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Government consults on new regulations to provide for business rates relief to telcos

Telecoms companies that install "new fibre" broadband networks in England will benefit from five years' worth of 100% relief from business rates under proposed new regulations published by the UK government.30 Aug 2017

The measure is designed to "incentivise and reward those operators who invest in the broadband network", and support the growth of '5G' networks, the government said in a consultation paper (10-page / 233KB PDF) on its plans.

“Given the government’s widely publicised plans to widen access to broadband access and improve its communications infrastructure so it can  ‘ensure [our] digital infrastructure supports the UK’s world-class digital economy’, this relief for  telecoms companies installing new fibre broadband networks is to be welcomed," property telecoms expert Alicia Foo of Pinsent Masons, the law firm behind, said.

"It is one step in the right direction as the government seeks to reach its 95% target for superfast broadband coverage by the end of 2017 and its additional plans to support the growth of new, ultrafast broadband networks, including 5G connectivity," she said.

Property rates expert Stuart McCann of Pinsent Masons said: "This is an entirely new relief to add to the large number of reliefs already in existence. It will, though, remove the uncertainty of the application of business rates in this area and I expect that the speed of roll-out delivery will be increased as a result."

Earlier this summer, the government introduced a new Telecommunications Infrastructure Bill before parliament to provide for the business rates relief. The Bill gives the government the power to implement the relief through new regulations.

The draft regulations the government has proposed (4-page / 143KB PDF) address eligibility for the business rates relief and contain a framework for calculating the amount of business rates relief due.

The government said that the relief would be available on new fibre broadband networks installed on or under property after 1 April 2017. Telecoms companies that made use of 'dark fibre' installed prior to this date to expand the capacity of their broadband networks would not benefit from business rates relief, it confirmed.

Dark fibre is a term used to describe the dormant, unused additional optical cables that operators often install alongside their active network to allow for easier expansion of the capacity of their network in future. 

"The regulations limit the relief to fibre which is part of the hereditament and was not laid, flown, affixed or attached before 1 April 2017," the government said.

"For some telecom networks, expansion over coming years will in part come from the utilisation of existing unused fibres – known as dark fibre," the government said. "Dark fibres are not included in business rates. Fibres are only included in the rateable value by the Valuation Office Agency once they have come into use. Therefore, some telecom operators will see their rateable value grow by lighting dark fibre as well as through investment in new fibre. The government does not intend to permit relief for dark fibre which, whilst lit after 1 April 2017, was in fact present before 1 April 2017."

The government's consultation is open until 21 November.