13bn to roll its broadband out over 52 per cent of the country, said it could see the merit of the tax in encouraging firms to continue expanding into more rural areas but questioned its implementation. It pointed out many households have multiple lines that could result in multiple charges. It also questioned whether rolling out broadband across 100 per cent of the country is practical. BT is believed to be broadly behind the tax but told City A.M. it was “a matter for politicians.”