Government plans to levy broadband tax could hurt SMEs

Tuesday, 23 February 2010

Government plans to issue a levy on fixed line broadband users to fund an investment in Britain’s broadband infrastructure will severely effect the small and medium-sized businesses (SMEs) which will find their ambitions severely hampered by their inability to access high-speed, low contention network services. With SMEs making up 97% of the British economy, they will play a critical part of the recovery and the lack of adequate broadband is hampering the SMEs as well as the UK.

“Access to broadband is becoming vital for the growth and survival of over four million SMEs in the UK and it is critical that the government invests in broadband infrastructure if Britain is to compete effectively in the global economy,” said Mark Seemann, Product Strategy & Development Director at Outsourcery, provider of cloud computing solutions and mobile-centric unified communications (UC). “Broadband is rapidly achieving utility status and all types of communications eg. phone systems, Unified Communications and cloud computing are becoming increasingly reliant on an already under capacity system.

"The Federation of Small Businesses has already lambasted these plans for lacking ambition, accusing government of being in a "time warp". The plan to increase broadband speeds do not go anywhere near far enough. All it does is tinker with the speed rather than solve the underlying issue, which is that the UK is building its broadband network on archaic technology. The nation's copper infrastructure desperately needs to be upgraded to fibre optic in order to satisfy businesses' requirements both now and in future.

"With copper wires, speeds will not push much past 50Mbps even with the latest broadband technology. But in reality the average sustainable speed is far lower. If the underlying infrastructure was changed to fibre optic, the speeds today could be 100Mbps per customer rising to 1Gb. This would permit the most advanced business applications, such as high definition video conferencing and streaming complex software over the internet. These can't be with low broadband speeds.

"Digital Britain is not helping SMEs get faster connectivity because many don't have the money for long distance, high-speed connections. Those SMEs that do have access to 'business grade' broadband still suffer from downtime when the service offered by network providers slows or goes offline because of traffic congestion at peak times. If the government really is serious about ensuring businesses have access to high-speed broadband, it should regulate the service, imposing hefty penalties on network providers who have frequent outages, and force them to compensate small businesses whose livelihood has suffered due to their services being offline.

"There is much talk about 'the cloud' and what it can offer businesses. I believe these headlines will fade as using 'rented' IT services such as business email and customer management tools, which include secure data storage, server management and 24/7 IT support and maintenance, simply becomes the norm. All we need now is for UK plc to get on with the job of providing the broadband infrastructure that is vital for our nation's competitiveness in an increasingly tough global market place."

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