Vtesse were appealing for tax rates to be equal between smaller and larger networking companies. Current legislation allows for Vtesse to be taxed at a higher rate than BT.

A statement released by Vtesse said: “Yet again the court did not fully engage with the effect on competition where new entrants are taxed at 20 times or more than BT for the use of fibre.”

The Court of Appeal’s judgement allows the valuation office agency to use different methods for calculating tax for BT and Vtesse. The court’s decision was not unanimous. Lord Justice Sedley commented: “There is arguably a gross disparity in BT’s favour between the rateable value of its and Vtesse’s cables, which may be a radical inequity in the rating system.”

The government has outlined its goal for ‘Broadband Britain’, an ambition where everyone has access to high speed network access within the next two years.

Harbottle & Lewis lawyer, Tony Ballard who represents Vtesse, commented: “We are determined to pursue this. Broadband Britain is not going to happen if competition does not flourish and the infrastructure market will not be competitive if those that provide the infrastructure are taxed in discriminatory way.” He continued: “We are seeking leave to appeal to the Supreme Court in a matter of great public importance, given how damaging we believe the current situation is for the government’s ambitions to foster investment in next-generation networks.”

The issue has been highlighted by the opposition. Last month, shadow culture secretary, Jeremy Hunt, spoke on the subject of spreading digital technologies: “We need to tackle the barriers to this investment head on. Barriers like the lack of access for other operators to BT’s ducts, dark fibre and other infrastructure; a failure to make any progress on allowing the use of telegraph poles for overhead delivery of fibre; and business rates anomalies that favour incumbent operators.”