george osborne

The UK Chancellor George Osborne has formally ditched plans by the previous government to impose a £6 ($8.85) levy on all telephone connections to fund broadband roll-out across the country.

Set to raise around £175 million per annum, the idea was originally proposed in last year’s Digital Britain by Lord Carter. That money will now have to be found by the private sector bulked out with funds left over from the digital switchover element of the BBC license fee.

The budget move had been well trailed so is no surprise, but it nevertheless draws a line under the last government’s controversial broadband policy for good.

From the start, the levy idea met with opposition from various quarters, not least those who questioned whether it was fair to charge telephone users to build infrastructure that some of them would never use. Even BT had its doubts, suggesting the sums involved were not enough for even a basic 2Mbit/s broadband service to reach the stated near-100 percent population target.

Culture Secretary Jeremy Hunt has since proposed allowing companies such as BT to access gas, electricity and water pipes as a way of cutting the costs of any broadband upgrade.

Separately, Osborne announced that tax relief plans for games developers would have to be scrapped.