Potential New Rules, Taxes Illustrate Regulatory Pressures

In most countries, voice communications, Internet communications, broadcast media, cable TV and broadcasting have been governed by distinct sets of regulations. That made more sense in an era when each type of service was provided by a distinct and purpose-built network.

These days, as all media types can be delivered by all or most networks, there will be a bigger discontinuity between the older forms of regulation and the ways services are created and delivered, across networks.

Sweden's new policy of taxing use of PCs and tablets to watch the state-owned TV service, and a German decision on copyright fees, neatly illustrate some of the regulatory challenges that accompany changing communications and entertainment ecosystems.

Traditionally, Swedish households owning televisions have paid a monthly tax of SEK173 ($27) per month to support Sveriges Television, Sveriges Radio and educational broadcasting known as Utbildningsradion.

But Sweden's Radiotjänst collection agency now is collecting the fee even from Internet-connected computers. The logic is that, in some cases, PCs are used as “TV devices.”

German lower house of parliament separately approved a copyright bill that protects Internet search firms from payment of  fees to newspapers and other print publishers when snippets of stories are included in search engine results.

The bill's original draft would have allowed newspapers and other print publishers to stop search companies from showing text snippets, unless they paid licensing fees. The bill still has to win approval in the upper house, which is expected to oppose the current version of the legislation.

The other angle is that the bill does not fully settle the issue of whether search engine applications might have to pay publishers if news aggregators publish bigger amounts of content.

The move by Radiotjänst effectively makes a key form of broadcasting regulation applicable to PCs, notebooks and tablets, in a real sense, even when owners of tablets or PCs  do not watch TV. The tax is applied to a households that own Internet connected PCs, but not TVs, whether or not people in the household actually watch television or not.

Smart phones have been exempted from the law, at least for the moment, on grounds that the primary function of a smart phone is communications, not “watching TV.” Obviously, that distinction will be virtually impossible to maintain over the long term. But there is an existing principle that the “TV tax” applies to a “household,” not devices.

Presumably, that means Swedish households without TVs, but using Internet-connected PCs or tablets, will pay the fee only once, and will not have to pay for smart phone use, in addition to tablet or PC access.

Households that do not own PCs or tablets (possibly only a small fraction of all households), and do use smart phones, might ultimately be forced to pay the fee as well. The point is not whether it is “fair” or “right” for Sweden, the United Kingdom or Denmark to tax owners of TVs.

The point is that rapid changes in user behavior and device capabilities are changing the actual environment within which regulatory policy is conducted. Any nation that has distinct regulatory regimes for broadcasting, communications, Internet and print media will increasingly have to confront the growing contradictions and irrationality of older forms of regulation.