RURAL business owners have voiced dismay after MPs criticised the government’s proposed broadband levy.

The government wants to impose a levy on landline telephones to fund faster broadband connections.

But a report by the House of Commons Business, Innovation and Skills (BIS) Select Committee described the proposal as unfair.

The report rejects the planned 50p/month levy on fixed telephone lines to pay for next generation broadband access.

It considers the levy to be a regressive tax which will place a “disproportionate cost on a majority who will not, or are unable to, reap the benefits of that charge”.

The report agrees with government's proposals for all broadband connections to deliver speeds of at least 2Mbps by 2012.

But it warns that the government has still not defined what 2Mbps will mean in practice to internet users.

The definition should be the delivery of a minimum 2Mbps, under normal circumstances, to all users at all times, says the report.

Committee chairman Peter Luff said government intervention should concentrate on changing policies to encourage investment in better broadband.

“We believe that the Government should consider a reduction, or even a temporary removal, of business rates on fibre optic cable.

“This would be a more effective use of limited public sector funds than direct financial intervention.”

The Country Land and Business Association said it was dismayed that the BIS select committee opposed a household tax.

CLA President William Worsley said it was vital that the government invested in broadband infrastructure.

Doing so would allow the roll-out of a fibre-optic network that rural business could benefit from the advantages of modern communications.

“Without direct investment, the market will not be able to provide the necessary capital injection to make superfast broadband a reality,” said Mr Worsley.

“Superfast broadband is needed for businesses which require a significant upload bandwidth, such as surveyors and architects.

“Larger businesses that rely on an integrated network also require superfast broadband, and the need for speed is equally essential to urban and rural businesses.”

Mr Worsley said he agreed with the select committee's view that the government's current broadband strategy was unclear.

The government’s pledge to ensure a minimum speed of two megabits per second (2Mbps) to all by 2012 was ambiguous, he added.

It was essential that the commitment to achieve universal broadband coverage becomes a universal service obligation.

“We must get the basics right and that means ensuring adequate and affordable broadband for all by 2012.”