Rating manual - Volume 5 - Section 1035 : Public Telephone and Interactive Kiosks (including AA/RAC Kiosks)

All Material Updated

Section 1035: Public Telephone and Interactive Kiosks (including AA/RAC Kiosks)

1 Introduction

1.1

Telephone kiosks are a rateable occupation of land under the provisions of Section 64 (4)(a) to the Local Government Finance Act 1988. Telephone kiosks are specifically mentioned as part of a Central Rating List Telecom Operator’s rateable assets in Regulation 4 of the Non-Domestic Rating (Railways, Telecommunications and Canals) Regulations 1994

1.2

BT operates the majority of Public Telephone Kiosks in the UK. BT has a universal service obligation under the terms of their Public Telephone Operators licence. BT’s kiosks are included in their central rating list assessment. The Central Valuation Officer deals with central List Telecommunications Hereditaments at CEO, see Rating Manual - Volume 2: Section 12, Practice Note 2, paragraph 3.5.

1.3

Kingston Communications (Hull) plc occupy some 500 public telephone kiosks in their original PTO licence area, which was, but is no longer, restricted to the Kingston upon Hull conurbation area. Kingston's kiosks are assumed to be contiguous with and therefore included in their public telephone network hereditament, which has been valued on a Receipts and Expenditure basis and therefore do not require individual assessments.

1.4

Advice on other AA/RAC hereditaments is contained in Rating Manual Volume 5: Section 1.

2. Brief History

2.1

The Post Office Telephones (now BT) introduced the K6 Jubilee kiosk, with the numerous small windows, in 1936 and it became the standard for 30 years. British Telecommunications plc (BT) had a total of 113,550 public telephone kiosks in England, Scotland and Wales as at 1/4/95 with 94,200 located on public land and 19,350 on private land. The kiosks in England and Wales are included in BT's Central list assessments.

2.2

Mercury Communications Limited (MCL) installed their first kiosk at Waterloo railway station in 1988 and occupied some 2,500 public telephone kiosks in England, Scotland and Wales as at 1/4/95. The kiosks in England and Wales were included in MCL's Central list assessments until 1/10/95 when MCL sold 1,500 of their kiosk sites to IPM - Inter-Phone (IPM) and withdrew from the payphone market completely.

2.3

The Duopoly review in 1991 and the subsequent liberalisation of the telecommunications market has allowed operators other than BT, MCL and Kingston to obtain PTO licences from the DTI and install public telephone kiosks in the UK.

2.4

IPM Inter-Phone were granted a licence on 9 June 1995 and their first kiosk, on the Tottenham Court Road, London became operational on 3/7/95. IPM removed the 1,500 MCL kiosks and had replaced 700 with their own design (mainly Orange or Black) by December 1995, with all 1,500 sites operational by September 1996.

2.5

New World Payphones (NWP) were granted a licence on 5 February 1996 and launched their first public highway located kiosk in August 1996, with 500 sites being operational on Public and Private sites by September 1997. NWP kiosks are mainly red or black.

2.6

Eurobell had installed some 20 Public Telephone Kiosks in their Cable TV franchise areas in West Kent, Sussex and the South West by April 1996.

2.7

BT have been trialling Interactive kiosks and planned to install 1,000 by April 2000, mainly in railway stations, airports, shopping malls and other secure locations but this planned roll out has been delayed. Other private operators are also installing Interactive kiosks but little detail is known at this time. The Interactive kiosks have a TV screen often with touch controls and are linked by telephone lines to customers who offer goods and services or to internet providers or web sites offering local information and ticket booking facilities.

3. Relevant Legislation

3.1

Public Telephone Kiosks operators require a Public Telephone Operators (PTO) licence issued by the DTI under Section 7 of the Telecommunications Act 1984. The licensed operators have Telecom Code powers under Schedule 2 of the Act. PTO licences are usually granted for 25 years and include a right to interconnect to other PTO networks.

3.2

BT and Kingston Communications are the only operators who currently have a universal service obligation under their licences which requires them to install kiosks on the direction of Oftel, regardless of profitability

4. Planning Considerations

4.1

Local Authorities have to be notified when a kiosk is installed even though public telephone kiosks do not require planning consent. BT and Kingston Communications have to obtain authority from Ofcom (formerly Oftel) to remove kiosks but the other operators are only required to give 42 days notice of removal.

4.2

Planning restrictions in conservation areas require kiosks to be the traditional BT "Jubilee" type and a number of these have been installed by NWP in central London. However, they have to be a different colour to the BT red kiosks and are usually painted black with NWP's logo etched on the windows. A number of Chinese style kiosks have been installed in London’s Chinatown.

5. Material Day and Effective Date Considerations

5.1

The Material and Effective date for a new installation is the date it is capable of beneficially occupied. This is the date the installation is complete and a power supply and telephone line are available to the kiosk.

However, kiosks are installed and commissioned often within a few days. The date of commissioning should be obtained from the telephone kiosk operator. In most cases it is reasonable to accept the date of commissioning as the Material Day and Effective Date for the rating list entry, subject to the appropriate effective date provisions.

6. Unit of Assessment

6.1

Kiosks, such as BT’s and Kingston’s that are occupied together with a telecommunications cable network will form part of the network valuation and should not be separately assessed.

6.2

Kiosks that are occupied independently from a telephone cable network are often found in pairs or groups of four and where they are contiguous to each other they will form one unit of assessment. However, several kiosks on one street, which are not contiguous, should be individually assessed.

6.3

Some IPM payphones have been installed within separate compartments in bus shelters and these kiosk compartments should be treated as occupied for a different purpose from the bus shelter and assessed separately, where applicable.

6.4

It is considered that a phone mounted in a simple pole or simply fixed to a wall with no hood can be considered as deminimis.

7. Plant and Machinery

7.1

It should be noted that the payphone and interactive TV screen are non-rateable items of plant and machinery. However, poles, posts, supports and foundations used in connection with telecommunications cables, fibres, wires, or any such system of such items, are rateable for the 1995 rating list by virtue of Class 3 (f) of the Schedule to Regulation 2 of the Non-Domestic Rating (Plant and Machinery) Regulations 1994, SI 1994 No. 2680. The Regulations are repeated for the 2000 list (SI 2000 No.540 in England and SI 200 No. 1097 in Wales).

7.2

The kiosk is rateable as a chattel, being the place in which the business is conducted. Kiosks are also named as part of the central list telecom, designated person’s relevant hereditaments. Kiosks are mainly either the full walk in box type or the pole or wall mounted hood construction.

8. Valuation Considerations

8.1

Location is paramount in the value of a kiosk. Rental value is dependent on the levels of receipts that can be generated from the payphones. Details of the level of gross receipts should be requested directly from the kiosk operator, quoting the telephone numbers of the kiosks, in order to identify the sites. Kiosk operators on private land usually have to pay the landlord a rent based on a percentage of gross receipts, which can vary with location.

9. Enquiries/Coordination

9.1

For enquiries on this class contact Michael Hetherington Rating Directorate, CEO (based at Durham VO) on PN 3221032 or via email to the “Mast Advice” inbox.


1 Introduction
1.1	Telephone kiosks are a rateable occupation of land under the provisions of Section 64 (4)(a) to the Local Government Finance Act 1988. Telephone kiosks are specifically mentioned as part of a Central Rating List Telecom Operator’s rateable assets in Regulation 4 of the Non-Domestic Rating (Railways, Telecommunications and Canals) Regulations 1994
1.2	BT operates the majority of Public Telephone Kiosks in the UK. BT has a universal service obligation under the terms of their Public Telephone Operators licence. BT’s kiosks are included in their central rating list assessment. The Central Valuation Officer deals with central List Telecommunications Hereditaments at CEO, see Rating Manual - Volume 2: Section 12, Practice Note 2, paragraph 3.5.
1.3	Kingston Communications (Hull) plc occupy some 500 public telephone kiosks in their original PTO licence area, which was, but is no longer, restricted to the Kingston upon Hull conurbation area. Kingston's kiosks are assumed to be contiguous with and therefore included in their public telephone network hereditament, which has been valued on a Receipts and Expenditure basis and therefore do not require individual assessments.
1.4	Advice on other AA/RAC hereditaments is contained in Rating Manual Volume 5: Section 1.
2. Brief History
2.1	The Post Office Telephones (now BT) introduced the K6 Jubilee kiosk, with the numerous small windows, in 1936 and it became the standard for 30 years. British Telecommunications plc (BT) had a total of 113,550 public telephone kiosks in England, Scotland and Wales as at 1/4/95 with 94,200 located on public land and 19,350 on private land. The kiosks in England and Wales are included in BT's Central list assessments.
2.2	Mercury Communications Limited (MCL) installed their first kiosk at Waterloo railway station in 1988 and occupied some 2,500 public telephone kiosks in England, Scotland and Wales as at 1/4/95. The kiosks in England and Wales were included in MCL's Central list assessments until 1/10/95 when MCL sold 1,500 of their kiosk sites to IPM - Inter-Phone (IPM) and withdrew from the payphone market completely.
2.3	The Duopoly review in 1991 and the subsequent liberalisation of the telecommunications market has allowed operators other than BT, MCL and Kingston to obtain PTO licences from the DTI and install public telephone kiosks in the UK.
2.4	IPM Inter-Phone were granted a licence on 9 June 1995 and their first kiosk, on the Tottenham Court Road, London became operational on 3/7/95. IPM removed the 1,500 MCL kiosks and had replaced 700 with their own design (mainly Orange or Black) by December 1995, with all 1,500 sites operational by September 1996.
2.5	New World Payphones (NWP) were granted a licence on 5 February 1996 and launched their first public highway located kiosk in August 1996, with 500 sites being operational on Public and Private sites by September 1997. NWP kiosks are mainly red or black.
2.6	Eurobell had installed some 20 Public Telephone Kiosks in their Cable TV franchise areas in West Kent, Sussex and the South West by April 1996.
2.7	BT have been trialling Interactive kiosks and planned to install 1,000 by April 2000, mainly in railway stations, airports, shopping malls and other secure locations but this planned roll out has been delayed. Other private operators are also installing Interactive kiosks but little detail is known at this time. The Interactive kiosks have a TV screen often with touch controls and are linked by telephone lines to customers who offer goods and services or to internet providers or web sites offering local information and ticket booking facilities.
3. Relevant Legislation
3.1	Public Telephone Kiosks operators require a Public Telephone Operators (PTO) licence issued by the DTI under Section 7 of the Telecommunications Act 1984. The licensed operators have Telecom Code powers under Schedule 2 of the Act. PTO licences are usually granted for 25 years and include a right to interconnect to other PTO networks.
3.2	BT and Kingston Communications are the only operators who currently have a universal service obligation under their licences which requires them to install kiosks on the direction of Oftel, regardless of profitability
4. Planning Considerations
4.1	Local Authorities have to be notified when a kiosk is installed even though public telephone kiosks do not require planning consent. BT and Kingston Communications have to obtain authority from Ofcom (formerly Oftel) to remove kiosks but the other operators are only required to give 42 days notice of removal.
4.2	Planning restrictions in conservation areas require kiosks to be the traditional BT "Jubilee" type and a number of these have been installed by NWP in central London. However, they have to be a different colour to the BT red kiosks and are usually painted black with NWP's logo etched on the windows. A number of Chinese style kiosks have been installed in London’s Chinatown.
5. Material Day and Effective Date Considerations
5.1	The Material and Effective date for a new installation is the date it is capable of beneficially occupied. This is the date the installation is complete and a power supply and telephone line are available to the kiosk. However, kiosks are installed and commissioned often within a few days. The date of commissioning should be obtained from the telephone kiosk operator. In most cases it is reasonable to accept the date of commissioning as the Material Day and Effective Date for the rating list entry, subject to the appropriate effective date provisions.
6. Unit of Assessment
6.1	Kiosks, such as BT’s and Kingston’s that are occupied together with a telecommunications cable network will form part of the network valuation and should not be separately assessed.
6.2	Kiosks that are occupied independently from a telephone cable network are often found in pairs or groups of four and where they are contiguous to each other they will form one unit of assessment. However, several kiosks on one street, which are not contiguous, should be individually assessed.
6.3	Some IPM payphones have been installed within separate compartments in bus shelters and these kiosk compartments should be treated as occupied for a different purpose from the bus shelter and assessed separately, where applicable.
6.4	It is considered that a phone mounted in a simple pole or simply fixed to a wall with no hood can be considered as deminimis.
7. Plant and Machinery
7.1	It should be noted that the payphone and interactive TV screen are non-rateable items of plant and machinery. However, poles, posts, supports and foundations used in connection with telecommunications cables, fibres, wires, or any such system of such items, are rateable for the 1995 rating list by virtue of Class 3 (f) of the Schedule to Regulation 2 of the Non-Domestic Rating (Plant and Machinery) Regulations 1994, SI 1994 No. 2680. The Regulations are repeated for the 2000 list (SI 2000 No.540 in England and SI 200 No. 1097 in Wales).
7.2	The kiosk is rateable as a chattel, being the place in which the business is conducted. Kiosks are also named as part of the central list telecom, designated person’s relevant hereditaments. Kiosks are mainly either the full walk in box type or the pole or wall mounted hood construction.
8. Valuation Considerations
8.1	Location is paramount in the value of a kiosk. Rental value is dependent on the levels of receipts that can be generated from the payphones. Details of the level of gross receipts should be requested directly from the kiosk operator, quoting the telephone numbers of the kiosks, in order to identify the sites. Kiosk operators on private land usually have to pay the landlord a rent based on a percentage of gross receipts, which can vary with location.
9. Enquiries/Coordination
9.1	For enquiries on this class contact Michael Hetherington Rating Directorate, CEO (based at Durham VO) on PN 3221032 or via email to the “Mast Advice” inbox.