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VOA release revised guidelines for fibre rates; ISPA calls for urgent review
Friday 13 August 2010 16:38:28 by John Hunt

The review of fibre rates has been scrapped following revised guidelines being released by the Valuation Office Agency (VOA) on how it values fibre. The Conservative government originally put forward in their pre-election manifesto that they would hold a review to ensure that the current system which heavily favours the incumbent operator would be re-evaluated to help smaller providers.

"Following discussion with the industry, the VOA has updated its Rating Manual to incorporate revised guidance on the valuation of telecoms networks. Only two sections of the Manual are affected by this - Sections 871 and 873."

The VOA will continue to work closely with the industry and is committed to ensuring the fair and accurate rating of this emerging market.

We welcome all comments, and valuation evidence and will continue to actively engage with the industry."

Valuations Office Agency

The new changes don't alter how BT's fibre network is valued, which has been the subject of some concern amongst other network operators.

"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.

Ed Vaizey, Minister for Communications

ISPA, the trade association representing UK Internet Service Providers have released a statement in response to the VOA announcement in which they call for an urgent review of the new rating system.

"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."

ISPA statement

Comments

Posted by CARPETBURN over 6 years ago
Small business screwed again :(
Posted by Somerset over 6 years ago
Can someone post details of the rates please.
Posted by cyberdoyle over 6 years ago
here you go somerset... http://www.trefor.net/2010/02/28/2147/ more info on fibre tax.

The digital dinosaurs in government are holding back innovation. The VOA tax is a tax on seed corn. Far better to let private investors build the fibre networks and then tax the harvest...
Posted by krazykizza over 6 years ago
Monopoly companies win again it seems :(
Posted by cyberdoyle over 6 years ago
Its not just small businesses screwed, its the whole of the country. Unless there is a level playing field then private investors/communities can't lay fibre at the same price the incumbent can. The incumbent won't lay to rurals, but removing the tax would mean rurals could JFDI themselves. Once there is a bit of competition then openreach will do the job. until then we will get fobbed off with copper.
Posted by WalterWillcox over 6 years ago
@ cyberdoyle,

... with copper and aluminium alloy, together with less reliable crimps, REIN etc.
Posted by Somerset over 6 years ago
This link - http://www.voa.gov.uk/instructions/chapters/rating_manual/vol5/sect870/frame.htm

from http://5tth.blogspot.com/2009/07/proposal-to-solve-property-tax-issue.html

Seems to date from the days of early cable TV before broadband was invented.
Posted by timmay over 6 years ago
Can anyone answer? If a provider connects 150 homes with fibre lengths averaging 1KM what is the rate charged? I hope this does not mean a project that is only just getting going is cancelled.
Posted by herdwick over 6 years ago
there are two separate issues here, the value of a fibre to the home type fibre distribution network and the value of point to point fibre for backhaul etc.

The last time I read it the VOA had decided to use the same method for FTTP networks as it currently uses for Cable TV ie per premise which is the £20 quoted above would result in about £8 per year of business rates to pay. There are various reductions for small businesses, charities etc. The VOA has said it is open to alternative proposals on how to value these networks.

Posted by herdwick over 6 years ago
One number I have seen for point to point is £500 per pair per kilometre per annum for the first pair. I believe it gets smaller with distance and with number of pairs installed on the same route. So a 3km run of 4 fibres to a FTTC cab might cost £100 per year in rates, before any reductions. Say £1 per customer per year.
Posted by herdwick over 6 years ago
So the numbers are small, to be honest. If there isn't a business case to start with then adding a few quid per year is neither here nor there. Some people are over-focussed on what BT pay rather than looking at the reality of their own situation.
Posted by CARPETBURN over 6 years ago
quote".....Some people are over-focussed on what BT pay rather than looking at the reality of their own situation. "

The ISPA who know more about the internet industry than many (most) here obviously disagree.
Posted by GMAN99 over 6 years ago
How would making BT pay more help anything though? It wouldn't help the small businesses anymore than it does now and it would probably bring the FTTC/FTTP rollout to a full stop. What needs to happen is for smaller set-ups to pay the same rates as BT, not tax BT anymore.
Posted by New_Londoner over 6 years ago
"The new changes don't alter how BT's fibre network is valued, which has been the subject of some concern amongst other network operators"

I thought that Vtesse, which keeps making allegations about unfair rating treatment equating to state aid for BT, has lost its case in several UK courts now, most recently the Court of Appeal?

Not obvious what the ISPA is complaining about? Based on the quote, they have got a reduction in some charges, others have gone up. Given the opportunity, most people would choose to pay less tax, but that's hardly headline news.
Posted by New_Londoner over 6 years ago
The "Small scale broadband networks" mentioned by the ISPA sounds like a nice concept. However they often lead to small scale local monopolies with little / no choice of ISP as the costs to ISPs of providing service over large numbers of disparate networks is very high.
Posted by timmay over 6 years ago
@herdwick how does £20 = £8?

Some news [url=http://www.theregister.co.uk/2010/08/11/fibre_tax/]articles[/url] are making out that it is £3,000 per year per fibre.

I'm so confused now.
Posted by kamelion over 6 years ago
"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."

It will make them see that the fibre broadband business will not make them any money unless they are called BT

The current system is biased towards BT and is totally illegalunder the monopolies commision rules. All those fat cat tories on the board of BT have no interest in make the playing pield level for smaller, non public companies. It is a disgrace.
Posted by ElBobbo over 6 years ago
What a surprise, the government is treating BT differently to any other service provider. "This can amount to £2,000 a year for a 3.5km link" for small single fibre providers. Really? What kind of idiocy is this? The government would benefit by taxing everyone equally and taking away some of BT's gross profit (gross in the indecent sense of the word).

Posted by ElBobbo over 6 years ago
It also strikes me as remarkably convenient that 3km covers (at a guess) 95% of all telephone lines, making it even more financially crazy for another company to compete with BT at the local loop level, keeping us in the dark ages while BT cashes in on their crappy copper network for as long as possible.
Posted by New_Londoner over 6 years ago
@kamelion, @ElBobbo
Sorry to tell you that the alledged bias towards BT, which would be state aid, has already been tested in court several times and found not to be true.
Posted by Somerset over 6 years ago
Well thought out comments from kamelion and Elbobbo, or not.
Posted by cyberdoyle over 6 years ago
"Lord Justice Sedley said:-“It is now evident . . . that Vtesse has a tenable argument that, contrary to the VO's case and BT's claims, the 2008 Ofcom report shows that it is possible not only to disaggregate BT's rateable holdings but to assign a hypothetical rental value to their fibre-optic cables. If that can be done, there is arguably a gross disparity in BT's favour between the rateable value of its and Vtesse's cables."
Posted by herdwick over 6 years ago
"@herdwick how does £20 = £8? "

rates charges are a function of the rateable value. So a rateable value of £20 equates to about £8 in charged rates, before allowances etc. It varies annually and maybe also by location.
Posted by New_Londoner over 6 years ago
@cyberdoyle
Unfortunately the other two judges took a different view, as did those in lower courts, hence the case was rejected.

The EU also investigated the possible state aid, also rejecting the case - "There is no evidence that the application of a different valuation method to BT and to Kingston has resulted in an advantage to these firms in comparison with their competitors."
Posted by herdwick over 6 years ago
"Lord Justice Sedley" was presumably outvoted by two other judges - oh, you missed that bit.

Vtesse are about to run out of Courts. They won't get the BT deal under any circumstances.
Posted by New_Londoner over 6 years ago
This case is in essence about the amount of rates that Vtesse should pay. Their valuation of £11,900 contrast with the figure agreed by teh Court of Appeal of £470,000! The transcript also notes some pretty material ommissions in the information originally supplied by Vtesse to the Valuations Office.

The good news for the taxpayer is that, subject to a final appeal, Vtesse have lost some will need to pay te backdated monies owed.

Few of us like paying taxes (inc rates). however only fair that we all do.
Posted by ElBobbo over 6 years ago
From the Times article into the EU investigation:
"BT’s formula was established nine years ago in an out-of-court settlement on the basis that the company was a 'unique national institution' requiring a tailor-made rates assessment."
Yeah, unique. How are you guys so blind?

BT's network in 2006 was valued at £533m. It's now valued at £255m, yet it has grown significantly. If VOA rates were applied to BT as they are to any other supplier, the taxpayer would be better off to the tune of £1.39 billion. BILLION.

Sorry, what were you saying about fair?
Posted by herdwick over 6 years ago
There are four companies treated on a national basis, BT, C&W, Energis and Global Crossing. Another 16 companies are rated on the basis of being in a single Rating Authority (Easynet & Telewest/NTL/Virgin included.

For everyone else there is a calculation method based on an assumed valuation, which can be appealed or superseded with better data from the market if available.
Posted by herdwick over 6 years ago
BT's is done on the basis of what the spend and earn on the network - ie their network is valued based on its actual financial performance.

All of this was set up by one or more Act(s) of Parliament and one has to live within the law of the land in which one does business.

The bottom line is that FTTx costs a new operator not on a national list the relevant rates percentage of £20 per home connected of RV, or £18 per home connected if there's a BT copper loop involved.
Posted by New_Londoner over 6 years ago
@ElBobbo
Suggest your read the relevant evidence and judgments, for example:

Valuation Officer: "no useful analysis can be made of BT's agreed assessment when looking at the rental value of fibre optic networks. The networks are significantly different in scale, age and diversity. BT's assessment is clearly not a direct or even an indirect comparable and any attempt at comparison is spurious in my opinion."

contd.
Posted by New_Londoner over 6 years ago
EU - "There is no evidence that the application of a different valuation method to BT and to Kingston has resulted in an advantage to these firms in comparison with their competitors."

If you read the detail of the judgment from the Court of Appeal it woudl appear that Vtesse understated the size of its network, is hoping to avoid teh substantial, backdated, liability that several courts have deemed it to owe in unpaid rates.
Posted by CARPETBURN over 6 years ago
^^^ It says nothing of the sort and the court case/s involving Vtesse were nothing to do with their valuation and rates. It was about BTs valuation not the what Vtesse do or do not owe. What you think it says and what you think the judgement is has nothing to do with the actual case. The case was not to judge if Vtesse have unpaid fees.
Given their happy court action i hope they are reading your comments and take similar action against you for that remark about about them having things "unpaid".
Posted by New_Londoner over 6 years ago
@CB
To be clear, I have no opinion either way whether they do or do not owe unpaid rates. However, to quote directly from the court(Lord Justice Lloyd):

"Disposition

For the reasons given above, I would dismiss Vtesse's appeal and would not refer any question to the European Court of Justice. I would allow the VO's appeal, but only to the extent of ordering that (1) the list be altered by the insertion of a figure of £125,000 with effect from 27 June 2003 and ..."
cont.
Posted by New_Londoner over 6 years ago

"...2) the alteration of the list to insert the figure of £470,000 should have effect as of the day of the decision by the Valuation Tribunal on 15 October 2004. "

The detail of the judgement refers to previous information undervaluing the Vtesse network, hence the backdating in the above judgment. WOrth a read of the published judgement to see the facts of the case as presented to the judges.
Posted by New_Londoner over 6 years ago
contd.

If you read the court papers you will see that the original case was in fact about the rateable value of the Vtesse network.

The references to the BT and K Com network valuations was raised as part of the debate about how to reach a rateable value for Vtesse, but was not the main point of the case.

Hope that helps clarify things.
Posted by New_Londoner over 6 years ago
Anyone interested in the detail can see the actual findings published at:

http://www.bailii.org/ew/cases/EWCA/Civ/2010/16.html

Given clear misunderstandings by various people regarding the nature of the cases, not helped by some poor reporting in some of the press, well worth reading the actual papers if you have the time and inclination.
Posted by Somerset over 6 years ago
See here:

http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWCA/Civ/2010/16.html&query=vtesse&method=boolean

cb - nothing about what Vtesse owe?

what entries should be made in the rating valuation list for the five year period from 1 April 2000 in respect of the network
Posted by herdwick over 6 years ago
<http://www.herbertsmith.com/NR/rdonlyres/5121CDE9-06B2-4AB2-8809-C7F6BD3231DF/13899/PublicLaw21December09.html> is also an interesting view on the case.

Vtesse have been in the Courts for five years now, and in June were denied appeal to the Supreme Court.

I wonder how many notspots they could have served in that time with the money and corporate energy expended on litigation.
Posted by herdwick over 6 years ago
" the court case/s involving Vtesse were nothing to do with their valuation and rates "

ROTFL @ CB
Posted by New_Londoner over 6 years ago
@CB
To clarify what the case was about:

"Lord Justice Lloyd

This judgment is given in relation to two appeals from an order of the Lands Tribunal made on 12 February 2009, ..... It concerns the liability of Vtesse Networks Ltd, which I will call Vtesse, for National Non-Domestic Rates in respect of a fibre-optic cable network. "

Hope that clears up any confusion.
Posted by CARPETBURN over 6 years ago
Talk about panic in and trying to back peddle on what you have stated. Lets hope they read these news items.
Posted by Somerset over 6 years ago
Unpaid - as in:

http://www.herbertsmith.com/NR/rdonlyres/5121CDE9-06B2-4AB2-8809-C7F6BD3231DF/13899/PublicLaw21December09.html

Vtesse Networks (VN) sought judicial review of a decision by a district judge sitting in a magistrates' court to make liability orders against the company concerning unpaid domestic rates in respect of its fibre optic network
Posted by CARPETBURN over 6 years ago
^^^ Not what New_Londoner stated.
Posted by LCake over 6 years ago
I wonder if anyone who has commented here works for BT either directly or indirectly (eg contractor, PR company, legal company etc etc)?
Posted by herdwick over 6 years ago
you can see what the judges thought of Vtesse when they say "The principle that no one shall be allowed to gain an advantage from his own wrong"

also

"In exercise of this power, on 7 March 2006 the VO required Vtesse to supply information as to its network in Kent. Vtesse refused to comply with this requirement"

what a bunch of tools.
Posted by ElBobbo over 6 years ago
Regurgitating the utter waste of time that is the Land Tribunal decision is pointless. It's obvious that BT is being treated differently to Vtesse; while BT expands its network the VOA is conveniently reducing its value by half, and Vtesse (and the other smaller providers) are getting screwed. It's a perfect example of a double standard.

Also, it's standard to withhold payment while the amount of that payment is being contested in court...
Posted by CARPETBURN over 6 years ago
quote"I wonder if anyone who has commented here works for BT either directly or indirectly (eg contractor, PR company, legal company etc etc)?"

Most probably... There are users here which are ex-staff and shareholders that comment and visit the forums. So there probably are more here that ride the BT gravy train. Its easy to spot them, there could be a news story that BT plan to launch nukes at every country on the planet. These users would still try to spin it into a positive.
Posted by CARPETBURN over 6 years ago
quote"..It's obvious that BT is being treated differently to Vtesse; while BT expands its network the VOA is conveniently reducing its value by half, and Vtesse (and the other smaller providers) are getting screwed...
Also, it's standard to withhold payment while the amount of that payment is being contested in court..."

Indeed, small provideers punished again, typical in this country all the time the larger firms are allowed to get away with things it wont change. Oh and dont even try to explain about monies which may or may not be owned until it has been fully contested.
Posted by herdwick over 6 years ago
" It's obvious that BT is being treated differently to Vtesse;"

of course it is, the law says that is how it shall be. Large nationwide companies with complex networks are treated one way, startups with tiddly networks are treated another way.

There are 4 defined ways of valuing any business asset for rating purposes, so plenty of scope for treating companies or networks differently and all perfectly standard in the rating world.
Posted by drteeth over 6 years ago
No wonder this country is in a mess. We tax the worng things and even when we do tax the right things we over-tax them. In every country in the World where the tax rates have gone down, either more money is raised or more things get built.
Posted by ElBobbo over 6 years ago
"of course it is, the law says that is how it shall be."

herdwick: "The law" is written by greedy people, generally in the pocket of whoever's got lots of money and wishes to maintain that status quo. So what?

"Large nationwide companies with complex networks are treated one way, startups with tiddly networks are treated another way."

Congratulations, you've said all the words and yet completely failed to understand the issue. BT's network is being undervalued and undertaxed compared to other providers.
Posted by otester over 6 years ago
This country is a mess, you commoners are responsible for this, top 3 parties all work tor the elite and you keep voting them in.

I just want my own private estate with 1Gbps and then you can rot and die!
Posted by Somerset over 6 years ago
ElBobb0 - not just BT, also C&W?
Posted by GMAN99 over 6 years ago
And as I said earlier how would raising the Tax BT pays help smaller businesses? It wouldn't , if anything it would hinder and they'd pass the extra cost on to the customers.

Smaller businesses need lower rates
Posted by KarlAustin over 6 years ago
@New_Londoner - Yes, few of us like paying taxes, but most of us don't mind if it is on a level playing field. BT are adding 1000s of KM of new Fibre every month, yet they pay no more in rates for doing so. If I add a pair of fibres on a new route then I have a RV of £500/KM for that first pair, yes if I add pairs on the same route the per pair cost comes down (the overall cost rises though) - and for smaller providers they aren't likely to have lots of fibres on the same route to bring the costs down.
Posted by KarlAustin over 6 years ago
BT have an RV of about £15/KM/pair - which goes down proportionally as they add more fibre each month and as they lose customers they pay less when they "unlight" the fibre - other businesses don't get that same treatment.
Posted by Somerset over 6 years ago
So the problem is that BT, C&W and Global Crossing effective get a discount for quantity?

Ideally all would be charged at the lowest rate, which would also bring down BT's costs.
Posted by New_Londoner over 6 years ago
@KarlAustin
You may be interested in the following extract from the Court of Appeal papers, which quotes from the EU investigation:

"(174) ...According to British case-law, all telecommunications networks are valued as a whole. There are several methods for valuing such property. When all methods can be applied, they should result in the same valuation. The use of a specific valuation method depends on the circumstances of the case.

contd.
Posted by New_Londoner over 6 years ago
(175) It now appears that the VOA has applied to BT and Kingston the general rules concerning business rates as laid down in the legislation and case-law. It is clear that the valuation of BT's and Kingston's hereditaments as well as the revisions of these rateable values, are carried out on the basis of a different method than in the case of their competitors.

contd.
Posted by New_Londoner over 6 years ago
However, the Commission can conclude that there is no evidence that the use of this different method is not justified by the objective differences between those firms and their competitors and by the extent of the evidence available to the VOA.

(176) There is no evidence that the application of a different valuation method to BT and to Kingston has resulted in an advantage to these firms in comparison with their competitors.

contd.
Posted by New_Londoner over 6 years ago
In others words, there are various ways to calculate the rateable value, one was chosen that was appropriate and it has not resulted in any advantage to BT or Kingston vs their competitors.

Seems reasonable on that basis.
Posted by Legolash2o over 6 years ago
How come they can't just scrap the tax? even if its for 5-10 years?
Posted by Somerset over 6 years ago
Lego - who is 'they' and how?
Posted by KarlAustin over 6 years ago
Err... sorry, but you've got to be pretty naive to think they have not gained an advantage by paying up to 20x less rates on their fibre assets. Paying less than your competitors for anything be it staff, premises, taxes, supplies is always a competitive advantage.

cont..
Posted by KarlAustin over 6 years ago
The RV is calculated per route - so from my CO to your premises is one route, to the offices in the next street over is another route, both subject to that £500/KM RV - which BT are not subject to, so BT has equiv. of about £150/RV for a 10KM link, when I've got £5000/RV - that's one hell of an advantage and prices me out quite easily.
Posted by KarlAustin over 6 years ago
What we need is a level playing field, where everyone is charged using the same clear methodology not some arbitrarily charged with one method and others not.
Posted by otester over 6 years ago
This stupid tax needs to go along with all the others!
Posted by New_Londoner over 6 years ago
@KarlAustin
I wont pretend to be an expert in this area, just noted that the EU had concluded that "There is no evidence that the application of a different valuation method to BT and to Kingston has resulted in an advantage to these firms in comparison with their competitors."

As Otester suggests, perhaps the solution is to remove the rates altogether, although I doubt that will happen given the current state of the public purse.
Posted by cyberdoyle over 6 years ago
might be wrong, but a little bird tells me that new Londoner works for the BT legal dept. could that be true? just askin.
chris
Posted by CARPETBURN over 6 years ago
^^^ More like PR or advertising if i had to guess.
Posted by Somerset over 6 years ago
Or skilled in the art of Googling...

http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWCA/Civ/2010/16.html&query=vtesse&method=boolean
Posted by New_Londoner over 6 years ago
@Cyberdoyle
Appreciate the compliment but no connection with the BT legal dept - or any of its no doubt many legal companies.
Posted by otester over 6 years ago
@New_Londoner

Assuming the elite disappeared tomorrow and all the bad politicians were thrown out, fixing the system wouldn't be difficult.

All socialist legislature gets put where it belongs...in the bin (this includes things like VOA).

That would solve the situation.
Posted by Legolash2o over 6 years ago
@Somerset
The government/VOA, how.... well basically the end result is that no one would have to pay fibre tax.

It just needs to be scrapped completely, how much money does the government make a year from this fibre tax?
Posted by Somerset over 6 years ago
It is not clear how much money the government gets from the fibre tax, but it is said to run to hundreds of millions of pounds a year

http://www.computerweekly.com/Articles/2010/08/11/242333/Vaizey-backtracks-on-promise-to-review-fibre-tax.htm

Enough to (not) build a few new schools.
Posted by Legolash2o over 6 years ago
hundreds of millions is not that much and the tax should be scrapped. I say its not much because the "Audit Commission" quango has just been axed which has saved us £250+ million :P

To be honest i would be perfectly happy with FTTC rolled out to the whole country first and then FTTH. If its affordable i would pay £400 for BT to install a fibre cable to my house (assuming the cabinet has already been upgraded).
Posted by ElBobbo over 6 years ago
Did any of you blathering on about the Lands Tribunal Court of Appeal decision actually read what you - repeatedly - linked to?

"Vtesse's trunk network of 625 route km was a minute proportion of BT's trunk fibre optic network. The difference in scale alone prevented any meaningful comparison. A devaluation of the component parts could not be accurate"

Read: We couldn't actually charge BT anywhere near what we're charging you, because it's way too big and we can't be bothered counting up all those difficult numbers.
Posted by ElBobbo over 6 years ago
From the EU report: "In conclusion, it should be recalled that business rates are a tax on the value of the property concerned. They are not a tax on profits or revenues."

Yet our resident supreme expert Mr Herdwick says "their network is valued based on its actual financial performance."

Which one is it, Herdwick? Are you taxing them based on how well they can cook their books or how much fibre they have in the ground?
Posted by New_Londoner over 6 years ago
@ElBobbo
To be fair, the Court of Appeal document devotes approx 50 paragraphs to explaining why this is not a valid exercise, worth reading it all!

To quote the paragraph more fully that you've extracted a sentence out of context:

"BT's assessment included millions of local access copper loops, several thousand telephone exchanges, over 100,000 public telephone kiosks, hundreds of mast sites, two satellite earth stations as well as an extensive national fibre optic trunk network."

Contd.
Posted by New_Londoner over 6 years ago
"Vtesse, on the other hand, only occupied limited trunk fibres in their network; they did not have any of the other BT type of rateable network assets. Vtesse's trunk network of 625 route km was a minute proportion of BT's trunk fibre optic network. The difference in scale alone prevented any meaningful comparison. A devaluation of the component parts could not be accurate, as all parts of BT's network interacted with each other and affected the value of the whole."

Contd.
Posted by New_Londoner over 6 years ago
If you read the above in full (let alone the other approx 50 paragraphs relating to this issue) it would paint rather a different picture than the partial sentence in your post above.

Posted by New_Londoner over 6 years ago
@ElBobbo
Re your second post above on whether rates are a tax on the network or profits, the court document explains this quite clearly, again expanding on your partial quote of the EU ruling.

"According to British case-law, all telecommunications networks are valued as a whole. There are several methods for valuing such property. When all methods can be applied, they should result in the same valuation. The use of a specific valuation method depends on the circumstances of the case.

Contd.
Posted by ElBobbo over 6 years ago
Maybe you can copy paste the rest of the article in here, just in case you think it backs up whatever you've changed your argument to now.

In the mean time, they're still saying that BT's network is too big to properly tax, so they're just not going to bother.
Oh hey, that rich guy's got lots of stuff, let's not bother counting it all up!

That's a job well done.
Posted by New_Londoner over 6 years ago
"(175) It now appears that the VOA has applied to BT and Kingston the general rules concerning business rates as laid down in the legislation and case-law. It is clear that the valuation of BT's and Kingston's hereditaments as well as the revisions of these rateable values, are carried out on the basis of a different method than in the case of their competitors. "

Contd.
Posted by New_Londoner over 6 years ago
"However, the Commission can conclude that there is no evidence that the use of this different method is not justified by the objective differences between those firms and their competitors and by the extent of the evidence available to the VOA."
Posted by New_Londoner over 6 years ago
@ElBobbo
Re your final post above concerning "BT's network being too big to properly tax".

The Court of Appeal paper says no such thing - see http://www.bailii.org/ew/cases/EWCA/Civ/2010/16.html. The EU investigation certainly didn't find this, and the Court of Appeal did not find it to be relevant to the case being heard.

the actual case is not even about BT, K Comm etc, but is about an appeal by Vtesse against rates that the Valuation Officer said were owed, backdated to 2000 I think.

Contd.
Posted by ElBobbo over 6 years ago
You've copy pasted more! And yet I already answered this earlier: how do you explain how BT's network is suddenly valued at less than half of the £533m from 2006? It's now valued at £255m.

Has BT reduced their fibre network? No, I think not. I can copy and paste too: "The BT hereditament included 85.8% of the optical fibre network in the United Kingdom"
Your own post suggests just how massive BT's network is.
Posted by New_Londoner over 6 years ago

Worth reading the court findings from start to finish as much of the reporting in the press focused on the 5 paragraph minority report - presumably as reading and summarising the 122+ paragraphs of the actual verdict was too onerous.
Posted by ElBobbo over 6 years ago
Probably because the "actual verdict" was a load of crap.
Posted by New_Londoner over 6 years ago
@ElBobbo
"Has BT reduced their fibre network? No, I think not. I can copy and paste too: "The BT hereditament included 85.8% of the optical fibre network in the United Kingdom"
Your own post suggests just how massive BT's network is. "

As noted above, interesting but not relevant to the appeal being held by the court - read the court paper to see why, covered in detail in 50+ paragraphs.
Posted by New_Londoner over 6 years ago
@ElBobbo
Quote: "Probably because the "actual verdict" was a load of crxx."

I suspect LORD JUSTICE LLOYD and LORD JUSTICE SULLIVAN would not agree with your allegation, and probably have a rather better grasp of the details of the case, as well as the relevant law, that either you or I.

Just because either of us may disagree with a verdict does not make it wrong.
Posted by ElBobbo over 6 years ago
I love how you use their names in CAPS. Maybe that makes them seem more than just a bunch of guys in wigs.
From another guy in a wig, the LORD JUSTICE SEDLEY (the one third of the panel who disagreed) - and this was stated above by cyberdoyle, but you appear to have skipped over it:

Posted by Legolash2o over 6 years ago
lol, again just scrap the tax as it is the best solution! can you guys please stop quoting soo much :D

What would be a disadvantages of scrapping the tax? i think... none but yet sooo many advantages!
Posted by New_Londoner over 6 years ago
@ElBobbo
Best be careful libelling judges!

Your extract of the minority findings of Lord Justice Sedley are not supported by the other two judges, with the reasons explained in detail in the court paper, some salient points of which are detailed above.

Suggest you actually read the court papers in full as, IMHO, they give a detailed and dispassionate explanation of the reasons behind the verdict.
Posted by New_Londoner over 6 years ago
@Legolash2o
Agree with you that, if you want to incentivise investment in a particular industry, looking at tax breaks has a great deal to commend it.

Whether that will happen given state of public finances is a different matter though. :-(
Posted by Legolash2o over 6 years ago
but as i said above, they saved quite abit of money for just getting rid of 1 quango.

Do any other countries like Japan/Korea have a fibre tax?

I bet ISPs would save alot of money selling the copper too or eventually start taxing the ISPs a small amount for copper that is in use.

They could also change is so that all ISPs £5/KM/pair, then they will be more fibre which equals more money so the government would not really lose out and may even gain in the long run but this government only thinks short term. :(
Posted by New_Londoner over 6 years ago
Actually I think the Japanese and Korean governments invested significant public funds to deploy fibre. Can't see that happening here given current climate - also investment is coming for mprivate sector anyway so not clear this would be a govt. priority just now?
Posted by ElBobbo over 6 years ago
Actually, New_Londoner, if you read the decision fully you'll see that the 2008 Ofcom report was mentioned frequently as showing that valuing BT's network in the same manner as Vtesse's was feasible and yet apparently the other two Honourable Lord Justices managed to totally sideline it on a technicality - "Given the very limited extent to which Mr Partridge relied on the 2008 Ofcom Report the lack of any reference to it in the Tribunal's decision did not amount to an error of law on its part."
Posted by Legolash2o over 6 years ago
The government should invest in FTTC, which was estimated around £5.8billion, so if they set a target of 2015 then thats only £1.16billion a year which is not that much. Private companies can choose FTTH if they wish or the customer may want to pay for them to be upgraded to FTTH out of there own pocket which is more feasible because they would only have to replace the wire between the house and the cabinet. Cont...
Posted by Legolash2o over 6 years ago
They government would be able to save loads of money by moving departments online, and alot of other benefits for the government but they aint tech minded enough to understand. It would benefit the government alot and save them billions a year in the long run.
Posted by Somerset over 6 years ago
ElB - please explain 'BT are lazy liars'.
Posted by New_Londoner over 6 years ago
@ElBobbo
You forget that the EU launched a formal investigation of the way that the BT network was rated, found that "There is no evidence that the application of a different valuation method to BT and to Kingston has resulted in an advantage to these firms in comparison with their competitors."

The Appeal Court did not take the Ofcom report into account as it was not relied on significantly by either party to the appeal.
Posted by Legolash2o over 6 years ago
can we please stop going on about this court case, we will be here forever.
Posted by Somerset over 6 years ago
'I bet ISPs would save a lot of money selling the copper '

What copper do ISPs own?
Posted by New_Londoner over 6 years ago
@Legolash
"can we please stop going on about this court case, we will be here forever. "

Agreed - pointless anyway if people don't read the full document, just extract small elements out of context to "prove" a point.
Posted by ElBobbo over 6 years ago
Somer: try reading the whole sentence, or maybe even the whole post. It's tricky, but I'm sure you can do it.
Posted by Legolash2o over 6 years ago
@Somerset, i meant BT.

@New_Londoner, well they keep quoting the same paragraph over and over again :D

I just 100% think that the government should pay for just FTTC as this would definitely hit their crappy 2Mb target, save money and be good for the economy.

Posted by New_Londoner over 6 years ago
@Legolash
Fair point - but stil lproving too hard for people to read! ;-)

Anyway, IMHO fair enough to quote whole paragraph, not part of one sentence - missing start and end! May be in finest tradition of advertising in West End theatres, not helpful for understanding court papers though.
Posted by Legolash2o over 6 years ago
I agree with what DrTeeth said above. "We tax the wrong things and even when we do tax the right things we over-tax them." We have a government which is stuck in the past, we need someone in the government who actually has a clue about fibre optics, GPON, VDSL, etc.. then again we need someone in government who has a clue. :D
Posted by AndrueC over 6 years ago
@Legolash:The only ISP's that own any copper are KC and (ironically) VM.

As for 'saving the government billions' - we don't need an NGA for that. Most government services are provided via a bog-standard web site. Most such are probably accessible on dial-up with a little patience.
Posted by AndrueC over 6 years ago
(cont'd) I still fail to see the case for government intervention here. Any NGA is just going to be used to download rubbish (illegally for the most part) that will have no significant impact on the countries profitability.

Any company with a viable business case can get a decent connection. No-one has ever told me what world-shattering must-have application requires residential NGA.

It's a pipe dream that may or may not yield something valuable but right now the government has more important things to worry about.
Posted by AndrueC over 6 years ago
(cont'd) If private companies think it's worth doing then fine. Let them invest and good luck to them. But any government expenditure (be it subsidy or tax breaks) is not justifiable in the current economic climate in my opinion.
Posted by NorwichGadfly over 6 years ago
On the one hand the government says it is trying to encourage investment in broadband, on the other it imposes punitive taxes. Bonkers.
Posted by AndrueC over 6 years ago
@Norwich:There's nothing particularly bonkers about this at all. The VOA are doing what they are supposed to - assessing business assets for the purposes of collecting taxes. It's not their job to worry about broadband provision.

'The Government' is not a single homogenous entity. It's thousands of different departments with a dozen or so people giving vague direction and trying to balance large numbers of differing requirements.

It's inevitable that the desires of one department conflict with those of another. It happens in any large organisation.
Posted by cyberdoyle over 6 years ago
If government wants everyone to have access, but openreach can't afford to do it, and government can't afford to do it, then the simplest solution is to scrap the VOA rates, level the playing field and let others do it. The time for interdepartment conflict is over. Time now for joined up thinking. FTTC won't solve the USC problem for the final third. Only ftth will do that.
Posted by cyberdoyle over 6 years ago
FTTH will deliver 2meg USC. It can also deliver NGA if businesses/people want to pay for more bandwidth. It can join organisations, institutions, people to a gigabit feed without even touching t'internet. It is the single most cost effective way of stimulating innovation and reducing our carbon footprint.
Posted by Somerset over 6 years ago
cd - you do talk rubbish, you don't need a 'gigabit feed' to reduce carbon footprints.

And FTTC will give USC to most of the final third. Please tell me why it won't.
Posted by NorwichGadfly over 6 years ago
@AndrueC - we seem to be arguing at cross-purposes. I'm not really interested in whether or not the VOA is acting correctly, I just think it's worth re-thinking the whole tax regime for telcos in order to encourage investment in broadband. My local media are full of stories about people not being able to get a useable internet connection in rural areas, and various initiatives to encourage investment. If the government were serious about this, this is one area they could make a difference. After all no-one charges business rates on the highways and railways, so why on telecom lines ?
Posted by cyberdoyle over 6 years ago
I am not rising to the bait Somerset. Fibre with its gigabit capacity means that local services are at the speed of light at no charge for transit. Carbon footprints can be reduced if services can be accessed online with ease. FTTC won't happen to the final third because BT say it isn't cost effective. In the same way they haven't delivered 1st gen broadband they won't deliver next gen either. economics innit?
Posted by New_Londoner over 6 years ago
@cyberdoyle
The challenges in having "others do it" come if different people do it in different places across the country and then want to connect to a national network, have a choice of ISPs etc.

The cost of ISPs connecting to disparate networks can be high (ie uneconomic), hence the very few choices on the vast majority of local fibre networks. You end up with local monopolies at the retail level.


Contd.

Posted by New_Londoner over 6 years ago
Then there is the cost. Deployment costs of FTTH in the "uneconomic last third" will be extremely high, based on the work done by the Broadband Stakeholder Group last year. Community wireless networks proved difficult to sustain economically, FTTH is several orders of magnitude more expensive.

Finally, what about qualify of service etc? Community networks are fine in theory but I suspect many people will be aware of former customers of community networks that have taken their business elsewhere if they can find an alternative, especially business customers.
Posted by New_Londoner over 6 years ago
Not saying it can't be done, just that it is not as simple as people imagine.

NB I know your mention of "others" didn't say community networks, just using this as an example as you were not specific who these others might be, where their funding, expertise etc would come from.
Posted by cyberdoyle over 6 years ago
The BSG group use stats on fibre laying from BT et al. Their costs are really high, in three figures per metre. In real life these costs are much cheaper. In community digs they are less than a tenth of figures quoted. It is doable. The bit that isn't doable is the feed. Distance from a pop brings excessive construction charges and rental. Wifi done properly isn't cheap. Fibre is very cheap.
Posted by Legolash2o over 6 years ago
dont forget you divide the cost of the BSG analysis but how many years it will take i.e. 28.8bn / 10years is 2.88bn a year which is not that much.

BT themselves said that deploying FTTC was alot cheaper than expecting with new techniques.

But i think its a load of bollocks then they say stuff like best broadband in Europe when at this rate it still seems like its nowhere near.

Although in the current times it can't be afforded but FTTP or even national FTTC will be well worth the investment!
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