Tuesday 17 August 2010

Rateable Value - FTTC and FTTH

The Valuation Office Agency is creating complex rules for assessing the Rateable Value of datacom links to the home and businesses. The discussion at present is in relation to the Next Generation Network. Their proposals are a witches brew involving lit & unlit fibres, homes passed and homes connected, who owns the fibres and who leases them. It is a mess, but could mean £20 a year taxation on the connection.

Let me suggest a Alexandrian solution to this bureaucratic gordian knot. As a nation we are trying to encourage network suppliers to connect as many homes/businesses as possible to high speed fibre networks. Forget all of these complex rules and tax on the basis of bandwidth delivered to the home, say 20 pence a gigabyte (note the term byte). It is very fair in that is based on usage rather than potential or advertised capacity. With the current scheme a person living further away from the exchange (lower bandwidth delivered) pays the same as someone living next door to the exchange. A bandwidth usage tax would be administratively easy to calculate and to explain to consumers. It also provides an opportunity to help the less well off by exempting the first couple of gigabytes per month.

In turn the Telecommunication companies can then clearly list the tax element on their bills rather than have it buried as an overhead cost. At present the taxation rules seem to be based on potential usage/revenue. The government has to raise tax somewhere, but let's make it simple and fair.


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