Discord over public-service television

Date: 19/10/00

By John Shelley

CONSENSUS is a rare commodity in the EU, but all sides in the debate on the legal status of state-funded television agree on one thing: the current situation is a monumental mess.

Government-supported channels complain that they do not know what kind of services they are legally entitled to provide. Private broadcasters are angry because they say their public rivals can freely mix advertising revenue with taxpayers' cash. Member states bemoan the threat to state-funded TV posed by a backlog of competition cases. The European Commission itself admits the legal guidelines currently in place for deciding the disputes are simply not up to the job - hence the lengthy waits for rulings in TV competition proceedings.

But unfortunately this mutual understanding that something needs to be done is where agreement on the issue ends.

The dispute centres on the extent to which state-funded broadcasters should be allowed to operate in the same marketplace as private companies. The British model - in which public-service television is funded entirely by a licence fee - is not the problem because although the BBC competes for viewers with its rivals, it is not vying for advertising cash.

This is not the case in most other European countries, where publicly supported channels pool taxpayers' money with advertising revenue. Private broadcasters say this is unfair because it gives government-funded channels an advantage in competing for advertisers.

The Commission is inclined to agree and, in any other sector, such state aid would be ruled illegal. But this area is different, because a protocol added to the 1997 Amsterdam Treaty protects public-service broadcasters by insisting that state-funded TV should be treated as a special case.

Two years ago, the Commission proposed a set of guidelines for defining such special cases but in doing so, it tried to dictate how public-service broadcasters could operate. Among the measures it suggested were restrictions on taxpayer-funded channels competing for big sporting events and entertainment programmes. Governments opposed to any such controls on their state-aided broadcasters quickly shot them down.

Spurred on this year by renewed calls for action from the French presidency, staff in Competition Commissioner Mario Monti's department are having another go at tackling the issue.

This time, they are set to propose a quota system which would limit the amount of cash a state-funded channel could earn from advertising, with 20% of total revenue being touted as a possible maximum. Public-service broadcasters would also be barred from earning more than 15% of the total TV advertising market in their home country.

But this idea seems almost as doomed to failure as its predecessor, as it would have a devastating impact on state-supported broadcasters in France, Spain and Italy which currently earn more than 50% of their revenue from advertising. "Member states are very critical of the threshold idea, but this appears to be the only idea that they have had so far," said one industry expert.

The drafting of these proposals is still at an early stage, however, and a more sophisticated and complex quota system might prove to be more workable. But many member states are likely to oppose whatever proposals for new guidelines the Commission finally produces, preferring instead an approachwhich emphasises the protection of public-service channels rather than the marketplace.

Big players such as Germany and France would probably demand that something firmer be written into the EU treaty, effectively telling competition officials to keep their noses out in most cases. There is no way this will happen before the end of the current round of treaty reform talks in December, which means the issue could be held up for at least another three years until the next round of Intergovernmental Conference talks if this turns out to be the preferred option.

It seems the consensus that something needs to be done about state-funded television will be the only thing upon which everyone agrees for some time to come.

Article forms part of a survey 'EU and the media'.