Reducing the tax on Irish Broadband

TIPPINST – The Irish Business and Employers Confederation (IBEC) have come up with a number of recommendations to stimulate broadband and pc ownership in Ireland. These include:
* Reduction of the VAT rate on broadband services from 21% to 13.5%;
* Introduction of an innovative SME broadband programme;
* Implementation an Employee PC Purchase Programme with an innovative tax model to provide wider access to technology in the home and in society;
* A full review the County and Group Broadband Scheme to ensure a more streamlined approach to broadband roll out in rural areas
I would agree with the reducing the VAT on broadband as it is more akin to a service than a product and should therefore reflect the appropriate VAT rate. Streamlining the county and group broadband scheme is also a good idea as some schemes were approved early in the Summer of 05 while the majority had to wait until Autumn 05. The more cynical people out there pointed out the relationship between the order of schemes announced and key cabinet members constituencies.
The Group broadband schemes are proving to be a success as it allows the communities and the various providers to get on with the job. One of the problems with the scheme however was that providers could not start on the roll out until approval was granted as invoices prior to the approval date would not be considered as part of the scheme. In the future issues such as this and the one mentioned above will hopefully be addressed.

4 comments

  1. Tommy McCabe from IBEC got savaged on 5-7 live a few weeks ago for this bullshit report. Tommy went so far as to say the Forfas, ComReg and EU rankings of how bad we were doing in the broadband stakes were wrong.
    IBEC are demanding billions for universal broadband yet one of the technologies suggested to fix this was satellite. How about the biggest contributor to the TIF part of IBEC (eircom) stop detering competition and open up their networks, fix all the crappy phonelines so they can take a broadband signal and enabled the other 60% of the exchanged they have?
    IBEC totally ignored the most crucial and lacking part of broadband in Ireland – Local Loop Unbundling. How convenient since eircom are against the idea of LLU and have stated they don’t see a need for it.
    The VAT reduction is just another cynical ploy. Bills get reduced supposedly but it will actually enable them to increase prices through a nice stealth move. We have such a weak telecoms regulator that they won’t object.

  2. liam noonan says:

    Hi Damien,
    I would agree with your sentiment about the report.
    I still however would prefer to pay a lower rate of VAT or none at all.
    The LLU issue has to be addressed but even if it is, it will have little if any impact on rural hinterlands as they are more than 4 km’s from their nearest exchange. It may mean cheaper line rental but thats about all.
    Wi-fi is the only real alternative for alot of rural areas but as I pointed out in a comment to Bernies article
    (http://irish.typepad.com/irisheyes/2006/02/no_broadband_yo.html)
    this is not yet feasible as the funding only really allows residents who reside in more geographical accessible areas. If 3 – 4 houses reside in a valley the funding doesn’t support the expense of antennae and repeaters etc
    So while the report may be wrong, we have to extract from it what is usable and ditch the rest. This has to be then pushed as an agenda with local TD’s and councillors.
    Liam

  3. mbf says:

    There are DSL technologies that work well beyond the 1km range.
    I live less than 1km from the exchange in Kilcolgan, but I can’t get broadband.
    LLU *is* very important and needs to be done now.

  4. That 4km is additional bull from eircom. Smart and Magnet prove they can go as far as 6km. BT go as far as 8km in the UK using the exact same technology and basically having the same geographical conditions. In Australia with some tweaks they go as far as 20km. LLU is way more crucial to rural communities than urban communities if their lines were properly looked after. It’s not just about cheaper line rental.
    Wi-fi is a weak technology operating on public spectrum which is prone to becoming drowned in signals and interference. What is needed is the only national wireless licence which happens to be owned by eircom is split into tiny parcels and given to rural ISPs to use. This operates on reserved spectrum around 3.5ghz and is ideal for line and non-line of sight wireless and if WiMax every comes out of research hell then it is perfect to use. Again this is something the IBEC Report did not address. It also failed to address fibre to the home, something which is being planned for the rest of the EU at this stage.
    They talk about a 5bn investment when in reality the state could just buy eircom for 3bn, spend an additional 100m and 99% of the population could have broadband in less than a year and the other 1% in another 6 months and not one satellite dish purchased but no money in the greedy pockets of IBEC.
    The only good part of the report is addressing the planning issues. Nothing else is actually of value.

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