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New UK Wireless Network Tax May Hamper Internet Rollout

Posted by timothy on 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."

4 of 66 comments (clear)

  1. Funny thing about those margins by BadAnalogyGuy · · Score: 3, Insightful

    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.

    1. Re:Funny thing about those margins by commodore64_love · · Score: 3, Informative

      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.

      --
      "I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
    2. Re:Funny thing about those margins by tkrotchko · · Score: 3, Insightful

      "to million-dollar Comcast"

      Comcast is a $16 BILLION dollar company.

      --
      You were mistaken. Which is odd, since memory shouldn't be a problem for you
    3. Re:Funny thing about those margins by homer_s · · Score: 3, Informative

      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.