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back to article Darling confirms telephone line tax

Yesterday's budget confirmed Labour's intention to tax every phone line in the UK to the tune of 50 pence a month, providing funds for connecting the disconnected by 2017. The tax was widely expected, and was part of the Digital Britain proposals, but yesterday's speech confirmed that it will come in once Labour gets past the …

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Rural Area

Why the hell should people with land lines pay an extra tax so rural areas can have broadband?

I'm sorry but it's the telecoms companies that should pay for this. Not add more tax.

They asked for Government help because it isn't cost effective to put the infrastructure in place.

And what will happen if (not when) all this in place? Will they remove this "tax"?

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FAIL

What!!!

Missed this gem when I was reading about Cider and petrol going up.

Why should the country folk get subsised broadband. What about all the people in towns who cannot get decent fast broadband, and I know loads. Granted I am lucky and get a fast reliable and decent service from Virgin over cable, but I pay a decent amount for it. The laying of that cable was not subsidised by taxes.

If I am going to have to pay for fibre to Farmer Giles' house for him to check out mucky pictures of sheep, then I want bloody fibre to my door too.

Petrol is more expensive in the Sticks, as is Bread, jam and everything else if you buy it at the village shop. Are the Government going to stick 10p on a loaf of bread in Asda and Tesco, so country folk can buy theirs cheaper!!

I used to live in a village in the country (out of choice), and 90% of the people who lived there, and just about everyone I know who lives in the country does so out of choice.

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Licence fee

Once a telephone/broadband tax is established it will be able to take over from the TV (Multimedia) licence fee. TV licensing wont last for long as people watch less telly and more selected content. A broadband tax reaches right into this problem with a genuine excuse behind it. I for one am happy to pay the little extra even as a non licence payer, and even though inevitably I believe it will end up escalating to replace the TV licence.

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Coat

Hmmm..

So if I'm investing in the fibre infrastructure with all my monthly 50p's - does that not make me a shareholder too? OR am I right in thinking that we pay for it, and then the broadband companies make a huge profit.. when do I get my dividend - and will our 50p phone tax stop once the country is connected?? Doubt it.. there'll probably be continuous upgrades required..

Have the shirt off my back as well why don't you, y'bastards.

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Coat

Taters!

Right, you townie lot, we're holding yer Taters to ransom unless you give us some o that fast broadband lovin' !

You wants yer Taters, you gives us a slice of life in the fast lane, ooo'aaaar.

We'll also be takin' pot shots at you ramblin' and cyclin' types - "Get oorf my laaaand or gives me Broadband!"

Seriously tho, this is a bit pants - as a former suburbanite now renting in the countryside, those country folks as wants thier interwebs can easily afford it, but the speed is slow.

If we want fast broadband in the countryside, we should have to pay for the infrastructure - why should city dwellers have to pay for it?

Unless, of course, the government is determined to get the countrys pikeys online - however, they'd first need to teach them to read... er, and wash... and stop nicking...

... I'll get my coat... (mines the Barbour, next to the green wellies)

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Not me!

I cancelled my landline the second this was proposed, haven' t missed it one bit either.

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Badgers

Information Highway

I don't think too many people would object to the principle of a temporary tax to pay for the roll out of fibre - but people need to see firm commitments to abolish the tax once the stated goal is acheived (without mission-creep).

As it stands it looks very much like the thin edge of a 'road fund' style tax, which even if well-meant to start with will probably end up the same way - the amount taken creeping up and up but the money diverted further and further away from the originally intended goals.

One can almost hear the $$$ go ker-ching in the minds of the tax collectors when they finally realised how they could tax the "information highway" - just think of fibre as roads and information as cars. Just get ready for the hike in 'petrol' tax...

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Probably a good thing

While, in general, I'm not opposed to country folk getting access to the internet, and a tax such as this is probably the most sensible way to pay for it, that kind of only makes sense if the network is under public ownership. Otherwise the government is forcing phone companies to raise extra tax from their customers to then pay for a brand new network to be handed over to their rival, BT.

Perhaps a better way would be for the government to say to BT and the other companies "sort this out yourself, build a national network with 99.9% broadband access by 2014 or we'll take control."

But then, in 20 years time we'll probably see some kind of digital Beeching Report, determining that broadband lines to the far flung places aren't worth the expense of keeping them running.

Anyway, technically isn't the answer 3G/WiMax? Couldn't the whole thing be done relatively cheaply?

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Wasn't this what wimax was meant to solve?

I never got my head around what exactly Wimax was for, but I thought it was to allow remote places to connect without laying loads of fiber. I will happily be corrected on this one.

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FAIL

Public funded

Public funded means this infrastructure should be owned by the public and open to all ISP's. Why should we pay a tax in order for a private company to make a profit?

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Anonymous Coward

Lots of 50ps

Lots of 50ps will be needed to pay the rateable value to light the fibres that will be needed to provide faster connections...

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used to feed meter?

Electric or gas, your choice

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Pint

Charge per MB used

If the ISPs charged a fair price per MB used, they'd be wanting everyone to use as much as possible, and to do that, they'll be investing in infrastructure, town, country wherever.

And scrap the fibre tax where they pay per metre of fibre laid down.

That doesn't help fibre get out to the sticks...

Sent from my Black-beery (can we have a guinness icon?)

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Unhappy

History Lesson

If you think this is to pay for rural broadband, you're nuts.

1. It is a fundamental principal of British taxation, that everything goes into one pot. If Road Fund Tax funded roads, they'd be paved with gold.

2. History shows that taxes are usually introduced as "special measures" to fix a specific problem. The rate is then hiked each year, while the problem is forgotten. If I remember my history (never my best subject) Income Tax was introduced at 6 (old) pence in the pound for only the very wealthy, to fund World War 1. The rest is history.

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1799

http://www.hmrc.gov.uk/history/taxhis1.htm

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close, but...

Income tax was introduced to fund the Napoleonic War in 1799, paid by anyone with income over 60 GBP per year. It was switched on and off again over the years but has been permanent since 1842. 1s3d in the pound by 1882, by the time of the First World War it had gone up to 3s in the pound (15%!) on the first 225quid (after allowances), 6s over that. They thought they were getting screwed then, lucky sods had no broadband to worry about...

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General Taxation

Doesn't practically everyone have a landline - even if they don't use it for voice? Surely this should be added on to general taxation - then those on silly salaries (ie, the bankers that the gvnmnt bailed out) get to pay a bit more, and those of us earning peanuts don't have our nuts squeezed, so to speak.

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@History 12:48 "I'm all right jack"

I think you're the one needing a history lesson.

Market-led electricity struggled to even agree whether to use AC or DC, let alone the voltage or the shape of a plug. The concept of a "national grid" power backbone could never have been brought about by market forces. Just look at the appalling mess the UK electricity supply is in these days as a prime example of what happens if you leave it to the market.

Telephones started as local private companies but duly became a nationalised outfit, with a "universal service obligation". The LLU broadband outfits in their cherry-picked areas with their race for the gutter in service quality show you exactly what happens to broadband provision if you leave it to the markets and don't have a USO.

In your own personal case, you have reliable mains electricity not just because you paid for the "last mile", but because public money paid for the construction of the National Grid. In the next five or ten years your electricity (and most people's gas) will get less and less reliable as demand exceeds supply and as people stop selling natural gas to the UK. We got here because market forces have been allowed to run rampant, to the detriment of the infrastructure and the public. Five years from now, you will be glad that you have your own local supplies of water, and your own local store of gas.

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Anonymous Coward

Market forces

I have to disagree. Market forces can work very well, look at GSM, 3G, etc.

Electricty companies may have struggled to define standards for electricity, but that was as much by design as anything. Why would one company standardise on something that allowed their customers to change to an alternative supplier? Does "Microsoft" ring any bells? Without those market forces the development of *any* infrastructure would have taken far longer.

"So, Mr Faraday, you call it a generator? What does it do again? Ah, well, there's no demand for electricity in such quantity, people are perfectly happy with their gas lighting, and I'm sure the maids do an excellent job with the washboard. I don't see any point in government investing in that, hahaha. Maybe the defence ministry would be interested, or perhaps the circus?"

As for rampant market forces, at least part of the problem is the creation of artificial competition rules to try to create a single system without allowing a monopoly. That's not market forces, that's meddling incompetent bureaucrats.

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FAIL

So BT's power is all for the good then

>>Telephones started as local private companies but duly became a nationalised outfit, with a "universal service obligation".

And this was good how exactly?

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Grenade

well...

... this can only go well

Also I demand that cow owners be charged 50 per beast to fund my fridge

wire me the cash ... oh .... lulz

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Alien

Why

should anyone be expected to pay to compensate BT for their failure to serve customers?

If taxpayers fund national telecom infrastructure projects, that infrastructure is public property. I don't see a big problem with the state investing in the county's infrastructure, but if so, BT (and other competitor telcos) can buy or rent that infrastructure from the state.

On the other hand, I do see an enormous problem with a shameless tax funded bailout to rescue a failing private sector telco and its failing CEO.

The Broadband Stakeholder Group (reported in The Telecom and Times) estimated that it would cost £1.5Bn to bring fibre close to just 40% of homes in the UK by 2012. And £5Bn to provide fibre to *all* UK street cabinets. Or £29Bn to connect *all* UK homes with fibre.

So, back of the fag packet calc... 50p month per landline would take around a decade to bring fibre close to 40% of homes. fifty years to bring fibre broadband to all street cabinets, and two and a half centuries to provide fiber to every home.

The numbers really don't add up.

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titles and spectrecles

Aye, I don't think this tax will go away either when its initial goal has been achieved.

How about we stop adding and upping taxes all over the place and look at some good old fashioned ROI examinations on various governmental activities and departments.

Pretty sure we could pay for this without increasing the amount we have to pay if we stopped going to other countries and killing their inhabitants at the behest of the US and our own businesses desires.

The way things are going, I wouldn't be surprised if the UK descends into a mass of rioting and civil unrest - once we've exhausted every avenue of written bitching ;)

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I reckon Labour are just making sure they don't win

BT have been making money hand over fist for the same old bit of rope that was stolen from the tax payer.

After the PHORM fiasco BT should be made to provide this service at their own cost, they are still laying copper now just because no one has forced them to do otherwise.

Provide a proper service or we take the network back and do it ourselves, then I would't mind paying a tax, atleast it would be spent on the network rather than rewarding the fools who managed to milk a cash cow dry.

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FAIL

Eh?

I don't understand. A tax levied on lines which is then given to a private company to do something other than line the pockets of its shareholders...pull the other one.

I would have prefered a rise in income tax and a fair process to find the cheapest service provider...not that god awful company which thankfully I now have absolutely nothing to do with.

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WTF?

Location location

Ok so some yokel/rich twat CHOOSES to live in the sticks. So I (urban dweller) have to subsidise his/her Internet connection?

Bloody hell do they want us to come and drop off their shopping as well??

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Stop

well.

I still live quite close to the village I was born in. My best friend (since age 4) does, too. I work in IT, he's a farm worker.

He doesn't have broadband, or an email address or anything. I do (at about 1Mb/s). No problem, you might think - he's a farm worker, he doesn't need it. And I'd agree.

But then again, he has two children at primary school, both of which are already being told to find resources online and look stuff up on the Internet. If they lived in a town, they could go to the local library. But there isn't one here. If they lived in a town, broadband would be about 1/3 of the price I pay which is considerably more than his £235/week will cover. But they don't. Because if they lived ina town, then his livelihood would be unavailable and they'd all be dole scroungers.

Which do you prefer paying for?

Incidentally, he DOES have a landline. So he'll be paying the tax too.

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FAIL

A right pigs ear!

In Italy we have what I suppose is Wimax, all from €19.50 a month - http://www.ngi.it/eolo. Basically it uses masts and each mast covers a pretty big area - this map shows masts currently up and running http://www.ngi.it/eolo/bts.asp. It is not nation wide yet, but it is being done by a private company that happens to be owned by none other than BT! So if they can do it here cheaply then why can it not be done in the UK? Me thinks that the government has sold everyone down the river!

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Wireless

Would it be similar to: http://vfast.co.uk/index.php ?

I am seriously thinking of abandoning my landline, as I hardly ever use it for speech. It's only there for the internet and I can get by with my mobile phone for the few calls I make and, financially, there would be little difference. I am in the coverage area of the above, so seems like a good deal to me.

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Use your noggin

Hopefully that was just a troll.

You see, rural users have been paying the same as town-dwellers for their broadband and receiving a lesser service. IE subsidising town-dwellers getting better broadband. Now it's time the favour was returned and townies contributed to get the rural users up to speed, see?

Simples

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FAIL

13 years and they still come up with new stealth taxes

Tax is tax, hypothecation is bollocks. So it is just a new tax which we will be paying forever and is as unwelcome as any other tax.

FuLab (and the dickhead Tories) wanting to piss away our money because they think people who can't simultaneously stream 7 1080p HD videos on their net connection are socially excluded is an entirely separate FAIL.

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Pint

Confusion unbounded

Malcolm Corbett has *nothing* to do with the announcement of the phone tax, so his comments about fibre to the home are just that. Comment on the main story by an interested party. While he makes good points about providing real competition for the 'last-mile' (or five) to BT, he is really completely detached from the real world. We really cannot afford a complete new infrastructure for the countryside.

What many people commenting here do not understand is that it is not just people living in the middle of Dartmoor who cannot get broadband, but people who live 5 miles out from a town with a local telephone exchange. Where I live in Somerset, I get ~7Mb/S, but I live about 0.75 from the exchange, as-the-crow-flies. But if you live a couple of miles out of my small town (population of around 10,000), you are lucky to get 1Mb/S, and if you are unfortunate enough to have significant runs of copper-on-a-pole (or worse, aluminium), then you are likely to get zilch, nada, nothing. We're not talking about wilderness, we're talking small towns and villages with green space between them that do not need an exchange to provide phone services.

It is too easy to complain that people should not have moved to the country, there are many, many people for whom it has been their whole life, not a lifestyle choice. Why should they make a 'lifestyle choice' just to get *ANY* internet access.

What I think that the bill aims to provide is a basic 2Mb/S service to 95% of the population. This hardly counts as a "super-fast" broadband service, and the comments about 50Mb/S for farmer Giles who just looks at sheep-porn just show how fnorking blinkered and uneducated some of you cnuts are.

Technology limitations and cost is what is preventing universal fast net access (how I hate it when 'broadband' is used inappropriately).

What should be the aim is single fibre bundle to a roadside box in the middle of a village, with copper to the house, possibly combined with the phone system to provide a DSL type connection. But even this is a major upheaval when you currently have separate metal wires from each dwelling to the nearest exchange. Whilst I abhor additional taxation, providing some financial support for rural *communities* is almost certainly a Good Thing(tm)

Reading through the BS that some people are spouting makes my blood boil. I'm off for a beer to cool down!

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What you think?

"What I think that the bill aims to provide is a basic 2Mb/S service to 95% of the population."

Darling "announced super-fast broadband for 90% of homes by 2017, funded by a £6 annual tax on landline phones"

"Some experts were surprised that the chancellor did not reiterate Gordon Brown's commitment to bring super-fast broadband to 100% of the UK by 2020".

So when they say 'super-fast' you think they meant "2Mb/s basic", and you complain about others here sprouting BS?

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i grew up in a village too...

but we cant afford to live in one now due to massive house prices.

you also seem to assume that everyone in a city gets lightning fast BB. remember that due to contention ratios in towns sometimes our BB crawls.

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Grenade

The title is required, and must contain letters and/or digits.

I don't object to the idea of universal broadband, nor do I object to paying for it. However, I don't see why the hell anyone should be paying ten bob a month to BT for this to happen. The big idea is that people with surplus capital decide to invest it in a venture the they hope will provide a return: perhaps the best example of this is the development of the railways in England. Concerned citizens get together to build a railway from A to B, form a company, subscribe capital, hire engineers and contractors, operate railway and, if they got it right, profit.

Compare and contrast that with a set up where a firm that has a labour party scrounger on the board (http://www.btplc.com/Thegroup/Ourcompany/Theboard/Non-executivedirectors/RtHonPatriciaHewittMP/index.htm) gets to cream off, what, 120 million a year (23 million households times 50p a month times 12 months in a year) for saying they might get round to doing something that will enable them to charge their customers more.

This is trick that the Tories (who I'll probably be voting for, god rot them) first pulled with the 'regulators' and the water companies. The brave risk taking capitalists are given a state sanctioned pass to gouge the customers at inflation + x%. And the greedy bastards went whining to the govt when inflation got lower than the shareholders were happy about.

The alternative model is that citizens get together, decide that something would be a public good (eg sewers, which benefit everyone who doesn't have to put up with the stink, not just the person on the pot), mandate their government to raise taxes to build and operate the facility without the need to pay off a pack of thieving scum.

Not that this bothers me, I blew british bloody telecom out years ago.

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Anonymous Coward

Not just a rural issue anyway

The "no broadband/slow broadband" is not just a rural thing anyway, all it takes is for a (sub)urban area to develop in the wrong place relative to the telephone exchange which was built a few decades previously when the developed parts where in a different locality, and you've got tens of thousands of people in an area that can't get decent DSL speeds today and probably have no prospect in the foreseeable future, courtesy of BT and VM. Well known examples would include Milton Keynes, Docklands, Basingstoke, Redditch... you probably know more.

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In a few years time...

...it will be an "internet license" or something and cost £10 or more (on top of your ISP contract). The money (like most taxes) will not be hypothecated and will simply keep MPs in champagne and fois gras.

You read it here first.

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JMB

Telephone tax

Why not tax the cable telecom companies that have cherry-picked the lucrative urban areas and never made any attempt to serve rural areas, surely they are the one who should be paying for rural areas out of their profits?

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Grenade

WTF.

Why does BT get to own the local loop?, I have said it before and I will say it again, BT needs split and a new entity created which will do local loop unbundleing, and deal with cables to homes.

That way, all the companys can happly fight tooth and nail to provide customers with the best/fastest services they can possibley manage, whilst the chap paying the bill knows that he can change companys easly, and if there is a line fault he will be dealt with well even if he is not on BT.

<Shakes fist in air>

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why us

Do you know that i feel like i am paying twice for the internet nowadays. not only have i paid the higest price for the biggest service for 15-20 yrs now i have to help people who are not that interested in the internet get online, what a farce next we will be bringing back sunlight tax oh sorry that probably comes under the carbon and c02 taxes .

getting really fed up with the uk :)

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Flame

I am a townie but when will I get a decent broadband connection!!

I live on the edge of a town in Lancashire - the BEST we can get is 1mb broadband - when will we get a decent service - never mind rural communities - thye need to finish the job in urban areas !!

My mother who live in the countryside in Durham gets 8Mb!!

Its time this useless govt. and BT stopped talking and actually DELIVERED SOMETHING!!

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Openreach excess charges

Are, frankly a farce and a joke. Not only is the consumer expected to pay for the initial installation (to the tune of thousands of pounds) but then is expected to pay upkeep and duct use charges on top before they transfer a bit of data or make a single call.

I recently had half a kilometre of 24 core fiber installed as part of a business project, crossing through private and HMG property; terminated and and costing half of what OR are asking to drop 100m of fiber into existing ducting, run along existing traywork terminate in an existing cabinet.

The schedule of works is the real eye opener; Cherry picker hire - £580, Drilled holes (2 off) £380 ea, Ductwork etc etc etc.....

If they're operating on that basis, then you'll need a lot of bloody 50p's to even start considering getting fiber to street cabinets and exchanges.

BT and Openreach have the market sewn up and make no mistake.

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Grenade

Why not force BT to fork out?

BT make massive profits at everyone's expense, fail to provide an adequate service, and yet it's the tax payers who have to find the shortfall? Whether it's a tax on the phone line or raiding the TV licence (which won't really be raided - it'll just go up to cover the "raid"), the company supposedly charged with providing national telecommunications continues to fail to do so and is supported in its failure.

(And why does everyone assume that everyone living in the country is rich? Most people were born there and are as skint as everyone else. But the poor have always been easy to ignore, haven't they?)

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Flame

BT Profits

> BT make massive profits at everyone's expense

Gawd, not this crap again.

BT are a big company, most people have no clue how big, especially now it's fragmented into lots of business units. Big companies make big *OPERATING* profits, defined as the difference between *day-to-day* costs (salaries, electicity bills, etc.) and *day-to-day* income. Now think for a moment where those profits go. Shareholders? You haven't got BT shares if you think that.

BT don't get to keep those profits. A large chunk goes straight to the treasury as tax. Most of the rest goes to invest in new equipment. My BT numbers are out of date now, but in the days when they had 5000 exchanges the life of an exchange before it became obsolete was 15-20 years. That meant replacing 250 - 300 exchanges a year *all the time*. They get to the end of the list and start again at the beginning. That is more than one per working day, and at anything from £1m up each. Doesn't take long to burn through a few £bn with bills like that to pay, and that's without all the rest of the capital expenditure.

Far too many people hear "profit" and assume it's just the fivers that end up in their back pocket. Do some business studies, for goodness' sake. Then look at the pitiful dividends that BT shareholders get (2.3 pence per share interim dividend this year) before screaming "profiteering".

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Who costed

rural installation of fibre optic cable? I strongly suspect that the figures being used bear little relation to reality. It's proved quite possible to bring electricity, water and phone connections virtually everywhere. In many areas of the countryside installations have been done using nothing more sophisticated than some variation of a mole plough -- a vastly cheaper exercise than digging up and reinstating roads and pavements. What's more, the massive installation programmes of the 1950s and earlier have almost all been re-done at some point in the last 50 years without any crippling expense. The cost per mile in the countryside is tiny fraction of the cost per mile in urban and suburban areas, and as has been pointed out, with fibre optic cable, it's the connections that really up the cost. Is it possible that the accountants have been distorting the picture more than a little and producing rather skewed figures?

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Why should the country folk get subsised broadband.

The electrification of the country seems to have worked out OK here (US & the New Deal). Why not put in broadband too? There are a lot of good people out there to include. I don't like to pay taxes for a lot of things. Better, shared infrastructure would be OK though.

>Petrol is more expensive in the Sticks,

Not in the city where I live. Gas is cheaper in the country.

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Boffin

The title is required, and must contain letters and/or digits.

Mr King wrote >Doesn't practically everyone have a landline

Not for much longer. Is that the siren call of VoIP I hear?

(Smug cabled townie here so no need for flaky ADSL. And as everyone in the house has at least 2 mobiles I can tolerate some downtime.)

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