EU Official Retreats From French Plan To Tax Net
The European Union telecommunications commissioner, Viviane Reding, distanced herself Monday from a proposal by President Nicolas Sarkozy of France to impose a tax on Internet and mobile phone access, saying it might not be the best way to expand access to new media.
At a conference in Munich, Reding said that the proposal, made during a speech this month, ran contrary to her vision of a Europe where borderless and inexpensive access to Internet and cellphone networks was the standard.
"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 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.
With details of the Sarkozy proposal -- who will be taxed, and how much the tax might be -- still unknown, established digital giants like Google have been careful not to comment.
But European technology entrepreneurs, invited by the German publishing giant Hubert Burda Media to the third annual Digital, Life, Design conference in Munich, said that the Sarkozy plan contained a hint of meddling by the state.
"If Sarkozy wants to kick France out of the digital age, then he should go ahead," said Lars Hinrichs, founder and chief executive of the German online business and social platform Xing, which he said has had difficulties breaking into the French market.
Tariq Krim, head of Netvibes, an Internet services company based in Paris, said the proposal sent the wrong signal to traditional media companies that he said had not done enough to adapt to the changing revenue streams of the digital age.
"When you think about it, it's crazy," Krim said. "You'd think that it would be the other way around," with old media companies helping to finance new media.
Industry veterans, however, were guarded. Bernard Desarnauts, vice president of products and marketing for the digital media network distributor Glam Media, said a minimal tax would hardly be felt. Its benefits for France, on the other hand, might be great, with increased revenue enabling public broadcasters to once again produce high-quality French programs, documentaries and films.
"What Sarkozy can do is build the French brand, and supporting culture would be a way of doing that," he said. "This has less to do with the Netvibes of the world."
If implemented, the tax could also apply to mobile phone access, a hot topic as DLD conference participants looked toward the growing market for cellphone television. At a DLD panel on next-generation mobile networks earlier in the day, Reding drew applause for her demand that companies set limits on transmission of data, like text messages.
"People should not be punished for crossing a border," she said, referring to a charge networks levy on each other when callers use foreign networks. "The price structure has to be adapted to the use of the citizens."
She said that if prices did not come down, she would look into measures imposing limits before year's end.