ISPs Respond To Government Broadband Pledge

ISPs have largely welcomed the UK government’s announcement yesterday to maximise Britain’s superfast broadband network by 2015, but criticised unbalanced tax on fibre optic lines and the low minimum download speed commitment.

According to the Internet Service Providers Association (ISPA), a vast majority of ISPs support the government’s plan to bridge the digital gap by bringing superfast broadband to rural areas and investing £830 million of public funds in the next-generation service rollout.

“ISPA would like to see any government investment used for places where it is not viable for the market to reach to ensure that no-one is excluded from superfast broadband and the opportunities it offers,” said an ISPA spokesperson.

Unfair Fibre Tax

Meanwhile, some ISPs have criticised unbalanced business rates on new fibre optic lines known as fibre tax.

Fibre tax is the application of business rates to operators’ network assets. However, the valuations of small ISPs and large operators such as BT are calculated differently.

According to the Valuation Office Agency (VOA), the BT valuation is based on an examination of its receipts and expenditures. Other operators’ rates, however, are calculated by the length of their fibres and thus run up a larger bill.

Trefor Davies, CTO of Business ISP Timico, said the government’s strategy is not “an example of innovation,” claiming BT would probably win the majority of tenders.

“It is anti-competitive and is likely to be a step backwards from the progress of recent years. FTTP and true open access are the only sensible long term solutions,” said Davies.

Low minimum download speed commitment

Besides the fibre tax issue, some ISPs also disapprove of the minimum download speed commitment of 2Mbps, given the rise of cloud computing services and richer application contents.

“As a provider of broadband to businesses, our customers will always select the fastest service they can get,” said David Palmer, Senior Product Manager at business ISP Star.

According to Palmer, no business will accept the 2Mbps option in five years time.

“40Mbps and 100Mbps broadband are now emerging and this is what the business community is already starting to request,” he added.