Spain's telcos against TVE ads tax

Iñaki Ferreras

Spain's new audiovisual law forbidding national public broadcaster TVE from inserting any kind of advertisement in its schedule is set to be active this month, but won't have an easy time. One of the conditions of the new law is taxing Spain’s telcos to compensate for the lack of advertisements, a condition which is likely to lead to legal action.

The new law taxes telcos 0.9% of their annual revenues. From the very first moment the law was passed the country's telcos have been studying the best way to bring the law to the courts because they believe this tax is unfair. The telcos argue the matter has nothing to do with them because they do not belong to the audiovisual sector. When the first 'invoice' arrives in their offices, telcos are likely to start legal proceedings aimed at not paying.

Regulator the Telecommunications Market Commission (CMT in Spanish) will be in charge of charging the tax and it is more than likely the CMT will reject the telcos reporting. Some experts forecast the conflict could endure for years.

TVE's yearly income after the cessation of advertising will be €1,200 million until 2011 with maximum growth of 1% a year between 2012 and 2014.

National private broadcasters will allocate 3% of their revenues each and pay-TV broadcasters will allocate another 1.5% each.

The goverment's argument to include the telcos within this new tax is that they too offer audiovisual services. In Vodafone's case the telco only offers mobile TV, but the company has recognized it will offer IPTV in the future as do Telefónica's Imagenio, the cable operator Ono, and telcos Jazztel and Orange.

Officially on January 1, 2010 all ads will disappear from TVE.