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UK ISP Backlash Feared After Government Scraps Fibre Broadband Tax Review

Posted: 11th Aug, 2010 By: MarkJ
uk fibre optic broadband taxConcern is mounting tonight after it was revealed that the UK governments Minister for Communications, Culture and the Creative Industries, Ed Vaizey, had scrapped promised plans to review the notoriously unfair tax on fibre optic broadband lines (i.e. the Fibre Tax).

The Conservative Party had originally pledged to review the Valuation Office Agency's (VOA) Fibre Tax in November last year (here). The tax is seen by many smaller ISPs as a significant obstacle to rolling out superfast fibre optic broadband networks, not least because it forces them to pay considerably more than their larger counterparts (e.g. BT).

Ed Vaizey said last year:

"No-one's prepared to take responsibility for the whole picture. We see policy shared between a bewildering array of government bodies and quangos. This is something I intend to fix. No matter that the VOA claims that this is just an extension of the existing policy - it's still damaging."

However ComputerWeekly are now reporting that Vaizey has done a shock u-turn on his earlier pre-election promise, which follows an as yet unspecified but apparently "constructive" meeting with the VOA. A full statement is expected to follow.

At this stage we do not yet know the full implications of this. The government might have found an alternative method that does not require a detailed review or it may simply choose to do nothing, thus protecting a cash cow worth hundreds of millions of pounds. We can only hope that Vaizey comprehends the hugely negative impact that doing nothing could produce.

Those still confused about just how important the outcome to this could be should read our article on the subject from last month - Stealthy Fibre Optic UK Broadband Tax Change Penalises Smaller ISPs.
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