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Broadband

Volume 450: debated on Monday 23 October 2006

To ask the Secretary of State for Trade and Industry what discussions he or his officials have had with (a) the Department for Communities and Local Government, (b) the Treasury and (c) Ofcom on (i) the exemption of local loop unbundling broadband operators from non-domestic rates and (ii) any interim arrangements to ensure that the operators are subject to the same effective non-domestic rate as BT; and if he will make a statement. (92445)

The Department of Trade and Industry (DTI), the Department for Communities and Local Government (DCLG), Valuation Office Agency (VOA) and Office of Communications (Ofcom) have held formal and informal discussions with British Telecom (BT) and local loop unbundling operators on this subject and there will be further discussions as part of the work on finding a long-term solution.

Local loops are not exempt from non-domestic rates. BT is currently liable for non-domestic rates on all unbundled local loops in England until 31 March 2008. Local loop operators pay an annual charge to BT for each local loop they unbundle. BT is entitled to recover a contribution to their non-domestic rates bill within this annual charge, as determined by Ofcom.

A consultation paper was issued by DCLG in December 2005 proposing various options including regulating to make BT responsible for the rates liability on all local loop unbundles in England as a short-term option. DCLG intends to issue a further consultation paper on the long-term options.

To ask the Secretary of State for Trade and Industry what definition his Department uses of broadband; what the evidential basis is for the selection of the kbit/s rate in that definition; and what research he has (a) commissioned and (b) evaluated on broadband kbit/s rates used by other EU member states. (93680)

We use the Office of Communications' (Ofcom) definition of “higher bandwidth, always-on service, offering data rates of 128kbps and above”, first published in its report “Review of the Wholesale Broadband Access Markets” in May 2004 on the Ofcom website www.ofcom.org.uk/consult/wbamp/wholesalebroadbandreview/broadbandaccessreview/pdf

This definition is used to measure take-up of the dynamic range of services available to residential and business consumers that are classed by the industry as broadband and to make comparisons with other European countries.

My Department has neither commissioned nor evaluated broadband kbit/s rates used in other EU member states as the independent regulator, Ofcom, is responsible for the communications regulatory framework in the UK. Ofcom's final decision published in “Review of the Wholesale Broadband Access Markets” was communicated to the European Commission and the regulatory authorities in other member states as required by EU communications directives designed to create harmonised regulation across Europe.