By: MarkJ - 25 October, 2009 (11:00 PM)
wireless mastThe Valuation Office Agency (VOA), which compiles and maintains business rating and council tax valuation lists for England and Wales, is reportedly getting ready to impose business rates (property tax) upon wireless networks (e.g. wi-fi masts, not end-user networks). The move has raised concern because many community wireless broadband ( Wi-Fi , WiMAX ) ISPs operate off already thin margins and usually inhabit niche markets (remote and rural areas).

Those familiar with the industry will already know just how damaging the governments current tax on fibre optic networks has been, making it far more costly than it should be to deploy next generation broadband around the UK. To impose a new tax upon wireless networks could make matters worse and threaten the governments own goals of digital inclusion (Digital Britain).

The proposed move, which was first spotted by Fibrevolution, has caused anger and confusion among wireless ISPs who fear that such a tax could become a major hindrance and might even cause some operations to close. The change could even be retroactively applied back to 1st April 2005. However the VOA informs us that such reports are "wrong" because the tax itself is nothing new.

A VOA spokesman told ISPreview.co.uk:

"It is not correct to suggest a new tax is being introduced for wi-fi installations. All business property is liable for rates, which are based on rental value. Wi-fi installations are not treated any differently to any other business property.

There are currently over 31,000 mast assessments in the rating lists and valuation officers are working proactively with WiFi operators to ensure they have accurate information on all wi-fi sites. There has been no change in rating policy for wireless installations and any suggestions otherwise are wrong."

FREEDOM4, a well establish wireless ISP that makes use of the latest WiMAX and Wi-Fi technology, also appears to confirm the VOA's stance that rating of wireless installations is technically nothing new. However they remain equally scalding of the fact that such rates exist at all.

FREEDOM4's COO, Graham Currier, told ISPreview.co.uk:

"We too have seen all sorts of rumours and lots of copy talking about this but we feel a little short on established fact. For F4, this is an interesting debate but not particularly business affecting because we already incur business rates for our main radio sites and this VOA proposal is aimed at local access points.

We cannot comment on the validity of this as a tax raising mechanism as this is a matter for public policy but it does look clumsily targeted and is disincentive to small players attempting to enhance the broadband experience for particular locations. I would have thought that the objectives of Digital Britain should be consistent with related tax and rating issues.

F4 now has WiMAX; a purpose built wireless broadband data network, this technology may be better able to help communities having difficulties with current fixed and wireless players but it is also dependant on providing initial coverage."

According to the director of Fibrestream Ltd., Guy Jarvis, the issue is to some degree a matter of semantics. Jarvis informed us that what the VOA says about the Wireless Window Tax not being new is correct, but only in the sense that "it is not something that has been specifically introduced to target WiFi networks or similar."

Guy Jarvis, Director Fibrestream, told ISPreview.co.uk:

"The real issue is why these networks (or indeed NGA community FttH for that matter) should be subject to business rates at all when they are often the results of a local community being let down by the “big boys” and having to organise their own telecoms affairs in the interests of the general public good.

To be fair to VOA, they do not set taxes per se rather they are tasked by Government to work out the rateable value of assets that can then be taxed if HM Treasury chooses.

This therefore is an issue for Government to carefully consider, in the context of how much additional economic activity these networks create that then becomes taxable vs taxing the community interest at source and therefore creating the unintended consequence or blowback of stopping the innovation that generates the GVA (Gross Value Add) uplift in the first place.

From a UK PLC perspective, surely it is better to first create digital wealth for future taxation than to tax today’s digital paupers?"

Unfortunately many governments have historically made the incorrect assumption that increasing or imposing new taxes will directly result in extra revenue, yet this is often not the case. In some situations a tax can be so prohibitive to building new infrastructure that what you get back may be far less because many opportunities will go unexploited.

UK Wireless networks are fast becoming crucial for the delivery of broadband services to remote and rural locations via Wi-Fi , WiMAX and Mobile Broadband . Any tax upon these services, especially those affecting the smallest of players, should perhaps be seriously reconsidered.
Share: Slash., Stumble, Facebook, Digg, Reddit, Delicious
Option: Link | Search



Generated in 0.13901 seconds.
DB queries: 6

Copyright © 1999 to Present - ISPreview.co.uk - All Rights Reserved - Terms  ,  Privacy and Cookie Policy  ,  Links  ,  Website Rules