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Thursday, 5 November 2009

Special dispensation from VOA on wireless tax etc

Some people seem to have missed the point of the post about property tax on wireless. Yes, we all know that ducts, poles and masts have _always_ fallen under the property rating rules, but the point is that no wireless (wi-fi etc rather than mobile) or community network has to date been required to pay it, until now.

Yes, it was undoubtedly an oversight by VOA, and it certainly hasn't been flagged up in the last decade since community networks etc started to be deployed. Luckily, the lack of this tax has allowed 'many flowers to bloom', lessons to be learnt, awards to be won across the EU, innovation to have flourished, and standards to be set that are now expected within that sector. However, the enactment of the tax at this stage can only have negative effects on those who are most likely to deliver and receive the "Final/First Third" connectivity required.

We are about to pour a toxic solution onto our beautiful and potentially to be envied community and co-operative, open and wireless networks flowerbed. The Rochdale Pioneers, responsible for so much of the phenomenally successful global co-operative movement, would be equally as aghast at this short-term and greedy thinking from within our own shores as many of us are.

The reason why the First Third is receiving the attention it is is primarily because of the fact it is the hardest to make an economic case for and therefore the commercial operators have it last on their list to provide connectivity to. Ergo, there is much talk of the intervention required in order to ensure that it happens, sooner rather than later.

What government needs to do is to think of **ALL** the ways in which they can positively encourage that First Third to be attractive to investors and those involved in deployment. Adding additional financial burdens and further weakening the business case is not going to encourage the First Third investment and must be seen for the lunacy it is. Whilst it may well fill up the VOA (and hence Treasury coffers) with a pitiful sum of money, it will be the death knell for much that has been proven to be great over the years and has led to so much innovation in the wireless and rural broadband sectors.

So, for instance, the creation of the levy to help that investment happen ought to be part of that joined up thinking. Sadly, though, it seems the initial proposal was to tax ALL telecoms, including mobiles, and hence raise far higher revenues but this has been dumbed down to just landlines. However, all of us know that the administration of that fund and ensuring it reaches the parts other broadband operators won't, is going to cost too much of the fund and will therefore reduce the available capital to an amount that will achieve little of what is actually required.

So, to strengthen the economic case for sustainable networks in the First Third, it is imperative that all the areas where there are currently issues and hence associated costs are addressed and, where possible, removed. For instance:

*Those who are involved with planning issues need to be engaged in reducing the stresses and costs on those seeking to install ducts, poles and masts in order to deliver to the First Third. Currently, it can take months or even years to negotiate the location of a street cab, duct or mast - all of which costs money and eats into the schedule for deployment, unnecessarily.
*Those who are endeavouring to deliver open networks through co-operative or not for profit mechanisms need to be considered and encouraged through reduced financial burdens eg tax relief, special dispensation from rates etc. The long-term benefits of these approaches seem to be ignored in favour of hardnosed, greedy, commercial practises that benefit a very small minority. It needs to be the other way round.
*The property rating on both of the essential elements of FiWi Next Gen Access - Fibre and Wireless - needs to be carefully considered with a long-term view to the harm it may cause to UK PLC economy if it is applied to all ducts, poles, masts and network models at this stage.
* Aggregation of telecoms within regions for public, private and community sectors needs to be given much more thought than it has been to date. Why pay with public money to connect a school if the pupils and parents are then restricted from using the same backhaul when it is dormant? Ditto councils. Fat pipes that do nothing over weekends and after hours when the citizens the council serves could be using those very same pipes is an idiocy. And a terrible, immoral waste of public money.

Unless a lead is taken in ensuring that joined up thinking happens across all sectors involved, all departments, all agencies, all organisations, all of the COMMUNITY, we are heading for an expensive fall that will leave many in this country with substandard connectivity far into the future. This country is in more than enough financial trouble without exacerbating that further in the broadband arena.


Cybersavvy UK said...

Oh, and I use "First Third" in the same way as First Mile. Whilst to many within telecoms, it was the 'last mile', as it was the last mile in their network, from a consumer point of view, it is without doubt the first mile and first inch of OUR connection.

The First Third needs to be the rural and disconnected areas (many of which, as Point Topic showed recently, are actually in places that you would assume would be a primary target of the telcos), where attention should be given FIRST.

Cyberdoyle said...

I was gonna post a comment clarifying your 'first third' because all the powers that be call it the 'final third' but I see you already have.
I am gonna tweet this blog now and hope they see your post... it is vital we stimulate joined up thinking. It is sadly lacking at present.

MB94128 said...

The VOA needs to provide two exemption categories for the targets of a FiWi tax :
1) Non-profit organizations; and
2) Incidental / single premises wireless nodes.
The second category is for places like a tea room or coffee house that offers connectivity as an added reason to drop in. This would also cover those remote users of a tight-beam connection (since only a single premises is being served). Of course places like Starbucks with many locations would not qualify. Nor would an internet cafe that charges for computer time qualify.

A means test :
Does this connection generate revenue and if so, what kind ?

Other cabling :
Does someone like a farmer pay a tax on his power line (the copper itself) ? Or are the taxes buried inside his utility bill ?

The VOA needs to explore the possibility that the current fiber taxes may be illegal under EU law. Also, this attempted expansion of taxation could be construed as evidence of undue influence by the major players in the wireless market.