The EC has determined that the tax constitutes an administrative charge. “But according to the European rules, an administrative charge levied in this connection can only cover certain costs specified in them (relating mainly to licensing and regulation),” the EC writes in a note on the procedure. In other words, in the view of the EC, these services cannot be taxed to cover France Televisions’ bacon.

Under the levy, telcos and ISPs must pay in 0.9 percent on their revenues, and commercial broadcasters must pay between 1.5 and three percent, to balance the missing funding. While currently this is designed to make up for no ads during evening programmes, the ad ban is planned to be extended to all hours in 2012, when the analogue signal gets switched off.

“I have expressed doubts about the ‘telecoms tax’ on a number of occasions,” said Viviane Reding, the Member of the European Commission responsible for the information society and media in the EC’s notes on the proceeding. “Not only does this new tax on operators seem incompatible with the European rules, it also concerns a sector that is now one of the major drivers of economic growth. Moreover, there is a serious risk that it will be passed on to customers at a time when we are in fact trying to reduce their bills by cutting termination rates and the costs of mobile phone calls, data transfer and text message roaming.”

But no-one should be celebrating just yet. The French government will have two months to reply to the formal notice. Then if there is no reply, or the replies are not satisfactory, then the procedure goes to its next stage of “reasoned opinion.” At this point it goes back to France again for consultation. If France still doesn’t manage to make its case, only then does it get referred up to the European Court of Justice.

In a separate case, the EC has been investigating whether France Televisions will be getting undue state aid for its financing from 2010.