Convergence Conversation

Latter Day Window Tax

Back in 1696, the taxing “powers that be” had a great idea or so they thought

- everyone with any money has windows in their homes so let’s tax that glass!!

- on the surface, the idea has merit (from a tax collectors point of view anyway) in that the wealthier the property owner then the bigger the home and the more windows they will have, hence the more they will be able to afford in Windows Tax

Simple huh?

What happened in response was somewhat different if not entirely beyond prediction

People often simply bricked up their windows and decided to make do without the benefit of daylight

This created a situation whereby State, Citizen (and Glazier) were all losers – eventually the Window Tax was repealed in 1851

Fast-forward to the present day UK and we have a closely parallel problem henceforth known as the Fibre Tax, again a tax on glass, only this time the glass concerned is finer than a human hair and carries light for the purposes of people telecommunicating.

Hmm….

Stepping back and considering the logic,  for something to be property there is a clear implication that it has immediate and often exclusive value eg you can live there, it offers shelter, comfort, a place to do business from

- now that’s an important distinction too – previous to NextGenUs Open Access FttH, all fibre networks were there for business or government only,  so it is important to recognise that the FibreStream/NextGenUs approach to Open Access FttH changes these dynamics entirely as the purpose of FttH is to provide ordinary people with these same technology tools as well.

VOA may well counter the arguments outlined here by taking the line that the Fibre Tax ensures that Open Access FttH network builders/operators have every incentive to get subscriber numbers up asap.

The FibreStream riposte is that all Open Access FttH builders have quite sufficient incentives to get people online and subscribing to recover their huge capex outlay without VOA imposing a totally disproportionate (relative to revenue) handicap from the outset.

The VOA may also bring out the 3G card and might point to the “success” of the £22B auction in this regard

The counter argument is that 3G is wireless and yes it requires many masts and the CAPEX costs to deploy are dwarfed by Open Access FttH.

- it is also worth recalling that the UK 3G auction was at the height of dot com mania in 2000 and we now live in a very different and deep financial recession, which NextGenUs Open Access FttH can help significantly to pull the country out from, so long as it is not stifled by Fibre Tax at birth of course!

- what needs to be at the forefront of our thinking is that the regressive nature of Fibre Tax results right now in a reduction of revenue to VOA/Treasury because the networks aren’t getting built because communities cannot afford the Fibre Tax!

It is vital to understand a key distinction between Bricks & Mortar and NextGenUs Open Access FttH:

Conventional property has immediate value as soon as built, fibre networks only have value when they are used and what matters from a Treasury perspective is that revenues are maximised overall and that means networks being built AND USED by as many people as possible.

Fibre Tax as it stands may well lead to the ridiculous situation of removing FttH when a household ceases to be a subscriber – now that really is like bricking up the windows!!!

NTL’s serial failures pre-Virgin has taught us that the infrastructure needs to go into one area one time – revisiting the same streets and neighbourhoods repeatedly is a sure-fire recipe for bankruptcy.

Smart NextGenUs Open Access FttH means deploying fibre to every fixed location (home business school hospital etc) in a single pass.

So with Fibre Tax everyone is a loser, the economy suffers, eGovernment engagement and the opportunity to transform the productivity of govt service delivery by slashing per transaction costs via NextGenUs Open Access FttH are lost too – and Treasury/VOA get 3/5ths of f*** all

Having hopefully demolished any rationale for the Fibre Tax, how might government seek to extract value instead?

Easy!

Its called VAT and Corporation Tax – NextGenUs Open Access FttH is simply a service that people value and pay for, it is not property!

FibreStream’s NextGenUs Open Access FttH paradigm means providing and encouraging access being made available to the local community by any and as many service providers, community, private and public sectors alike on RAND (reasonable and non discriminatory) terms.

Also posted on www.fibrestream.co.uk