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Minister Ed Vaizey to host broadband summit on fibre rates

Ian Grant

Communications minister Ed Vaizey is likely to host an industry roundtable before the end of the year to discuss the new valuation guidance on the rating of fibre optic networks.

Broadband industry stakeholders and the Valuation Office Agency (VOA) are expected to be invited.

In the meantime, fibre network operators that would like to scrap the business rates tax on lit fibre should submit their evidence for the move to the VOA, it has emerged.

The move follows Vaizey's decision, after a meeting with the VOA, to go back on an election promise to review the so-called "fibre tax". Computer Weekly has submitted a Freedom of Information request for the notes from the meeting.

An official told Vaizey that the VOA was "under a statutory duty to consider the effect of evidence put to them", adding "it would be helpful" to encourage the industry to present relevant evidence to the agency.

There was also a suggestion that Vaizey host a roundtable between key broadband stakeholders and the VOA so that the VOA's views "were better understood".

During the meeting, led by Niall Walsh for the VOA, Vaizey was updated on fibre rating and business rates in general.

He was also told that the VOA was to publish guidelines that would help potential investors assess their potential returns on fibre networks.

Eurim, a cross-industry/parliamentary body, has described the fibre tax as the biggest obstacle to investment in fibre networks.

The fibre tax could also scupper Vaizey's plans to use public sector networks to carry private traffic. Presently publicly owned and run networks are free of the fibre tax, but would become liable as soon as they resold spare capacity.

In its election manifesto, the Conservative Party vowed to review the system, which at least one Court of Appeal judge believes favours BT, the UK's biggest telco.

That view, a minority opinion, was the result of a long-running legal battle between Vtesse Networks and the VOA. Vtesse alleged that the rating scheme effectively granted illegal state aid to BT. Vtesse lost its argument in the British courts, and is still appealing a European court decision against its allegation.

Computer Weekly previously reported that differences between how BT is rated (based on receipts and expenditure) meant BT could pay the fibre tax after it had received money, whereas other telcos (except Virgin Media) were liable as soon as they lit the fibre.

In addition, non-BT and non-Virgin Media network operators pay a pro rata fee for each fibre based on the length of the fibre. The minimum valuation is £2000 for a single 1km fibre.


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