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The government's new broadband tax could be responsible for driving innovation out of the UK, according to one internet service provider.

Elfed Thomas, Chief Executive of the i3 Group, told ISPreview that while other governments around the world are embracing next-generation access, "the UK... continues to lag behind through uncertainty".

He claims the new 50p-a-month tax in particular could create a new digital divide by removing the incentive for broadband providers to invest in super-fast connectivity.

Mr Thomas stated: "The proposed tax could result in the creation of an uncompetitive market for next generation services.

"The initiative is also likely to disincentivise companies like ours from providing an infrastructure if the tax is levied on next generation fibre-optic connections, as the cost of building networks becomes prohibitive against the yield they would provide."

The Conservative Party has vowed to scrap the controversial levy if it is elected into power at the next general election.

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