Telecoms tax to boost broadband

A NEW tax on home internet packages, landlines and mobile phones is being considered to help improve broadband coverage and speeds around France.

A report commissioned by the prime minister has concluded that a small levy on individual users’ bills of between €5 and €10 a year is the best option to fund the development of fibre-optic - a fast cable-based connection offering speeds of up to 200Mbps.

Eure senator Hervé Maurey, who compiled the report, said the tax could bring in about €400m a year.

Nicolas Sarkozy said earlier this year that he wanted all of France to benefit from ultra-fast broadband by 2025, and 70 per cent by 2020.

This would require an investment of about €30bn, while the government’s grand emprunt lending package only set aside €4.5bn for digital development.

Mr Maurey said the new charge was necessary because regional councils, which have been key investors in broadband development, were under budget pressure. European funding for such projects is also becoming more difficult to obtain.

Web users in France are already facing bill rises because of changes to the way “triple play” packages - which combine internet, phone and television - are taxed.

These packages will now incur VAT at the full rate of 19.6 per cent, after the government scrapped the reduced 5.5 per cent rate. Some internet service providers have said they will pass the tax rise on to customers.