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Business broadband costs questioned by government committee
Tuesday 23rd February 2010, by Daniel King
A new report by the Business, Innovation and Skills Committee into business broadband has expressed concern over the government's plan to focus on increased broadband speeds.
While the committee welcomed the move to improve the UK's digital economy, it questioned the fairness of the proposed 50p-a-month levy on fixed lines.
The group also suggested that obstacles could be put in the way of developing the broadband network because of the business broadband rating system, which committee chairman Peter Luff challenged.
He said: "We believe that the government should consider a reduction, or even a temporary removal, of business rates on fibre optic cable. This would be a more effective use of limited public sector funds than direct financial intervention."
Business broadband rates are calculated by the industry in two ways - the Receipt and Expenditure (R&E) method and the Tone List method.
BT uses the R&E method where the Valuation Office Agency assesses the hypothetical rental value of BT's network based on profits and pays tax accordingly.
Other providers use the Tone List system, which sees them pay a tax per kilometre.
The committee said that "BT does not merit a method of taxation which differs from other providers", adding that this method is favourable to BT over other broadband companies.
CMA, part of BCS, the Chartered Institute for IT, recently said improving the UK's broadband network will make the country more competitive, especially as trading online is now so important.
It called for affordable, universal, symmetrical and high-speed broadband to be provided by 2017.
Categories: Broadband
