European Commission sees sense on mobile-TV ‘tax’

Posted by Julia Glotz Friday, June 5th, 2009

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I have almost lost count of how many stories and comment pieces of the “mobile TV suffers yet another blow” variety I have written over the last months. So it is refreshing finally to be able to write about some good news amid all the DVB-H debris and reports of DMB launches without phones.

As we report in New Media Markets this week, the European Commission’s tax directorate has done the sensible thing and abandoned proposals to reclassify high-end mobile phones that enable reception of television signals – a move that would have triggered a very recession-unfriendly import duty of up to 14%.

DG TAXUD’s latest draft regulatory documents – which were presented to member states at the end of April and which we’ve had a sneak at – also no longer contain provisions to reclassify phones with GPS receivers or those that exceed a certain screen size or camera quality.

This never looked like it was going to be one of the Commission’s more successful initiatives.

When reports of the proposal first made headlines last year (HERE, for example), commentators were quick to point out that DG TAXUD would be well advised to pay a visit to Ms Reding’s office to find out just how well a tax on mobile-TV handsets would fit in with the Commission’s high-profile push for DVB-H. Joined-up thinking this certainly wasn’t.

While the market is still waiting for a big European success story for broadcast mobile-TV, an increase in handset prices brought about by new import duty obligations would have almost certainly dealt a fatal blow to the mobile-TV ambitions of anyone who still has any mobile-TV ambitions.

DG TAXUD is still fine-tuning its proposals before they are due to be presented to member states at the beginning of July, but the overall thrust of the April drafts – including the decision not to reclassify high-end phones – is expected to remain intact.

One bit that is likely to be redrafted is the last mobile phone “characteristic” listed on the draft explanatory note, one of my favourite pieces of circular reasoning in a long time: “The mobile telephony function is the principal function. This is the case, for example, when it takes precedence over all other functions.”

Quite.