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By: MarkJ - 5 December, 2011 (7:17 AM)
uk fibre optic broadband taxispa ukThe UK Internet Service Providers Association ( ISPA ) has hinted (in their latest newsletter) that the governments Valuation Office Agency (VOA) will "shortly" release "further revised guidance" for its controversial tax on fibre optic broadband lines (Fibre Tax), which could potentially lead to lower prices for smaller ISPs and fibre network developers.

Many smaller ISPs repeatedly claim that the "Fibre Tax" on new fibre optic broadband lines, which taxes the rateable value of the basic infrastructure, results in them having to pay more to lay new cable than the bigger operators (e.g. BT and Virgin Media UK).

Last year the UK government proposed new guidance to help address some of the problems, although many smaller providers felt that this failed to fix the underlying concern. Related ISPs were finally able to meet with the government earlier this year (here) but the trail has since gone cold, until now.

Latest ISPA Newsletter:

"Continuing work led by the Broadband Stakeholders Group and industry is looking at providing more evidence to the VOA and ensure the rating is still current. We expect further revised guidance shortly."

We chased up the ISPA and were instead directed towards the Broadband Stakeholders Group (BSG), a UK government advisory think-tank on broadband internet access, which has not responded to our hails.

The communications minister, Ed Vaizey, has always said that he would examine any new evidence against the tax. This process is understood to have been continuing and the indication is that it will lead to some form of change.

UPDATE 6th December 2011

The BSG has kindly got in touch to tell us a little more about what's been happening. A hypothetical evidence base for the valuation of NGA deployments (superfast fibre optic broadband lines) in "Final Third" (mostly rural) areas is now nearly complete.

This evidence base, once established, will be assessed by the VOA to help them come to a view on what the right valuation for these assets should be. The BSG is currently in the "latter stages" of work on this and expect to complete it within Q1-2012. After that it will be submitted to the VOA for examination.

The VOA is then expected to consult the industry on its findings and before any final decision is made. We'll keep you posted.
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