People helped off satellite broadband with a mix of incentives and tax cuts

Broadband in the UK has often been held back by a single serious issue, which is the periods that investments in many of the projects must be paid back within, with returns on initial investment required in as little as three years.

One of the key reasons for many companies not wanting to get involved in the activation of fibre optic cabling to enable both the rollout of fibre to tens of thousands of cabinets or many millions of households and reduce the cost of backhauls is the combination of the business rate tax on active UK fibre and the fact that the options offering a lower technical quality for a cheaper price are often chosen.

With the government in Kenya letting companies offset the costs that are involved in activating fibre connections coming into the country by as much as 20 years and dropping the 16 percent VAT charges levied against mobile phones it would appear that it is showing the UK how best to move ahead.

Much of the fibre optic cabling that is running throughout the country is classed as dark fibre, which means that it current doesn’t carry any kind of signal and considering that any fibre cabling that is laid must have business rates paid on it many see this as being a serious issue. The costs incurred by the tax system to activate extra cables on fibre cabling that has already been laid is much higher because rather than being single cable they are laid in multiple strands to allow for redundancy and expansion in the future.

There are a number of areas that are affected by this like an significant rise in congestion at peak time due to operators keeping the per Mbps prices high and community based project becoming unaffordable due to taxes even though they can build the infrastructure.

Although no indication has been given that the Digital Britain report will cover it, the building of a broadband fibre infrastructure would benefit greatly from the creation of a holiday period or the reduction of tax costs.

Source – www.thinkbroadband.com