the internet has been a hotly debated proposition that is widely criticized
by citizens, economists, and communications experts. Still the government
looking for new sources of income to pay for the escalating cost of
military and social programs, so the issue enjoyed a long debate in the U.S.
Congress, with an extension
of the current tax ban passing only recently after much internal arguing
within both parties.
Now French President Nicolas Sarkozy, oft labeled an iconoclast, has proposed
taxing the internet in France to finance state-owned television. The
scenario provides the interesting reversal of a government looking to give
television special privileges at the cost of internet, in this age, where
usually the internet is constantly stealing TV's thunder. President
Sarkozy gave the announcement at a press conference from Paris's Elysee palace.
The President of France laid
out an extremely controversial program to encourage state run
television. The first step, he says, is to "consider the total
suppression of advertising on public channels" via legislation making them
more viewer friendly. In order to compensate for this loss of revenue, he
suggests "an infinitesimal sales tax on new communication methods, like
internet access and mobile telephony."
Audrey Mandela, founder of the independent London consulting agency Mandela
Associates, is among the experts who say that gaining the support of the French
legislature and the French people for such an initiative would be very
tough. She says, "Generally speaking, taxing the Internet is
considered a bad idea, and a potential brake to net use and development, but
without knowing the details of the French proposal, it's difficult to say how
problematic an Internet tax there would be."
French internet use is growing by 14% per year, with a big 22% increase per
year in high-speed connections. Mandela suggested that a tax may cause
some new users to give up the internet, hurting communications companies.
However, other users need the internet and simply could not give it up, so it’s
not an option. She explains, "The people most likely to balk at
tax-increased Internet prices are new users who figure if it's getting more
expensive, they can keep doing without it. These days, there just aren't
many people who could respond to higher Internet prices by saying, 'Forget it,
I'll just do without the net from now on. Ten, even five years ago, that
wasn't necessarily so. Today, who has the choice?"
The likely proposal is estimated to be a flat tax per-user to Internet Service
Providers (ISPs). There are 16.1 million accounts in the nation, so a
flat monthly surtax of one euro would raise roughly $290 million USD for the
program (about 25% of the $1.2 billion USD in revenue from commercials on
Some say the tax could be even higher, as France has very
cheap internet service rates for Europe. The average monthly bill is a
mere $37, which is around 37% lower than the average of its neighboring
Some critics point out that the plan will lead to job cuts in State TV's
departments. State TV official have come out strongly against the
plan. They point out that President Sarkozy's plan will send the over a
billion dollars in advertiser revenue into the pockets of privately owned TV
networks, including market leader TF1, owned by Martin Bouygues who is a close
friend of Sarkozy.
While some may simply say, "c'est la vie", this unsavory personal
connection and the general implications of taxing the internet have many in
France up in arms.