Sarkozy proposes tax on ISPs

French President Nicolas Sarkozy proposed a new tax on profits of internet providers and telcos to offset revenue lost as advertising on public television and radio goes off the air, an Associated Press report said.

Sarkozy confirmed a timetable for phasing out advertising on public stations starting next January, the report said.

Ads would be gone completely by 2011.

He said a new tax of 0.9% should be imposed on profits of internet providers and telecom operators to compensate state coffers for the estimated €650 million (US$1.3 billion) annual loss in advertising revenue.

In a surprise announcement, Sarkozy said in January that he wanted to eliminate advertising on public stations as a way to ensure quality programming.

Earlier, a commission he appointed presented Sarkozy with a plan laying out how to make up for the loss in ad revenue. The plan still requires parliamentary approval.

Commission head Jean-Francois Cope, who also leads the governing party in the National Assembly, proposed the new tax and increasing the television license fee in the report.

Staff members at public radio and television stations staged a strike earlier this year against the plan.

Critics of Sarkozy's shake-up say he is handing a gift to private channels.