Van Miert’s TV plans get scrambled

Date: 05/11/1998

By Peter Chapman

FOR 75 years, the British Broadcasting Corporation has been a byword for televisual excellence.

From the start, the BBC was designed to meet the needs of all sectors of British society. This meant striking a careful balance between programmes with mass appeal and those targeted at minorities who nevertheless made up a significant portion of the population.

There had to be educational programmes, farming shows for people working on the land, and Christian church services on Sundays, while Wales and Scotland required broadcasts in their own ancient languages.

Yet, at the same time, the BBC showed mass-appeal sports events which most Brits could not imagine life without, such as the final of the Football Association Cup and the Grand National horse-race.

Over the years, the corporation has become inextricably linked with these events and, in some ways, is seen as the epitome of Britishness. People may grumble about paying their 140-ecu annual licence fee, but many still hold the BBC in enormous affection.

Across the EU, every member state has its own equivalent public service channels which perform similar roles to the BBC and they are jealously guarded by governments and citizens alike. They are the guarantee, in theory at least, that broadcasters meet the social needs of their viewers.

This is why Competition Commissioner Karel van Miert was savaged by member states and television executives when he weighed into the debate over how public service broadcasters are funded last month.

Van Miert is drawing flak after asking officials in the European Commission's Directorate-General for competition (DGIV) to prepare a 'discussion paper' on the issue, setting out how the Commission should, “in general”, handle complaints that some broadcasters receive excessive subsidies to carry out their public service remits.

Van Miert knew this was a sensitive area. However, he had no choice but to act. In September, the European Court of Justice criticised the Commission for dragging its feet for too long in ruling on a case involving alleged excessive state aid to Spanish public service channel RTVE. RTVE's private sector rival Telecinco lodged its complaint in 1992 and is still waiting for a decision.

A slate of other similar cases is also pending as the Commission hesitates over its approach to the politically charged TV funding debate.

The BBC itself has been the subject of a complaint from media tycoon Rupert Murdoch, who argues that the corporation's News24 cable news service competes unfairly with his Sky News.

Van Miert said the Commission would concentrate on broadcasters which soaked up a portion of the scarce advertising revenues in some member states while, at the same time, receiving government money to fulfil their public service obligations.

The BBC's fans can breathe a sigh of relief. The corporation's funding by licence fee means it is unlikely to be targeted by the Commission, although DGIV wants to ensure that public service channels' commercial ventures, such as News24, are not cross-subsidised with publicly raised cash.

The logic behind the paper is to offer a uniform approach to the issue and ensure that private channels, whose only source of funding comes from the market-place, do not lose out unfairly to their public service rivals. It states that the cash which broadcasters receive from the state has to be in proportion to the obligations which governments set them, and warns that any extra funding beyond this level “might” be treated as state aid.

Crucially, it also implies that channels will have to fund their forays into expensive markets for sports rights and entertainment shows from the commercial revenues they earn fairly and squarely from advertising. The paper argues that such programming should not, in general, be counted as part of the public service element.

It was this part of the document which prompted the biggest backlash from public service broadcasters and governments alike, who claim that the Commission is seeking to act as programme controller. They argue that the institution cannot interfere in the way a member state defines a broadcaster's public service remit and cannot determine the funding models which are used.

This, they claim, is enshrined in the Amsterdam Treaty in a special protocol designed to protect services in the public interest. National experts told Van Miert as much at a special hearing with the Commission to discuss the paper in mid-October. “A majority of member states favour a case-by-case approach to having guidelines,” admitted Van Miert after the meeting.

The reaction to DGIV's efforts was fiercest in Germany, where public service channels fall into the 'dual-funded' category, benefiting both from advertising revenue and state aid, which most aroused DGIV's concern.

German Social Democrat MEP Helmut Kuhne's response was typical. “The EU treaty does not allow, by any means, the Commission to define what is, content-wise, the public service remit,” he said. “There is no need for these general guidelines. If you look at the cases, you will see that they differ so much that there is no common denominator.”

But Kuhne, who is also a member of the supervisory board of public service broadcaster WDR, believes the DGIV paper will now be quietly shelved. “I am happy to hear from some sources that it is dead and buried,” he said.

Van Miert is expected to meet private sector TV executives later this month to hear their side of the story. However, it is now thought unlikely that the Commissioner will pursue an approach from which even he has started to distance himself.

If the Commission wants to draw up a subsidy code at all, many argue it could do worse than build on the recently published proposals drawn up by a think-tank set up by Audio-Visual Commissioner Marcelino Oreja.

His high-level group of industry representatives proposed a more pragmatic approach to the issue by insisting that state hand-outs should be strictly “proportional” to - and not more than - the costs of fulfilling public service remits.

However, governments would be free to define exactly what this meant and channels would have to issue separate accounts for the purely commercial and public service sides of their activities. “This is necessary to avoid public sector funds being diverted to commercial activities,” said the report.

On the face of it, Oreja, who runs a relatively weak department within the Commission, is not well-placed to take on the might of DGIV. But, say critics, while Van Miert's officials lack an appreciation of political realities, the Spanish Commissioner's think-tank was carefully chosen for the breadth of opinion amongst its participants. These included commercial TV executives such as Jan Mojto of Kirch Group and Albert Scharf, president of the European Broadcasting Union (EBU), which represents public channels.

That those on either extreme of the debate found a consensus means that Oreja now has the chance to seize the initiative. He can claim to have a solution which pleases all sides and yet is tough on channels which abuse their position in the market.

Oreja clearly believes he now has a key role to play in the debate. He told an EBU conference last week that he was preparing a joint paper with Van Miert which would be presented to culture ministers at their next meeting on 17 November.