Rates, trials and more trials Aidan Paul, CEO Digital Dales, 26 th  February 2010 Commercial in confidence www.vtesse.com
<ul><li>Brief introduction to Vtesse </li></ul><ul><li>Rates </li></ul><ul><ul><li>Background </li></ul></ul><ul><ul><li>B...
Rates <ul><li>1601 Poor Relief Act of Elizabeth </li></ul><ul><li>R v Chelsea Waterworks (1833) 5 B & Ad 156 </li></ul><ul...
“Tone” applied to fibre
NGA <ul><li>£7.5 per home passed, just like CATV </li></ul><ul><li>But NGA is not like CATV – the architecture is complete...
Litigation <ul><li>2004 won in Valuation Tribunal on occupation </li></ul><ul><li>Lost in 2005 in Lands Tribunal on occupa...
Court of Appeal <ul><li>Lord Justice Sedley:- </li></ul><ul><li>“ It is now evident . . . that Vtesse has a tenable argume...
BIS Select Committee report <ul><li>Committee Chairman Peter Luff MP explained: </li></ul><ul><li>“ Government interventio...
BT Rateable Value (England)
BT Openreach Fibre products
BT Fibre
BT Rates <ul><li>How come BT gets a 54% discount in its Rateable Value when it has increased its fibre by 50% over the sam...
Result??? <ul><li>VOA now finds evidence that it might have got it wrong for 2005 </li></ul><ul><li>The relevant date for ...
Trials (the other ones!) <ul><li>Cornwall </li></ul><ul><ul><li>500 – 900kbps now 33Mbps – 48Mbps </li></ul></ul><ul><ul><...
An introduction to Vtesse <ul><li>Founded in 2000 </li></ul><ul><ul><li>Privately Funded, Profitable </li></ul></ul><ul><u...
Contact us www.vtesse.com [email_address] +44 (0)1992 532100
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Digital Dales Presentation2

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Vtesse CEO, Aidan Paul's fibre / business rates/ property tax presentation at the Digital Dales Colloquium Feb 26th 2010 at Timico HQ, Newark, Notts.

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Digital Dales Presentation2

  1. 1. Rates, trials and more trials Aidan Paul, CEO Digital Dales, 26 th February 2010 Commercial in confidence www.vtesse.com
  2. 2. <ul><li>Brief introduction to Vtesse </li></ul><ul><li>Rates </li></ul><ul><ul><li>Background </li></ul></ul><ul><ul><li>BT </li></ul></ul><ul><ul><li>Court Cases </li></ul></ul><ul><ul><li>What to do about it </li></ul></ul><ul><li>Trials </li></ul><ul><ul><li>Cornwall </li></ul></ul><ul><ul><li>Wiltshire – residential, business </li></ul></ul><ul><ul><li>Hertford – FTTC & WiFi </li></ul></ul>Agenda
  3. 3. Rates <ul><li>1601 Poor Relief Act of Elizabeth </li></ul><ul><li>R v Chelsea Waterworks (1833) 5 B & Ad 156 </li></ul><ul><ul><li>- Underground pipes become rateable </li></ul></ul><ul><li>Electric Telegraph Co v Overseers of Salford (1855) </li></ul><ul><ul><li>Telegraph wires and poles become rateable, even when movable </li></ul></ul><ul><li>BUT the rate in the pound then was only 6d - 2.5%, versus 45% today!!! </li></ul><ul><li>Test for rateability </li></ul><ul><ul><li>• Actual occupation </li></ul></ul><ul><ul><li>• Exclusive occupation for the particular purpose of the occupier </li></ul></ul><ul><ul><li>• Beneficial occupation – there must be an economic advantage </li></ul></ul><ul><ul><li>• The occupation must not be too transient </li></ul></ul><ul><ul><li>Laing (John) & Son V Kingswood Assessment Area Assessment Committee {1948} </li></ul></ul><ul><li>Exclusive use of fibre gets taxed! Can add 20% - 50% of cost over life of project!! </li></ul>
  4. 4. “Tone” applied to fibre
  5. 5. NGA <ul><li>£7.5 per home passed, just like CATV </li></ul><ul><li>But NGA is not like CATV – the architecture is completely different </li></ul><ul><li>If I unbundle a cabinet, how many homes have I passed? </li></ul><ul><li>How much of the fibre in, say, a GPON system is within the £7.50, and how much would be on the Tone? </li></ul><ul><li>Ongoing dialogue with BSG </li></ul><ul><li>Not sure where this will end up </li></ul><ul><li>More political pressure needed </li></ul>
  6. 6. Litigation <ul><li>2004 won in Valuation Tribunal on occupation </li></ul><ul><li>Lost in 2005 in Lands Tribunal on occupation </li></ul><ul><li>EC State Aid complaint turned down </li></ul><ul><li>Appealed to Court of Appeal – lost on occupation </li></ul><ul><li>Lands Tribunal on Valuation – lost on comparison with BT ‘networks not comparable’ </li></ul><ul><li>Further European Commission complaint re Cornwall </li></ul><ul><li>Court of Appeal 2:1 split – highly unusual to have a split decision </li></ul><ul><li>NEED SUPPORT FOR PETITION TO SUPREME COURT!!! </li></ul><ul><li>BIS Select Committee critical of rates </li></ul>
  7. 7. Court of Appeal <ul><li>Lord Justice Sedley:- </li></ul><ul><li>“ It is now evident . . . that Vtesse has a tenable argument that, contrary to the VO's case and BT's claims, the 2008 Ofcom report shows that it is possible not only to disaggregate BT's rateable holdings but to assign a hypothetical rental value to their fibre-optic cables. If that can be done, there is arguably a gross disparity in BT's favour between the rateable value of its and Vtesse's cables. </li></ul><ul><li> . . . . By contrast, the injustice of allowing the continuance of what may be a radical inequity in the rating system will go unredressed by the proposed disposal.” </li></ul>
  8. 8. BIS Select Committee report <ul><li>Committee Chairman Peter Luff MP explained: </li></ul><ul><li>“ Government intervention at this stage should concentrate on changing policies to encourage investment in the NGA market. Perhaps the best example of this is the business rating system which currently discriminates in favour of BT and against its competitors. 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.” </li></ul>
  9. 9. BT Rateable Value (England)
  10. 10. BT Openreach Fibre products
  11. 11. BT Fibre
  12. 12. BT Rates <ul><li>How come BT gets a 54% discount in its Rateable Value when it has increased its fibre by 50% over the same period?? </li></ul><ul><li>It is adding fibre at around 1 million km every 1 – 2 years – more than all other operators together!! </li></ul><ul><li>If I extended my house by 50%, would my council tax go down by 54%? </li></ul><ul><li>What is going on, and why won’t either BT or the Valuation Office Agency come clean?? </li></ul><ul><li>Has there been a side deal between BT and Government???? </li></ul><ul><li>Why has Ofcom let BT off “equivalence of inputs” for FTTx??? </li></ul>
  13. 13. Result??? <ul><li>VOA now finds evidence that it might have got it wrong for 2005 </li></ul><ul><li>The relevant date for the 2005 list (for the period 1 April 2005 to 31 March 2010) is 1 April 2003 – the Antecedent Valuation Date </li></ul><ul><li>So, how come we are 1 month away from the end of the 2005 list, and evidence from 2003 comes to light?? Where was it before? </li></ul><ul><li>Reduction from £500 per pair to £300 or maybe £275 per pair – some 40% off. </li></ul><ul><li>Political pressure works! </li></ul>
  14. 14. Trials (the other ones!) <ul><li>Cornwall </li></ul><ul><ul><li>500 – 900kbps now 33Mbps – 48Mbps </li></ul></ul><ul><ul><li>Trialists swap out WiFi and PCs for speed tests </li></ul></ul><ul><ul><li>Minor internal wiring issues </li></ul></ul><ul><li>Wiltshire </li></ul><ul><ul><li>WiMax/WLAN hybrid </li></ul></ul><ul><ul><li>BT being obstructive </li></ul></ul><ul><ul><li>150 sq km ~ 5,000 users max </li></ul></ul><ul><ul><li>Looking at FTTH! </li></ul></ul><ul><li>Hertford </li></ul><ul><ul><li>Town WiFi hotspots </li></ul></ul><ul><ul><li>Smaller PCPs in Hertingfordbury, Birch Green, Stapleford, Bramfield </li></ul></ul><ul><ul><li>Issue is excessive BT construction charges </li></ul></ul><ul><ul><ul><li>Bramfield - £66,000 !! </li></ul></ul></ul><ul><ul><ul><li>Looking at alternative backhaul solutions </li></ul></ul></ul>
  15. 15. An introduction to Vtesse <ul><li>Founded in 2000 </li></ul><ul><ul><li>Privately Funded, Profitable </li></ul></ul><ul><ul><li>Full service capability – design, build, manage, improve </li></ul></ul><ul><ul><li>Deliberately focussed and specialist </li></ul></ul><ul><li>Many blue chip and government clients </li></ul><ul><ul><li>Central Govt. Departments, Retail & Investment Banks, Insurance companies, Leading integrators and outsourcers, Mobile operators… </li></ul></ul><ul><ul><li>Long term, multi-million pound projects </li></ul></ul><ul><li>Based in Hertford </li></ul><ul><ul><li>Service and support nationwide </li></ul></ul><ul><li>Registered Communications Provider </li></ul><ul><ul><li>Code Powers </li></ul></ul><ul><ul><li>Extensive construction skills </li></ul></ul>Our company
  16. 16. Contact us www.vtesse.com [email_address] +44 (0)1992 532100

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