By: MarkJ - 20 March, 2009 (2:00 AM) - Score: 1977 - Fixed Line Broadband
The i3 Group (formerly H2O Networks) has warned that the government is in danger of creating a digital divide by dis-incentivising investment in superfast connectivity unless it reviews the issue of fibre taxation. This is because, despite offering support for future networks, they continue to tax the rateable value of the basic infrastructure:
i3 Group threatens that the impact of this tax could force them to rethink the timing of their plans to install 100Mbps fibre optic broadband services, delaying still further the UK's ability to compete on the world stage. Meanwhile rivals might be forced to rely on traditional (old) copper networks instead:
i3 Group is currently using its Fibrecity project to deploy up to 100Mbps broadband services in the Bournemouth and Dundee city areas. It is working towards achieving this by using the regions underground network of sewers to carry the cable.
Elfed Thomas, CEO and founder of i3 Group, said: "Now is not the time for the Government to impose this tax. Fibre taxation is an issue which has been around for almost a decade but never before has it been such a potentially hot topic. Its resurgence comes as the Government is expected to back recommendations for the national deployment of dark fibre - to meet the requirement for universal Internet access to at least 2Mbps broadband speeds by 2012 – in the Digital Britain report.
While not entirely mutually exclusive, the twin aims of faster connectivity – in order to support national business and educational needs – and revenue raising from fibre taxation, work in opposition to each other. The potential damage to the timely roll out of a national fibre network cannot be under estimated. Not only will it be the consumer who has to foot the bill for those companies that do install fibre, but those that don’t will be immediately disadvantaged in their markets."
While not entirely mutually exclusive, the twin aims of faster connectivity – in order to support national business and educational needs – and revenue raising from fibre taxation, work in opposition to each other. The potential damage to the timely roll out of a national fibre network cannot be under estimated. Not only will it be the consumer who has to foot the bill for those companies that do install fibre, but those that don’t will be immediately disadvantaged in their markets."
i3 Group threatens that the impact of this tax could force them to rethink the timing of their plans to install 100Mbps fibre optic broadband services, delaying still further the UK's ability to compete on the world stage. Meanwhile rivals might be forced to rely on traditional (old) copper networks instead:
Mr Thomas added: "While the imposition of a tax won’t halt the progress of fibre, I do believe it would put barriers in place for companies already struggling under the weight of the current recession. The only option open to them would be to pass on any increase in costs to their customers. Surely this is a disincentive to business at a time when the Government is trying to promote growth and development throughout the economy.
The Government has stated its commitment to improving Internet access for all and its belief that fibre provides a real opportunity for UK businesses to compete and win on the international stage, creating jobs and wealth, because of investment in its basic infrastructure. Why then would that same Government tie the hands of industry behind its back by demanding an income from the very tool it uses?"
The Government has stated its commitment to improving Internet access for all and its belief that fibre provides a real opportunity for UK businesses to compete and win on the international stage, creating jobs and wealth, because of investment in its basic infrastructure. Why then would that same Government tie the hands of industry behind its back by demanding an income from the very tool it uses?"
i3 Group is currently using its Fibrecity project to deploy up to 100Mbps broadband services in the Bournemouth and Dundee city areas. It is working towards achieving this by using the regions underground network of sewers to carry the cable.
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Comments: 4
PeterPosted: 20 March, 2009 - 10:17 AM
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This is NOT unique to fibre. Government also levies similar taxes on the rateable value of all towers, masts and roof top sites used by the mobile operators.
So it would be better for the whole industry to rise to the challenge and get a consistent tax break to deliver broadband - including fibre, mobile and also wireless companies.
MarkJPosted: 20 March, 2009 - 10:50 AM
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I agree, it makes sense to ease this tax during a period when fibre optic broadband is in its earliest stages of life in the UK.
John LyonsPosted: 20 March, 2009 - 11:53 AM
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Our calculations show that our active fibre network costs as much as £50 per subsciber per month in St Asaph which is a huge amount given that the services start at only 10Mbit.
Brian CarterPosted: 26 May, 2009 - 10:08 PM
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The damned government also levy tax on the humble little wooden shed we call a beach hut !!
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