BT, Virgin Media and other ISPs are distinctly unimpressed by the government's fresh revelation of a major increase in the cost of business rates – an expense more than likely to be passed onto the customer, as ever.
The Valuation Office Agency's (VOA) change to business rates coming in next year will mean an increase in BT's rateable values from £158 million to £715 million in England – that's almost a fivefold hike – and in Wales it will quadruple from £7 million to £28 million.
BT called the increase 'excessive' and said it planned to challenge the move.
Other service providers – large and small – will be similarly affected, and as the Register reports, Virgin Media's chief executive Tom Mockridge called the move a "huge increase in infrastructure taxes", and noted that it was coming at completely the wrong time, because "after the Brexit vote the UK needs to maximise investment into its digital fibre network".
Of course, when ISPs have to fork out more to expand and maintain their networks, those costs are inevitably passed onto the consumer and business customers. In other words, we can expect a knock-on effect with prices for broadband and phone lines likely to increase down the line.
Unless BT and cohorts are successful in getting the government to think again, that is.
Tax on better broadband
Technology industry body techUK called the move a 'tax on better broadband'. Julian David, chief executive of the organisation, commented: "Broadband is now the most important service delivered to home or business premises and jobs and growth depend on investment to boost digital connectivity.
"Yet with these proposals, the VOA aims to increase the cost of better broadband right across the board: all providers, all technologies. Whichever superfast broadband delivery technology businesses and consumers choose to connect with – these huge business rate rises will be passed onto them."
David added that the move undermined the digital strategy the government has laid out thus far, and said that it "calls into question the potential for the UK to be a leader in 5G". He concluded: "This is little short of a connectivity tax."
Richard Hooper, chair of the Broadband Stakeholder Group, further chimed in: "This huge increase in business rates on broadband networks by the VOA … introduces instability and risk at a time that we need it least. The government needs to consider how to mitigate this impact and work to ensure that the whole of the public sector is working to encourage rather than deter investment."
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