There have been growing rumours that the government is planning to introduce a tax on wireless broadband. A well reasoned blog on the subject can be found here .

At the moment, telecoms ducts – the pipes telephone cables pass through to reach homes and businesses - are essentially treated as offices and are therefore subject to business rates. The premise of the blog is that the Government is planning to extend the rates rules to wireless networks as well as wired ones.

For around a third of rural homes and businesses, broadband competition is yet to arrive – the only broadband offerings are resold BT Wholesale packages. In contrast, customers in London can typically expect around 8 competitors to BT using ADSL plus a variety of cable and wireless broadband offerings.

Around a one in five rural homes and businesses fall below the Government’s “universal service commitment” of 2Mbps, while many urban homes are able to receive services up to, and sometimes over, 50Mbps.

In hard to reach rural areas, the only broadband providers are often small, community run wireless projects – projects like South Witham in Lincolnshire.

Stephen Timms, the Minister responsible for implementing Digital Britain, writing in The Telegraph, laid out plans to provide funds to rural areas to ensure they reach the minimum broadband levels today, and will not be left behind as urban areas start to enjoy next generation broadband. However, in reply to a question, the Department for Business, Innovation and Skills confirmed that rating wireless broadband is indeed something the Government have had in the pipeline for some time so that, in their words, wireless networks are treated in an equivalent way to fixed networks.

Adding business rates to wireless broadband isn’t going to raise large sums from highly profitable publicly quoted companies, cherry picking highly profitable areas – but it will add a burden to organisations prepared to deliver a community solution where no-one else has. Some of these rural areas may even lose their only source of broadband as a result of this proposal.

Funding made available through Digital Britain will be drawn back to central Government by the Valuations Office Agency.

Rather than extending the rating rules on telecommunications, something unique to the UK, CBN would like politicians to consider an alternative approach aimed at genuinely encouraging diversity and investment in Britain’s rural areas.

Currently, charities are automatically given rate relief, and social enterprises may qualify at the Local Authority's discretion. If the Government were to consider guidelines which would allow community-owned broadband networks to automatically qualify for rate relief if they had a charter which ensured the benefit and profits were retained for the community, then diversity and investment in rural areas could be seen to have been encouraged.

As fibre-optic networks tend to create natural local monopolies, the rules may need to ensure only wholesale open networks qualify if they are to meet existing competition requirements. However, INCA is working hard to make sure that diverse services can be made available to all areas, regardless of their size and remoteness. Service competition in rural areas is to be welcomed and encouraged too!

Such guidelines should be cost neutral to Government coffers because so long as the current rules remain, investment in broadband will be heavily reduced. If, however, the networks become useful for delivering public services in rural areas, then they may actually become a useful tool in reducing public expenditure, especially for health and education.

Local authorities, communities and Government agencies can work together to help reduce the cost of delivering public services in rural areas – but only if the infrastructure is there.