BSG-VOA Fibre Rates Workshop

All aboard for the joys of hereditament courtesy Alan Bradford VOA

All that is is a unit af rateing assessment, RV is the annual value of the hereditament

Valuation date – 2 years before a list goes live – 1 April 2008 for 1 April 2010 list

Rateable Occupier – seems to be the problem area – person able to occupy the hereditament – this is a matter of fact – can’t contract out of being a rate payer although you can of course contract out of paying the bill.

Main difference between central list and local list – local must be contiguous so if you have eg London and Manchester networks that are connected by your own fibre then treated as one hereditament else two separate H (Hereditament)

Control of use is rate payer definition e.g. lessee of Dark Fibre (local loop unbundling is exception here)

Rateable to Wall Socket in Domestic Premises ditto Business Premises – infrastructure beyond that point is included in assessment of eg Office Block

VOA produces the valuations and these can be challenged on evidence basis – methodology of rating, so can quantum of the valuation.

Case Law – recent challenges, EU Commission, Appeals Court has upheld

The present Fibre Tone is designed around long haul backhaul not First Mile Access

VOA is looking to Cable TV – £7.50 per homes passed, looking at a rateable value – starting point based on 38% penetration around £20 per home connected

SME treated similarly for Access purposes – point to point links treated as regular H as they are perceived to have greater value.

NGA Operators have ultimate control of RV – VOA follow what we do…

More specifics to follow.

It seems that VOA valuing BT assets is put into the too-hard basket (might take 6 months with BT cooperation to derive the actual RV of Fibre)

What does the market expect to pay? is a key VOA valuation question

Another key test is capability to be used and this has significant scope for interpretation by VOA – such action being warranted as it is recognised that rates are designed for property not telecoms and with the caveat that operators should not rock the boat…

It is recognised by VOA that rates are best suited to matured, established steady state networks and that the rapid growth (we hope!) phase of FttH deployment is not well suited to revenue and earnings (R&E) assessment, hence the analogy to cable TV for assessment purposes.

Also posted on www.fibrestream.co.uk