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CA rejects EU telecoms law challenge to UK fibre-optics tax

28 January 2010

The Court of Appeal today dismissed a challenge by Vtesse Networks Ltd to the way its fibre-optic network is valued for the purpose of levying Business Rates.

The Valuation Office Agency had valued Vtesse's network by reference to the valuations which had already been ascribed to comparable fibre-optic networks, but not by reference to the valuation which had been ascribed to BT's ubiquitous national network (which includes a substantial fibre-optic component).  The Lands Tribunal decided that, under principles of UK ratings law, Vtesse's network was not usefully comparable with that of BT, and the Valuation Officer's valuation should therefore stand.  Vtesse appealed to the Court of Appeal, arguing that EU Telecoms Directives required that Vtesse's network be valued in a way that took account of the valuation ascribed to BT's network, lest competition be distorted.  In that regard, Vtesse sought to show that it was paying substantially more in rates per metre of fibre-optic strand pair than was its competitor, BT.

Dismissing the appeal, the Court of Appeal held that the UK ratings regime pursued the same object of equal treatment as lay behind the Directives.  The Lands Tribunal was applying well established UK valuation principles and, in finding that Vtesse's network was not usefully comparable with that of BT for valuation purposes, was making a decision within the scope of its expert valuation judgement.  Against that background, Vtesse could not establish any incompatibility with the Directives, and there were therefore no good grounds for requiring the Lands Tribunal to revisit its decision.

Monckton barristers Christopher Vajda QC and Alan Bates acted for the Respondent, the Valuation Officer.

To read the judgment, please click here.

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Christopher Vajda QC
Alan Bates