The internet industry has rejected a proposal to replace the BBC TV licence fee with a universal £11 monthly broadband levy, warning it would increase costs for households and undermine digital infrastructure.
The Internet Services Providers' Association (ISPA), which represents the UK's broadband and internet industry, said the idea was "not the answer" during a cost of living crisis. The proposal, called a "Home Internet Levy", was floated by the think tank Social Market Foundation (SMF) as an alternative way to fund the BBC.
Industry opposition to the levy
ISPA said: "Increasing everyone's broadband bills by £11 a month to replace the TV licence fee during cost of living pressures is not the answer to how to fund the BBC."
Under the concept, households would pay an extra £11 a month on top of their existing broadband bill, around £132 a year. ISPA added: "ISPA is not in favour of such a levy, which would increase prices for consumers and affect providers' ability to finish the infrastructure rollout.
"The sector remains committed to working constructively with the Government so that everyone benefits as the country moves towards an increasingly digital future."
Funding crisis and review
The £11 suggestion is one of a number of ideas put forward as the wider conversation continues about funding the BBC in the future. Changing viewing habits and falling payment rates have created a funding crisis for the broadcaster, as viewers opt for streaming services.
The BBC's funding and governance are currently undergoing a formal review ahead of the Royal Charter renewal due to expire in December 2027.
Alternative proposals
The SMF's new report, Valuing the BBC, examines the potential consequences of withdrawing public funding from the broadcaster and proposes alternative funding models. Drawing on a survey of 2,050 adults, it recommended several options in addition to the £11 fee to replace the existing licence.
It also suggested a smaller 'News and Culture Levy' of £2.30 a month, which could be added to home internet bills, and making all adults a 'member' of the BBC, giving them greater ability to hold the organisation to account.
ISPA warned: "The proposed internet levy risks undermining this and will lead to an average increase of 35% in broadband bills which would not be used to go back into broadband networks or services."
