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Telcos hit out against plans to hike their broadband rates
Friday, 30 September 2016 23:18

Broadband providers have rallied against draft plans to hike up the cost of business rates, which will result in a "steep" increase for broadband providers laying infrastructure.

The Valuation Office Agency has today published its plans for proposed non-domestic business rates next year.

Virgin Media CEO Tom Mockridge described the increase as steep. "The Chancellor Philip Hammond is choosing to side-step responsibility for a huge increase in infrastructure taxes at the very moment after the Brexit vote the UK needs to maximise investment into its digital fibre network."

In a statement to the stock market this morning, BT said it "considers the proposed rateable values to be excessive and will challenge the VOA on its method and assumptions. BT will also be responding to the transitional relief consultation."

Under the plans, the rateable values to BT next year will be £715m in England and £28m in Wales, compared to the current rateable values of £158m and £7m, respectively.

Smaller providers also complained about the plans.

Mark Collins, co-founder and director of strategy & public affairs at CityFibre, said the VOA and ought to encourage more investment in fibre optic broadband infrastructure.

He said: "From today's announcement it is very clear the current system is broken. This issue does not affect just BT and Virgin, but all builders of communications infrastructure."

Collins added that current VOA policy taxes the fibre connections of smaller operators such as CityFibre at a considerably greater rate than BT and Virgin.

"This is a massive institutionalised distortion of competition, out of step with other Government policy and a barrier to investment in the UK's broadband infrastructure. Major reform to the business rating of broadband infrastructure is essential, and it must come quickly."

The industry body for IT TechUK also weighed in. Julian David, techUK chief exec said with these proposals "the VOA aims to increase the cost of better broadband right across the board: all providers, all technologies."

He added: “The Treasury needs to tell the VOA think again.”

The Independent Networks Co-operative Association (INCA) has previously called on the government to introduce a business rates moratorium for all providers laying new fibre for the next 10 years.

The Register has contacted the VOA for a comment. ®

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Source: http://bit.ly/2dB1WiK