Row looms over bid to limit TV advertising on public channels

Date: 21/09/00

By John Shelley

COMPETITION Commissioner Mario Monti will re-ignite a fierce battle over public broadcasting rules with a bold new plan to limit the amount of money state-funded television channels can earn from advertising.

Prompted by a growing chorus of call from member states for clarification of the rules governing publicly-funded TV, Monti intends to revive controversial proposals aimed at limiting the anti-competitive effects of state aid for broadcasters.

The first set of guidelines proposed by the European Commission two years ago were shot down in flames by governments determined to protect publicly-funded TV channels from restrictions on the kind of programmes they could bid for using taxpayers' money.

Under the new proposal, which is still being drafted, broadcasters which benefit from state funding would not be allowed to get more than 20% of their revenue from advertising. Government-sponsored channels would also be restricted to a 15% share of the total TV advertising market.

The guidelines, which are being drawn up to help Commission officials rule on competition cases involving publicly-funded broadcasters, would not force member states to change the way they support such channels.

But they will nevertheless provoke outrage among broadcasters in countries such as France, Italy and Spain which currently receive more than half their funds from private sources. They would have to either reduce their income from advertising or face losing competition cases brought by their private-sector rivals.

Some public broadcasters have already reacted angrily to Monti's initiative, arguing that the planned rules would restrict their activities unfairly without clearing up the ambiguities which have led to the current backlog of competition complaints. "We do not think these proposals will help anyone," said one industry source. "The whole idea is to clarify the situation regarding competition issues, but this will simply not have an impact on the many cases which revolve around technical elements and not the amount of funding taken from advertising."

Two years ago, Monti's predecessor Karel van Miert tried to push through guidelines on state aid for television, but abandoned the attempt in the face of fierce opposition from some member states. They objected to his attempts to define the kind of programming they could support with taxpayers' money by introducing tough restrictions on the use of government subsidies to bid for major sporting events and entertainment shows.

Now, inspired by calls from the French presidency for a fresh look at the issue, Monti has revived the plan, but with a twist.

Aware that EU-wide rules on content are a political impossibility, the Italian Commissioner now proposes to minimise the degree to which public service broadcasters can distort competition by limiting their participation in advertising markets.

But insiders say these guidelines could prove no less explosive than the first set offered by Van Miert. They claim Monti's plans would fall far short of delivering the extra protection which most member states want for their public broadcasters, and would instead leave channels which currently depend on advertising more vulnerable to competition complaints.

The European Commissioner for Competition, Mario Monti, will re-ignite a fierce battle over public broadcasting rules with a bold new plan to limit the amount of money state-funded television channels can earn from advertising. Under a new proposal, which is still being drafted in September 2000, broadcasters which benefit from state funding would not be allowed to get more than 20% of their revenue from advertising. Government sponsored channels would also be restricted to a 15% share of the total TV advertising market.