Collaboration

EU telecommunications director not solidly behind Internet tax

At a Munich conference, European Union telecommunications director, Viviane Reding, said that a proposal by France’s President Nicolas Sarkozy to implement a tax on Internet and cell phone networks was not the best way to expand access to new media.

At a Munich conference, European Union telecommunications director, Viviane Reding, said that a proposal by France's President Nicolas Sarkozy to implement a tax on Internet and cell phone networks was not the best way to expand access to new media.

From the International Herald Tribune:

"I believe the taxation of the new technology might not be the right way in order to arrive at the goal of seamless use of new communication by all citizens," Reding said during an interview. She characterized Sarkozy's proposal as "the beginning, not the end of the discussion."

There has been a wide range of reaction to Sarkozy's unprecedented proposal, part of a plan to use the new revenue to counterbalance a ban on advertising on French public broadcasters. Reding has been unexpectedly successful in moving her pro-consumer proposals through the political process, much to the dismay of many of the largest telecommunications companies in Europe. Withholding her support for what could amount to another cost to the industry should allay some corporate anxiety.

Sarkozy's plan was announced on Jan. 8, 2008, as a way to leverage emerging technologies to bolster France's two public television stations and allow them to run free of advertising. He called the tax "infinitesimal."

From Time:

The announcement came Tuesday during Sarkozy's first full-blown solo press conference at the Elysée palace. As part of his plan for rationalizing the state's sprawling audiovisual empire, the President suggested "we consider the total suppression of advertising on public channels", and that income lost from the ad ban be compensated in part by "an infinitesimal sales tax on new communication methods, like internet access and mobile telephony."

Freeing state television stations from ratings-sensitive advertising, Sarkozy said, would allow public TV to quit trying to match the popular but mind-numbing game shows and reality television that now dominate the schedules of private broadcasters for what Sarkozy called "purely mercantile" reasons. Instead, public broadcasters could focus on quality documentary, educational, and fiction programming. "This is a revolution that, by changing the economic model of public television, would change the entire nature of cultural policy in our communication society," Sarkozy said.

The snag in the idea is that taxing web use is widely stigmatized as a sure way to stunt economic growth. "Generally speaking, taxing the Internet is considered a bad idea, and a potential brake to net use and development," says Audrey Mandela, founder of the independent London consulting agency Mandela Associates. "But without knowing the details of the French proposal, it's difficult to say how problematic an Internet tax there would be."

It is difficult to see how this would stimulate emerging technologies. It would seem that an Internet tax, regardless of size, would tend to push people in the other direction. What are your thoughts? Would you be willing to pay an additional tax for your Internet and cell usage to support television — even PBS?

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