EU could force up broadband bills

THE COST of an all-inclusive broadband, TV and phone package could rise after the European Commission ruled that the tax charged on subscriptions in France is too low.

Brussels has criticised the French government's policy of allowing ISPs to charge VAT at a reduced rate of 5.5% on half of the bill, with the other half at the full 19.6% rate.

This tax break applies to providers offering a "triple-play" service - where web access, television channels and phone calls are included in a single package.

However the European Commission said the law only allowed lower VAT on the television part of the package, and the current French policy seemed to ignore this.

According to La Tribune, France has two months to explain its position or change its laws to conform with European rules.

The Fédération Française des Télécoms warns that a VAT rise would have to be passed on to subscribers through higher monthly bills.

Iliad, which owns Alice and Free, has already hinted at a price hike to €35 a month, from €30, by the end of this year.