Following the broadband money

Rates threat scuppers wireless broadband in royal town

with 8 comments

Vfast, a wireless broadband provider, has withdrawn a proposal to supply Royal Tunbridge Wells because the Valuation Office Agency has told it such as service will attract business rates, making Vfast’s offer commercially unviable.

In a letter to Hilary Smith, the Tunbridge Wells’ economic development officer, Sean Doherty, Vfast’s strategy and business manager, said,”I am very sorry to say that we are unable to continue with the tender for Tunbridge Wells.  We had a very exiting (sic) package put together and are really keen to do this however after our meeting today with the head of the telecoms team at the VOA it means that it will not be viable for us.

“We have been told quite clearly that the Tunbridge Wells project will incur Business Rates.  The cost of this added to the cost of the franchise added to the share of revenue added to the start-up costs mean that we have regrettable (sic) decided not to proceed.”

Tunbridge Wells is not short of broadband. SamKnows says some parts can get Virgin Media and FTTC, not to mention Sky, Tiscali, TalkTalk, C&W, O2/Be and AOL.

Why does the town feel the need for a wireless option? Will BT offer the town a wireless service based on its new 2.6MHz mobile licence? If so, what business rates will BT’s new service attract?

Smith and Doherty did not respond to requests to comment. Nor did HM Revenue & Customs, which speaks for the VOA.

This is not the first time Vfast has been denied wireless business in Kent. It was gazumped by BT in Iwade when the incumbent unexpectedly offered to upgrade three of the four cabinets that serve the village for free. This let parish councillors spend £13,000 to upgrade the remaining one, rather than the £49,000 originally promised by Kent County Council for the whole village.

INCA CEO Malcolm Corbett, who attended the Vfast meeting with the VOA, described it as “exploratory”.

“The meeting was exploratory in the sense that VOA are trying to work out where FWA (fixed wireless access) providers fit in their scheme of things. If you read the VOA practice notes they either cover mobile operators where masts/towers form part of the hereditament or fixed line NGA providers charged either per user connected or under a receipts and expenditures regime. FWA doesn’t fit neatly into either category. Essentially the VOA are going to think about what it all means…”

Given that the European Commission permitted wireless access for state aided next generation projects last year, and that in February BDUK issued guidance to local authorities regarding the use of wireless, the VOA’s unsettled position is inexcusable.

Br0kenTeleph0n3 has already highlighted the double standard BDUK is applying to wireless broadband operators. BDUK asks them to meet higher performance targets than BT for NGA and to commit to a fibre to the home roll-out at some point in the future, unlike BT. Further uncertainty due to VOA prevarication begs the question, what is the game here?

Many existing wireless broadband operations are run by volunteers for their communities at cost or less, solely because it is the only way to provide a more or less acceptable and affordable broadband service in those areas. Adding a tax burden would immediately kill most of them.

The few remaining commercial wireless operators would be hard-pressed too, and likely forced to raise prices. If they went out of business, taxpayers would have to give more money to BT’s rural roll-out to resupply the service. It is unlikely that the money raised by taxing wireless access would cover the cost of rolling out FTTC to areas currently being served by wireless.

The only party that stands to benefit from a tax on wireless broadband access is BT.

Is that what this government means by a competitive market in telecommunications?


Written by Br0kenTeleph0n3

2013/04/03 at 07:53

8 Responses

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  1. Is this not an almost identical re-run of the Vtesse Networks failed attempt to gain similar fibre rating criteria to those of BT ?

    Now add the quite appalling treatment of the Vtesse Networks Ewhurst project and it does seem as if there is a concerted HMG and Public Servants’ strategy to back BT at all costs, despite their unacceptable predatory tactics only resulting in mediocre services.

    Merrow Drover

    2013/04/03 at 08:07

    • You said it.


      2013/04/03 at 08:11

    • Does anyone know how much the business rates are?


      2013/04/03 at 08:15

      • Depends on the kit. A Trafficmaster sensor on the roadside or a bridge has a rateable value of £120 – multiply that by the rates poundage of 0.458 for annual payment. For a mobile operator £4k for the plant & machinery on a rooftop site plus a rental equivalent. £2k for streetlight style pole antenna, £1500 for one inside a petrol station sign etc.

        It isn’t clear if the issue is VFast paying rates on the kit like anyone would expect to, or the VO wanting to introduce some new approach to wireless NGA – perhaps like the ~£19 per home served thing for fibre.


        2013/04/03 at 08:34

  2. Trafficmaster units attract business rates, as do all mobile network base stations including external pico cells. What’s the argument here – that VFast should be given an exemption from business rates ? or all NGA wireless ? Should EE pay business rates on LTE hardware and VFast not ?


    2013/04/03 at 08:16

    • I think someone should check out what BT pay. I think anyone providing a service in an area where incumbents won’t should be exempt from this tax.


      2013/04/03 at 12:23

      • We would need to define ‘service’. It is available anywhere, at a price…


        2013/04/03 at 13:27

      • There’s a raft of stuff on the VOA web site about how base stations on BT exchange roofs and the like are covered. This all comes over as “Alice in business land” – business rates on Plant & Machinery are not exactly breaking news. I recall a rating argument about a high voltage cable from about 1983.


        2013/04/05 at 07:58

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