Dish tax bill

Irulan

The following is a report from todays Mail On Sunday.

Sky to fight £150 million a year tax bill.
By Simon Fluendy
NEW BSkyB chief executive James Murdoch faces the first major test of his management skills over plans by com_munications watchdog Ofcom to slap a controversial 'dish tax' on the satellite broadcaster.
The proposals could see Sky - part of the Murdoch media empire that famously pays little corporation tax - hit for £150 million a year.
Murdoch, who was recently shoe-horned into the top job by his father and Sky chairman Rupert in the face of opposition from leading investors, will have to persuade Ofcom chief executive Stephen Carter that the digital broad_caster should not have to pay a big fee based on its subscriber numbers.
Depending on how Ofcom calculates the levy, Sky's seven million customers could face having to pay an extra £20 a year. That in turn could affect Sky's efforts to gain new subscribers and tap new income streams after only recently moving back into profit.
In particular, the tax could hamper Sky's plans to raise the average amount subscribers pay annually from £366 to £400 by the end of 2005
Ofcom must introduce some kind of tax next year on all radio spectrum -the airwaves used by broadcasters - not already covered by present laws.
Industry analysts say that Sky has the most to fear from the move.
One expert said: 'ITV and Channel 5 already pay for their spectrum but Sky does not. The new Communications Act specifically orders Ofcom to hold a consultation on recognised spectrum access.'
Ofcom may choose to treat Sky like Channel 5. Unlike BBC and ITV, the terrestrial broadcaster does not have public service requirements and is con_sidered a better comparison with Sky.Channel 5 currently pays £24.6 million a year for its spectrum access, covering 85 per cent of viewers, and has a six percent market share. But, Skv's
supporters reject any direct comparison with Channel 5. One said: 'Sky is not using a scarce resource as the terrestrial stations are.
'Sky manages to broadcast 400 channels into the bandwidth it once used to fit 100 channels. You only need charge a high price to manage scarce resources.
Aside from the technical and commercial issues, the discussions betweeen Sky and Ofcom could have political ramifications.
Rupert Murdoch recently indicated that after supporting labour in the Last election, he might switch his newspapers) allegiance to the Tories.
The Government is keen to keep Murdoch onside but is unhappy at t low level of tax that Murdoch's empire pays in the UK.
A Sky spokesman could not comment in detail on the tax issue, but promised that the company would 'play a full part,' in the consultations.

Capt'n Midnight

'Sky manages to broadcast 400 channels into the bandwidth it once used to fit 100 channels. You only need charge a high price to manage scarce resources.

Eh yeah ... I'd argue that 28E is a scarce resource -
just how many non-SKY english langague channels are transmitted from it ???????

Yes there are other satellites - but you could equally argue that VHF bands could be used for terresterial - but in both cases > 95% of the target sudiance does not have the equipment to watch it (most UK homes don't have VHF aerials anymore..)

Also aren't the terresterial channels broadcasting something like 36 channels into bandwidth that used to only have 5... Kinda makes Sky's claim of a four fold incresase look wastefull of scarce resources..

Remember they are based in Luxemburg so why should they be treated less fairly than the local stations...

Mike 1972

The official reason for not using VHF Bands 1 and 3 in Britain is that they are now allocated for two way radio although if one tunes across these frequencies on a scanner in most prts of the UK all theyll hear is the ham stuff below 52MHz and the DAB stuff on the top end of Band 3

While there Murdoch and $ky definitely should be paying a lot more tax spectrum taxes arent the best way to go

Remember Astra 2 is a Luxembourg satellite so sky technically arent a British broadcaster at all. While they do uplink from the UK it wouldnt be very difficult to shift the operation to another country. The viewers would hardly even notice the difference.

Satellite broadcasters tend to be pretty efficent spectrum users anyway as the same frequencies can be reused by dozens of other satellites (e.g. Hotbird) and because the costs of launching and maintaining a satellite are high (albeit not as high as building and running a terrestrial UHF network) there goint to use transponder caacity as efficently as possible

Capt'n Midnight

The whole point is that Sky's argument is a just tosh...
They more or less have a monopoly and they are arguing (reason it out) that they is more competition in the satellite market than in terresterial !!!!!

The band width is not available for anyone else to use simply because people don't have receivers for it..

eg: If you were to start transmitting TV signals in VHF in the UK - very few people would recieve them , in the same way that very few people receive Hotbird at present...