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New UK Wireless Network Tax May Hamper Internet Rollout 66

Posted by timothy
from the taxes-are-friction dept.
Mark.JUK writes "The Valuation Office Agency (VOA), which compiles and maintains business rating and council tax valuation lists for England and Wales, is reportedly getting ready to impose business rates (tax) upon UK wireless networks regardless of their status. The move has raised concern because many community driven wireless broadband (Wi-Fi , WiMAX) ISPs, which often exist in locations where the big players have failed to deliver adequate services (remote and rural areas), operate off some already very thin margins."
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New UK Wireless Network Tax May Hamper Internet Rollout

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  • The move has raised concern because many [ISPs] operate off some already very thin margins."

    The solution would be to directly tax those ISP's benefits.

    Hmmmm, I wonder if anyone thought of that.

    • The solution would be to directly tax those ISP's benefits.

      I can't parse that.

    • Re: (Score:2, Insightful)

      They already tax Small ISP's profits - but because politicians are addicted to spending like a teenager with a credit card, they want MORE money. Hence a *additional* tax lobbied just because the ISP exists (profit or no profit).

      The U.S. and EU are going to tax themselves into serfdom. It's what the Roman Empire did in the 300s and 400s.

      • by Ironsides (739422)

        The U.S. and EU are going to tax themselves into serfdom. It's what the Roman Empire did in the 300s and 400s.

        We tax people's houses. If they don't pay the tax, they lose their house. Sounds a lot like serfdom.

        • That's precisely how Rome transformed into a feudal society. The lower and middle classes, unable to pay their taxes, sold their property and themselves to wealthy landlords. Over about 200 years time the landlords became "lords" and the people living on the land became "serfs".

    • by Wowsers (1151731)

      What benefit is there in _UK_ ISP's being asked to KEEP logs of all internet sites visited, VoIP traffic, email destinations, and dates times of all of it. The costs to the providers go up, so their profits either go down or subscriber costs go up.

      It's no coincidence that the current crooked UK government New Labour hate the internet. The government controls most of the printed and TV press (and especially the BBC), but free ideas floating around the internet for anyone to click on that might mean "hey, the

  • by BadAnalogyGuy (945258) <BadAnalogyGuy@gmail.com> on Monday October 26, 2009 @08:06AM (#29870947)

    Those thin margins exist because competition is keeping the final price down. When the government comes along and imposes a tax on all the businesses, the prices rise, but those margins stay pretty steady.

    A boat floating in a harbor has some percentage of its total mass below the water. When the tide comes in, the boat rises up. When the tide goes out, the boat sinks back down. But there is no change in the amount of boat mass above and below the water! The only thing that affects whether the boat goes deeper into the water or not is if additional mass is added, removed, or a hole is punched in the bottom. Governments are well known for punching holes into the titanics of industry, though.

    • Re: (Score:2, Funny)

      by mh1997 (1065630)

      A boat floating in a harbor has some percentage of its total mass below the water. When the tide comes in, the boat rises up. When the tide goes out, the boat sinks back down. But there is no change in the amount of boat mass above and below the water! The only thing that affects whether the boat goes deeper into the water or not is if additional mass is added, removed, or a hole is punched in the bottom. Governments are well known for punching holes into the titanics of industry, though.

      No, it's more l

      • I can't believe how politicians spend money.

        If I were given control of the government budget, I could have it balanced in less than a month, and all the debt wiped-out by 2020. Yes it would require sacrifice, but laborers do that every single day when they balance their family's budgets. Why politicians don't know how to do this is a mystery.

        • Re: (Score:2, Insightful)

          by Anonymous Coward

          It's called pandering to the constituencies. Imagine how many whiny kids would get ponies, Tonka trucks and as much candy as they could eat if those same kids could vote on their favorite adults to be in charge as the parents every 3-4 years!

        • I'd contest the idea that ordinary people are that much better at managing debt than governments. Personal debt and insolvencies are running pretty high right now.

          Of course the key difference is that a labourer will usually feel the effects of his sacrifice just as much as his family. With a politician, or whoever is given the job of balancing the books, that't not necessarily so...

          • by bryan1945 (301828)

            Actually, an intelligent, reasonably educated "normal" person would be able to do a fine job in balancing a national budget, with some help of course. The problem with government spending is all of the CongressCritters and Parliament (sorry if it's not Parliament, it's been a time since I studied Britain's government structure) folks that have to approve everything. A single person with unilateral money spending discretion could make all the cuts that do not get made because the politicians are paying for

            • by Qzukk (229616)

              Actually, an intelligent, reasonably educated "normal" person would be able to do a fine job in balancing a national budget, with some help of course.

              And that caveat at the end is where these intelligent, reasonably educated "normal" people go wrong when they get to government.

              They have all the help they'll ever want, in the form of lobbyists.

    • Hey BadAnalogyGuy, you're slipping - this analogy is pretty accurate: You forgot the one time the amount of boat under the water can be effected by tide - when too much water goes out and the boat gets stuck on a sandbar.
    • by commodore64_love (1445365) on Monday October 26, 2009 @08:46AM (#29871173) Journal

      Yes BadAnalogy, but there's a difference between applying a $1,000 flat tax to a small ISP with only $10,000 in total equity, versus applying $1,000 to million-dollar Comcast. The small company can't absorb the cost and will disappear..... just the same as if you applied an additional $1,000 flat tax to an engineer like me, I could swallow it but if you do the same to a McDonalds worker, he will be forced into bankruptcy.

      • by tkrotchko (124118) on Monday October 26, 2009 @08:50AM (#29871199) Homepage

        "to million-dollar Comcast"

        Comcast is a $16 BILLION dollar company.

        • Re: (Score:1, Insightful)

          by Anonymous Coward
          He's off by several orders of magnitude there, but he's sure he could balance an entire country's budget in no time. :rollseyes:
          • by vegiVamp (518171)
            Well, give or take a few zeroes, which are worth nothing in any case. Cut the man some slack.
          • 11 years isn't "no" time. It's a whole decade. I was out-of-work in 2002 due to the dot-com crash, accumulated $30,000 in debt during that time, got a job in 2003, and wiped-out that debt before the end of the year. I would apply the same budgetary restraint to the national debt. Let's just take a quick gander: Current debt is $11 trillion, so we need approximately 1 trillion dollar surplus every year from now through 2020:

            - end all wars immediately - As Rome said to Britain in 410: "You'll have to fe

            • [edit]

              - convert Amtrak [and PBS and CPB] to...

            • by Ironsides (739422)

              - convert Medicare where only poor people get checks (i.e. not middle class people like me) - 0.1 trillion saved

              You sure that's only 0.1 Trillion? I'd also ask that for both Medicare and SS you likewise reduce the payroll taxes that go towards them.

              • Oh definitely. AFTER the debt is paid-off, then I'd cut the taxes. It doesn't make sense to cut taxes while you're still carrying 11 trillion dollars in Chinese loans, but after they're paid off, then yes reduce taxation.

                • by Ironsides (739422)
                  Well, if you're going to play it that way, it isn't 11 trillion dollars, it's much less. Social Security holds about $5 trillion, so if you're not going to cut SS taxes, it just increases the portion of the 11 trillion held by SS. Similarly, Medicare doesn't go into the general revenue fund, either. It goes straight to the medicare program. What is supposed to happen when it runs a surplus, I don't know. Neither are supposed to be use to pay down the national debt.

                  By the way, it's $800 billion of Ch
        • "to million-dollar Comcast"

          Comcast is a $16 BILLION dollar company.

          So, what you're saying is that it's a $16,000 million dollar company? :-)

        • >>>>>"million-dollar Comcast"
          >>
          >>Comcast is a $16 BILLION dollar company.

          Not in the UK. It's only a few million in equity.

    • by homer_s (799572) on Monday October 26, 2009 @09:25AM (#29871517)
      A boat floating in a harbor has some percentage of its total mass below the water. When the tide comes in, the boat rises up. When the tide goes out, the boat sinks back down. But there is no change in the amount of boat mass above and below the water! The only thing that affects whether the boat goes deeper into the water or not is if additional mass is added, removed, or a hole is punched in the bottom. Governments are well known for punching holes into the titanics of industry, though.

      If that logic is correct, there should be no problem imposing a 10,000% tax right? After all, it will be the same for all ISPs, so it will be ok.

      Hint - like all taxes, it raises the prices and some consumers will not be able/want to pay.
    • The only thing that affects whether the boat goes deeper into the water or not is if additional mass is added, removed, or a hole is punched in the bottom. Governments are well known for punching holes into the titanics of industry, though.

      And far better known for keeping said titanics afloat when they ought to sink from the consequences of rapacious mismanagement.

    • Seriously, give me a car analogy already.
    • That said, the amount of the tax passed on the consumer isn't always equal. It depends on the elasticity of the good. The less elastic entity (producer/consumer) is the one that will absorb the additional cost more. In the case of wireless internet, the consumers demand is relatively ineleastic, and they will bear a majority (but not all of) the increased cost (tax). The exact amount depends on the demand/supply curves, as well as the tax rate.

  • Yes. The best way to get out of a recession is by imposing new taxes. Well done.

    But what should I expect, you got us INTO this mess...

    • The fee to register and issue a title for the car I recently bought has doubled from the last time I bought a car.

      And the reason they've doubled is because the state has a projected revenue shortfall of $400M. Gotta make it up somewhere. I don't get to shop around and find better prices like I can for other things. Well, not in the short term anyway.

      I'm voting the bastards out. That'll fix 'em. Unfortunately most of them already will their plush pension package when they retire, which I'll pay for as I stay

      • A lot, but who will you vote for? Lib dems? Toris? who is going to do better? I'm not convinced, I reckon they're all crooked.
      • Well you could vote Labour and have more and higher taxes, or Conservative and have less services....

        This has always been the dilemma,

        either you have low taxes and poor services and have to pay for everything yourself

        or high taxes and good services

        Or in the current economic climate - high taxes and poor services no matter who you vote for

                 

  • Margins (Score:2, Informative)

    by mistralol (987952)
    In fact in the UK i worked out that my current isp's margins are so tight i actually cost them around £50 / month for my connection that i pay £30/month for. It also explains why the "up to 24mbit" gets the best speed of 2mbit in eveningings and 1mbit all weekends. It also gets so bad on sunday afternoons the max speed i can sometimes get is around 0.2mbit which is only double isdn speeds. The UK really needs to sort its self out when it comes to telecomes. The goverment putting more tax's o
    • by smoker2 (750216)
      Of course you are ignoring the fact that everybody and all their kids are using the net at weekends and evenings. Of course it will slow down. It is not an unlimited internet. I have an up to 24 mbit connection and I can only ever get up to 11 mbit because of the distance from the exchange. However, I can still download from certain sites at over 1 MBps, even at the weekend or in the evening. So I'm maxing out my connection while you're struggling. Maybe you're visiting the sites at the same time as 20 mill
      • by mistralol (987952)
        Unfortunatly i was not ignoring the facts. The bottom line fact her is they advertise something for up to 24mbit. Then never provide more than 2mbit during any waking hours. It gets so slow that the connection is unstable and wont load web pages at some stages during the weekend. They are not struggling with load froma special one off event or anything. Their network is under standard loading conditions. You did read the part about 0.2mbit? Every sunday afternoon this happens between 2pm and 6pm like c
  • by slim (1652)

    Isn't VAT the solution to this?
    A tax at the point of consumer sale. Hence if you give away the service, you don't pay the tax.

    If it's felt that broadband should raise more tax, then they could set a higher rate of VAT for such services -- although I don't see why that ought to be the case.

    • Considering we are all just about to be landed with a 50p/month 'broadband tax' (per analogue line) to fund the roll-out of faster services, this wireless tax seems all the more just like an opportunistic grab for more cash.

      Some sad individual must sit in a room all day dreaming up even more pathetic ways to tax the rest of humanity - we are already being assessed for the aesthetic view out of our Windows and how many local amenities we have nearby. Hey - I live at the end of a short section of road that le

      • by slim (1652)

        Hey - I live at the end of a short section of road that leads to a gate onto fields and our last 30m 'round the bend' doesn't even have a street light and at harvest/sowing time we have farm vehicles dropping mud all over the road so can I have a discount!?

        You qualify for a Rustic Charm Surcharge.

      • Some sad individual must sit in a room all day dreaming up even more pathetic ways to tax the rest of humanity

        Yes, and the technical term for such an individual is politician.

        we are already being assessed for the aesthetic view out of our Windows

        Since I run Linux at home, does that mean I wouldn't have to pay that tax?

        • Politicians don't dream up these crazy ideas. They leave that to their boot licking, grovelling Civil Servants. The politicians presentthem to the press most oten at weekends and watch them get shot to pieces. Those with the minimum amount of damage become Government policy.

  • by Linker3000 (626634) on Monday October 26, 2009 @09:03AM (#29871311) Journal

    Later in the original article, they call this a "Wireless Window Tax*" so the solution's simple - just switch to Linux!

    L3K

    *Yeah, yeah: http://en.wikipedia.org/wiki/Window_tax [wikipedia.org]

    • Hmm. Well, people got around Window Tax by blocking up some of their windows (this is why you see bricked-up windows on old stately homes). Maybe people will get around this by consolidating access points into one single enormous mast. We'll see the unintended consequence when Big Ben becomes the wireless antenna covering the entire Westminister area...
  • It’s amazing that government can consider taxing network connectivity. We’re constantly being told to be green and limit CO2 emissions while we roar up and down motorways on the way to work and then when a technology emerges which could limit the need for physical transport to work by enabling tele-working the government tax it. New Labour do not have a clue.
  • Thank you for your suggestions and comments, they have all been noted and will be taken into consideration.

    Sincerely,

    A. Banker

    PS a discussion tax of £100 has been sent to you

  • by Aceticon (140883) on Monday October 26, 2009 @09:51AM (#29871765)

    First let me say that I think that taxing a technology is the kind of thing that's born and implemented because of heavy lobbying by the competition (which uses a different technology) - there are zero public benefits from such a measure: it only creates artificial barriers to entry that protect the established telecoms and result in lower services and higher prices for the consumer.

    That said, here's a couple of things that those that provide Internet services over wireless can do:

    • Increase the bill by the exact amount of the tax and include a separate line in the invoice for the tax. Contact local newspapers and let them know what's happening - blame your local representative to parliament for not doing enough against this, make people really pissed-off about this: elections are coming, and if you are indeed in a rural constituency, that means that each vote is much more significant in determining who gets elected to parliament, so enough votes swayed can a change which party get's a representative into parliament. The best way to prod the politicians to move is to put their sinecures at risk.
    • If you as a provider exist because those that wanted wireless couldn't get together from the "big boys" so they got together and set something up for having Internet access, then incorporate as an Association (instead of a Limited company). Then, instead of charging for Internet access, you charge membership costs which are used to keep the association's "activities" going. This should include an amount to cover for the salary of the people that have to keep the network going. Keep in mind that associations are not for profit, so this solution is only for those wireless ISPs that were not really setup for the profit but are really just a group of people that got together to get Internet access.
    • by sconeu (64226)

      With apologies (and a thank you) to the Beatles...

      Let me tell you how it will be;
      There's one for you, nineteen for me.
      'Cause I'm the taxman,
      Yeah, I'm the taxman.

      Should five percent appear to small;
      Be thankful I don't take it all.
      'Cause I'm the taxman,
      Yeah, I'm the taxman.

    • by pete6677 (681676)

      American phone and cable bills have numerous itemized taxes listed at the bottom of the bill. They add up to anywhere between 10% and 40% of the total bill. Somehow Americans are not outraged about this. Popular presidential candidate for the 2000 election Al Gore even proposed new tazes for utilities (in the name of helping the poor, of course) yet not only were prople not outraged, Gore even won the presidential popular vote.

      So I am sorry to say that itemizing taxes won't really accomplish anything. Sure,

  • When the economy gets bad, the government needs to the same thing that everyone else must do: cut spending and lay off workers. I know, I know, it's a hard concept to imagine: government employees and agencies having to operate like EVERY OTHER PART OF CIVIL SOCIETY! It says a lot about modern man that he will tolerate losing wages, losing his house, etc. and won't snarl at the state behaving like Eric Cartman screaming for more cheesy poofs...
  • Timmeh, you idiot! Why do you always deliberately misinterpret stories about the UK to spin them in the worst possible light? Do I detect a hint of insecurity or something?

    For everyone *with* a brain (not the /. janitors), read the article and ignore the misleading headline. What they're talking about is getting companies to pay business rates for telecommunications mast sites.

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