The public broadcasting service (audiovisuel public) is a sector in crisis; there is no doubt about that. The financial difficulties it has faced over the last years, with Radio France employees protesting earlier this year against restructuring plans and refusing to work for 28 days in a row, have largely shown the desperation within the sector. The situation at France Televisions is not much better. Confronted with similar financial difficulties, the company is facing a challenging future and has recently seen its proposition to finance itself partially by reintroducing commercials until 9 PM, as wished for by the new director Delphine Ernotte, declined.
In this context, President Hollande announced a year ago a major reform of the public broadcasting tax. This tax, which is levied on every household owning a device enabling the reception of TV, funds the public television channels like FranceTV, Radio France, Arte, France Medias Monde and several others. To take into account the various ways of watching TV nowadays, Hollande expressed his will to extend the public broadcasting tax to portable items (laptops/tablets), without going much into detail about the modalities of the levy. From today’s point of view, however, undertaking such an important reform before the upcoming elections seems too risky. Further, the effectiveness of such a generalised tax levy is controversially debated. Firstly, because most households still own a TV. Secondly, because such a measure would largely be to the disadvantage of the younger generation, who is mostly using tablets or PCs to watch public TV and is often not profiting from own revenues. Last but not least, it would add up to the private copying levy (taxe sur la copie privée) and raise prices for electronic devices in France even more.
In view of growing speculations on how to increase the funding within this sector deeply in crisis, Minister for Culture and Communications Fleur Pellerin revealed on Sunday 13th of September to the Journal du Dimanche (JDD) the government’s plans to refine the tax levy financing the public broadcasting service. As the French President Hollande is already campaigning for the 2017 presidential election and is well aware that a supplementary tax raise is most likely going to be prejudicial to himself and his promise to diminish the tax burden until the end of his term, a more subtle way had to be found in order to achieve the same goal.
Therefore, the government decided to raise the public broadcasting tax very lightly, passing from 136 to 137€ a year. This first measure, which is merely the result of a simple adjustment for inflation, is coupled to a significant increase in the contribution of internet providers (taxe Télécom), who will have to sacrifice up to 1,2% of their turnover instead of 0,9% until now, very much to the greatest displeasure of SFR, Orange, Bouygues, Free etc. This last adjustment, expected to generate additional revenues up to 75 – 80 million €, allows the government not to raise significantly the TV tax nor levy an additional tax on smartphones, tablets or PC’s nor to bring about a reform of the entire system. A convenient political maneuver.
Nevertheless, all that is gold does not glitter. Fleur Pellerin claimed that this tax increase for internet suppliers is not going to be transferred to net users as the “competition on the telecommunication market is high and clients change their provider easily”. It’s a pity such a “clever” political trick has to be coupled with a big lie. In reality, changing an Internet provider is everything but easy. Indeed, taking into consideration that Internet offers are often combined with engagement for 12 or 24 months and are mostly linked to a high cancellation fee, it is everything but convenient or inexpensive. Moreover, knowing the pain to bring back a box, which you don’t own, and to get connected to a new one from a different provider costs you a lot of nerves, patience and phone calls.
What does this tell us?
It is most probable Internet providers are simply going to transfer this cost increase to their customers by raising the prices of their Internet offers. As Internet suppliers are all concerned to the same extent, namely by a tax increase of 0,3% of their turnover, it is pretty straightforward to make the customer pay for it.
In the end, every net surfer will pay no matter if he watches TV or not. The government does not have to fear for its popularity on this particular issue, as the public broadcasting tax is officially raised by only 1€, but solely to make sure to master its communication so as to reassure the population it won’t pay for the tax rise and encounter higher Internet prices.
Governing cannot go without enforcing unpopular measures, but when you get closer to elections, you tend to forget this willingly. In this particular situation, if you know internet users have all the best chances to pay either way for the tax increase, just pretend it’s not the case, by putting forward the “high competition on the market”. Until users actually pay, most people will already have forgotten about it and for the ones who haven’t, you will find someone else to blame.
Politics is beautiful, isn’t it?