Cable Europe has reacted with surprise to the European Commission’s approval of plans by France and Spain to shore up the finance of public service broadcasters with a series of taxes on free-to-air channels, pay-TV and telecom operators.
In a statement Cable Europe, the trade body representing Europe’s cable operators, said a distinction should be drawn between Tuesday’s ruling under state aid rules and a pending investigation on whether the tax on telecom operators complied with EU telecom rules.
“While the cable industry recognises that Member States have wide discretion on how to finance services of general interest, new funding mechanisms which are a de facto sector specific tax are unwelcome by an industry that is to play a crucial role in pushing broadband penetration rates and long lasting competition against telco incumbents,” said Cable Europe MD Caroline Van Weede. “Such new burdens seem to run counter to the larger goals of promoting Europe’s Digital Agenda.”
On Tuesday the Commission gave its approval to Spain’s September 2009 law that brought in a series of new levies in return for public broadcaster RTVE ceasing all commercial activities.
A tax of 3% would be imposed on free-to-air commercial broadcasters and 1.5% on pay-TV broadcasters to help compensate RTVE for its loss of revenues. In addition a 0.9% tax would be placed on electronic communications operators. RTVE would also be granted an 80% share in the existing radio spectrum levy, up to a maximum of €330 million.
In a separate ruling the Commission approved the annual funding mechanism for France Télévisions. Under the new mechanism France Télévisions will receive a share of revenue from the public service broadcasting contribution and a subsidy from the national budget. Advertising on public channels is currently being reduced and will be abolished completely by the end of 2011.
Two new taxes, on advertisements shown by broadcast channels and electronic communication, such as cable and satellite operators, are being introduced to compensate for a fall in France Télévision’s income of up to 30%.
An appeal against the tax by TF1, M6 and Canal+ is pending.
