Vtesse Networks CEO attacks government's stance on fibre taxes

Reveals government may give ISPs that have made a loss on their fibre exemption from tax

The government "simply doesn't care" about the controversial fibre tax, according to one CEO of an ISP who attended a meeting between communications secretary Ed Vaizey and a number of UK ISPs.

ISPs competing with BT have long argued that the fibre tax favours BT and limits the widespread rollout of next generation broadband to rural areas.

Smaller ISPs contend that the business charges payable on an optical fibre see them pay the equivalent of 20 times more for their fibre network than BT, owing to an anomaly in the way it is calculated.

Speaking to Computing, Aidan Paul, CEO of ISP Vtesse, said: "Not much progress was made at the meeting. Most of the attendees were putting their case to the government and the VOA [Valuation Office Agency – part of HMRC] about why this tax is not fair and they were basically saying they didn't care."

Vtesse Networks lost a long-running court case in 2009 against what it agued was a fibre tax setup that favoured BT. Vtesse is currently appealing the decision, which was made in BT's favour.

"We are unclear as to what is going to happen next, but the only question that needs to be asked is do Jeremy Hunt and Ed Vaizey want this fixed? It doesn't seem that way".

The only real detail to come out of the meeting, according to Paul, was that the government is considering a "receipt of expenditure method", which would see ISPs not paying tax where they have made a loss on their fibre. However, specifics of this are yet to be revealed.