One of the many interesting features of Lord Carter's report is the embryonic proposal for a new 'Next Generation Fund' to help subsidise the build out of advanced telecom infrastucture to the 'Final Third' of the UK population. This apparently would be a levy of 50p per month on all fixed lines (that is BT's, Kcom's and Virgin Media's). It would likely be introduced through primary legislation, and whether that would be communications legislation or more general legislation remains to be seen. Clearly a lot of detail needs to be worked out.However, laudable though may be the objectives for the Fund, I am set wondering about its legality and whether it would be able to satisfy EU State Aid rules and the Treaty, even perhaps the EU regulatory framework.
Why? Well, the proposed structure is very unusual: it would be levied on all fixed operators and collected from all but low income households. It would not be imposed on mobile or other wireless operators or their customers, yet mobile and other wireless operators would be eligible (presumably) to benefit from the Fund by applying for grants from the Fund to help pay for new infrastructure. Many premises have multiple lines and presumably would pay multiple levies. (Compare the TV licence regime for a moment). Legal terms like discriminatory, market distortion and objective justification spring to mind as relevant here.
I shall be pondering this further so watch this space ...
Colin just off the top of my head I'd have thought that State Aid doesn't come into it so long as any company from any country can apply for money from the Fund on an equal basis.
ReplyDeleteAs for whether this is a market distortion or discriminatory etc - you may well be right (and i think you are) than it is all of these things but as far as i understand it the government is free to impose any tax it likes in any way it likes. If they wanted to create a tax on windows or beards or chewing gum by primary legislation in order to create the Fund I can't immediately think of any legal basis to challenge them.
Mike Conradi
mike.conradi@kemplittle.com