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UK Government Still Debating NGA Fibre Optic Broadband Taxation

Posted: 23rd Sep, 2010 By: MarkJ
cumbria_uk_broadband.jpgRory Stewart, the governments Conservative MP for Penrith (Cumbria), has revealed that the UK Treasury and the Department for Business, Innovation and Skills (BIS) are still debating how best to tackle the taxes on new Next Generation Access (NGA) fibre optic based broadband networks.

The news is surprising because, back in August 2010, the 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. He did however leave the door open for more discussion.

Sadly the Valuation Office Agency (VOA) guidance, which effectively introduced a £20 tax on all homes that receive their NGA broadband from a non-BT network, did little to address the underlying imbalance. This leads to smaller ISPs paying significantly more to lay fibre optic broadband than the bigger operators like BT and Virgin Media UK.

MP Rory Stewart told Computer Weekly today:

"What we need is an environment that facilitates and encourages people to lay fibre and connect people to the internet. Although it's government policy (to tax fibre), personally that is something with which, as somebody pushing for community access to broadband, I disagree."

A Spokesperson for the ISPA said last month:

"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."

The Broadband Delivery UK (BDUK) platform, which is a government vehicle for delivering its broadband policies, is currently examining the problem and hopes to publish a clearer plan and timetable for various legislative changes within the near future.

However we have serious doubts about whether or not this will include a more common sense approach to the ever controversial Fibre Tax. Ed Vaizey, despite appearing to have a good grasp of the problems pre-election, is unlikely to do a u-turn on the change he has already made. We can only hope that the weeks since August have proven more educational for our often technologically ignorant political leaders.
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