Decisions on television cases put on hold

Date: 25/06/1998

By Chris Johnstone

A SERIES of long-running competition cases where commercial broadcasters have challenged aid to their state-owned rivals will not be dealt with by the European Commission until next spring at the earliest.

Decisions on a string of outstanding cases have been put on hold until overall guidelines are drawn up indicating what payments are justified by the broadcasters' public service obligations, such as religious or educational programmes.

The delay in dealing with the cases has already prompted one Spanish commercial channel, Telecinco, to launch a complaint in the Court of First Instance, claiming that the Commission is failing to do its duty.

Telecinco first complained to the Commission six years ago about the subsidies given to public broadcaster RTVE. Court hearings on its case were wrapped up in March, but a ruling is not expected before the end of next month.

Competition Commissioner Karel van Miert is handling some of the most politically explosive dossiers in his in-tray with caution.

The Commissioner will seek clearance from national governments for the new guidelines setting out what aid is justifiable after holding a series of consultation meetings with member states before the end of the year. They will give Van Miert an opportunity to win over governments before having to confront his colleagues in the Commission.

The backlog of broadcasting subsidy cases includes French commercial station TF1's complaint against France Television and complaints by private broadcasters against Italian public broadcaster RAI.

Media tycoon Rupert Murdoch added an extra case to the Commission's workload when he complained in April that the BBC's 24-hour news service was benefiting from illegal state aid. Murdoch said some cable companies had dropped BSkyB's Sky News when they were offered the BBC service free of charge.

The BBC, which is funded by a licence fee and a growing number of commercial ventures, had previously stood aside from the dispute between public and private broadcasters who rely on advertising for all or part of their revenue.

The Commission's Directorate-General for competition (DGIV) is also coming under fire from some industry associations for operating what amounts to an undeclared industrial policy which favours tie-ups between telecoms, information technology and media firms.

The European Newspaper Publishers Association (ENPA) claims the Commission is encouraging vertical integration between the sectors in an attempt to produce European companies which can take on US rivals. "It is a general policy line that is being developed," said ENPA director-general Michael vander Straeten.

Newspaper companies, which fear they will be squeezed and sidelined if telecom companies with deep pockets are allowed to buy up and take over firms at will, have joined forces to fight the threat.

Officially, the Commission is keeping its options open on its treatment of deals in sectors where distinctions are becoming increasingly blurred by the introduction of digital technology.

The institution is currently sifting through industry responses to its discussion paper on how the converging sectors should be regulated in future. Three options were offered: a standstill scenario in which the current rules would be left unchanged; the slow evolution of a new approach as cases came before the Commission; and a radical switch to new rules.

Murdoch has come out unreservedly in favour of the Commission rewriting from scratch its rulebook for the converging sectors, claiming it is impossible to work within the current framework.

Feature on a number of pending EU competition cases involving commercial broadcasters challenging aid to their state-owned rivals.