Broadband Levy under the Scanner for Possible ‘Anti Competition’ Implications
The Digital Britain report has generated much controversy over one of its recommendations that involves the government promising 2Mb broadband throughout the country. However, this is not just for the people but to some extent by the people as well.
The recommendation states that an extra 50 pence per month (£6 per year) will be charged from all broadband subscribers in the UK to help meet the cost of investment for laying an enhanced broadband infrastructure across the nation. This infrastructure would be in line with the government’s 2Mb-broadband-for-all scheme, which is an ambitious project that would require an investment of about £200 million.
The report’s creator Lord Carter has however sounded a note of optimism by saying that any inconvenience caused from the levying of this extra charge will be counterbalanced by the fact that headline prices are likely to fall due to the competitive market scenario.
It is however not clear to the European authorities whether the fee that is being charged conforms to competition rules. The authorities consider any economic strategy that tends to cause disturbance in competition to be a matter of serious investigation, and hence are examining this issue. They also do not seem convinced that enforcing such a fee will help in meeting the objective.
It has to be seen if the government by imposing this charge causes a violation of the state aid control regulations. These regulations safeguard fair competition in the market by ensuring that government interventions do not end up distorting competition. According to a competition spokesperson, it will not be feasible to pass a judgement on the broadband levy and the implications it might have on state aid rules before the government actually implements this scheme. For information on your ISP, mobile broadband genie is a good site to look at for provider reviews and news from the likes of O2 mobile broadband and the other top internet service providers.
