In Sweden, TV Tax Comes to Smartphones

March 1, 2013, 3:12 p.m. ET

In Sweden, TV Tax Comes to Smartphones

By GUSTAV SANDSTROM

Sweden’s public broadcaster, feeling pressure as streaming heavyweights like NetflixNFLX +0.69% and HBO gain ground with their newly-founded Nordic services, is taking the nation’s television license fees to a new level by asking smartphone and tablet users to pay up.

License fees have been in place for years as state-backed broadcasters look to fund commercial-free programming, including the BBC. In Sweden’s case, anyone owning a television is forced to pay a SEK173 ($27) tab per month for Sveriges Television, Sveriges Radio and educational broadcasting known as Utbildningsradion. That fee hardly looks like a bargain compared with the SEK79 ($12) monthly fee that Netflix Inc. and Time Warner Inc.’s TWX +0.85% HBO each charge subscribers in Sweden.

The good news for Swedes is no matter how many televisions one owns, they only need to pay the fee once.

The bad news is times are rapidly changing and in order to keep up with the increasing use of nonconventional ways to access Sweden’s public broadcasting, Sweden’s Radiotjänst collection agency is expanding its reach to computers and mobile devices with an Internet connection. That means people ditching televisions for tablets and smartphones are no longer able to ditch the TV fee.

On Friday, Sweden’s public broadcasting company will begin to start collecting license fees from owners of Web-connected devices.

“We have started gradually with computers and Internet tablets,” Radiotjänst spokesman Johan Gernandt said in an interview Wednesday. At the moment, few households only use a smartphone to access television or radio services, so there aren’t many people who would need to pay for just owning a device with Internet connectivity. Radiotjänst won’t ask specifically about smartphones when it collects the fees, but legally speaking they count too, Mr. Gernandt said.

Under Radiotjänst new fee-collecting scheme, the agency checks its customer database against address registers and then calls or visits households that don’t already pay. Denmark already charges a similar TV license fee for Internet connected devices.

Mr. Gernandt figures most Swedes probably won’t complain about the new practice. “Nine out of 10 already pay a TV license, so they probably aren’t angry.”

But the shift has sparked backlash in Sweden where people already pay some of the highest taxes in the world. On Twitter, one user asked “if you are completely out of your mind, Swedish politicians.” People walking the streets of Stockholm this week characterized the move as “completely absurd” and “a bit sick.” The Swedish media have latched onto the issue, too.

A look at the finances of Radiotjänst could cause observers to wonder if the agency is creating more of a public relations headache than it really needs. The agency expects only a marginal revenue boost by charging for tablets and smartphones compared with the SEK7.2 billion collected in license fees last year, Mr. Gernandt said.

Radiotjänst does have a legal leg to stand on as the expanded license collecting drive is supported by a law change from 2007, which makes the TV license rules technically neutral by not specifying which devices should count as receivers. Catharina Henriksson, press secretary at the Swedish Ministry of Culture, said in an interview that lawmakers wanted a technically neutral law because of the rapid technical development. She said it is up to Radiotjänst to decide which gadgets will be in the cross hairs.