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ISPA UK Regrets Governments Failure to Solve the Fibre Optic Broadband Tax

Posted: 13th Aug, 2010 By: MarkJ
ispa ukThe UK Internet Service Providers Association ( ISPA ) has slammed the governments "complete lack of understanding" after its Minister for Communications, Culture and the Creative Industries, Ed Vaizey, scrapped an earlier pledge to review the controversial tax (here) on new fibre optic lines (Fibre Tax) and introduced new guidance instead.

In place of a review the Valuation Office Agency (VOA) has instead issued new revised guidance on business rates for broadband networks (i.e. how it values fibre optic networks) and committed itself to "ensure [a] fair and accurate rating" by working with ISPs. LOL?

Ed Vaizey Statement:

"I welcome the work that VOA has been doing with industry. These new guidelines will offer much greater clarity for businesses that invest in broadband networks and give them the opportunity to feed their views to the VOA.

VOA has made it clear that they welcome evidence from the industry to enable the Agency to maintain a fair and accurate rating for this important market, which is a priority for the coalition Government.

I hope that industry will take the opportunity to study this new guidance and to engage constructively with VOA for the benefit of consumers and businesses throughout the country."

The soft solution approach, which we have yet to study in detail, has already provoked an angry reaction from ISPs.

An ISPA Spokesperson said this afternoon:

"ISPA regretfully notes the complete lack of understanding required to help the development of small scale broadband networks within the UK and is disappointed at the adoption of this short term thinking, especially when businesses are looking for help from government in attracting inward investment in infrastructure projects.

Rather than boosting small scale projects, the changes to calculations announced increase (in some cases by a factor of 10 times) the costs for a small scale community project which is in contrast to Government's previous statements on this issue.

ISPA recognises the reduction of the fibre rate for new NGA access providers to £20 per premise connected, but notes that the adopted methodology may be more expensive for FTTC networks that have already been deployed and it does not allow for models to be developed outside of those adopted by the incumbent operator.

ISPA calls for an urgent review of the new rating system and will continue to seek the active support of Government to make the case for realistic, lower rateable values to encourage investment in community, rural and alternative network investment."

We expect to see more comments on this next week, after the weekend has passed and ISPs have had the chance to view the new adjustments.
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