European Law Report - State funding of public broadcasting
Public service broadcasting has been under scrutiny in the EU for quite some time. This is due to the fact that broadcasting is a service as any other and therefore the normal rules of competition of the EC Treaty should apply to broadcasting stations,...
Public service broadcasting has been under scrutiny in the EU for quite some time. This is due to the fact that broadcasting is a service as any other and therefore the normal rules of competition of the EC Treaty should apply to broadcasting stations, independent of their commercial interests or public service mission.
Against this background, the financing of public broadcasting is regarded as being state aid that is only allowed under special circumstances in view of the idea and function of public service broadcasting. Public broadcasting, in fact, is considered a service of general economic interest, whose functions are not so much economic as political, democratic, social and cultural.
The media sector plays an important role in the Commission's state aid policy since European public broadcasters receive hundreds of millions of euros annually from direct government aid. Despite its importance, public funding of broadcasting is still regarded as state aid. Indeed, commercial broadcasters insist that state funding to public broadcasters distorts competition, and argue that while they have to rely on advertising for generating revenue, public broadcasters have an easier life due to the financial assistance received from the national state.
In view of this, the European Commission has recently published a draft Communication dealing with the application of European State aid rules on public service broadcasting. This draft Communication was published as a revision of the 2001 Broadcasting Communication with the aim of modernising it by enhancing legal certainty and by building on the fundamental principles applicable to the financing of public service broadcasting.
The communication will allow national broadcasters to better cope with new media and to meet successfully the new challenges of the new media environment, while maintaining a high quality and modern public service. The communication envisages that member states would retain discretion in granting financial aid towards public broadcasting, and member states would be able to extend the public service remit to new services as long as they have in place mechanisms to monitor the value and impact of such extension.
The Commission's proposal thus gives increased responsibility to member states. It acknowledges that it is primarily for states to assess through a transparent and accountable process the value for the public new services and their impact on the market. In all cases, the Commission will continue to penalise illegal state aid.
The draft suggests increasing flexibility for public service broadcasters by building up reserves. The new rules proposed by the Communication will allow public broadcasters more leeway in holding onto some revenues for critical times.
According to the new rules, public service broadcasters would be able to charge directly for services, as part of their social remit, in certain limited circumstances. Pay-per-view for popular sports fixtures which have been acquired or funded with public money have been ruled out. .
Member states and stakeholders have the opportunity to submit their views on the proposed text by sending their comments by January 15.
• Dr Grech is an associate with Guido de Marco & Associates and heads its European law division.
Against this background, the financing of public broadcasting is regarded as being state aid that is only allowed under special circumstances in view of the idea and function of public service broadcasting. Public broadcasting, in fact, is considered a service of general economic interest, whose functions are not so much economic as political, democratic, social and cultural.
The media sector plays an important role in the Commission's state aid policy since European public broadcasters receive hundreds of millions of euros annually from direct government aid. Despite its importance, public funding of broadcasting is still regarded as state aid. Indeed, commercial broadcasters insist that state funding to public broadcasters distorts competition, and argue that while they have to rely on advertising for generating revenue, public broadcasters have an easier life due to the financial assistance received from the national state.
In view of this, the European Commission has recently published a draft Communication dealing with the application of European State aid rules on public service broadcasting. This draft Communication was published as a revision of the 2001 Broadcasting Communication with the aim of modernising it by enhancing legal certainty and by building on the fundamental principles applicable to the financing of public service broadcasting.
The communication will allow national broadcasters to better cope with new media and to meet successfully the new challenges of the new media environment, while maintaining a high quality and modern public service. The communication envisages that member states would retain discretion in granting financial aid towards public broadcasting, and member states would be able to extend the public service remit to new services as long as they have in place mechanisms to monitor the value and impact of such extension.
The Commission's proposal thus gives increased responsibility to member states. It acknowledges that it is primarily for states to assess through a transparent and accountable process the value for the public new services and their impact on the market. In all cases, the Commission will continue to penalise illegal state aid.
The draft suggests increasing flexibility for public service broadcasters by building up reserves. The new rules proposed by the Communication will allow public broadcasters more leeway in holding onto some revenues for critical times.
According to the new rules, public service broadcasters would be able to charge directly for services, as part of their social remit, in certain limited circumstances. Pay-per-view for popular sports fixtures which have been acquired or funded with public money have been ruled out. .
Member states and stakeholders have the opportunity to submit their views on the proposed text by sending their comments by January 15.
• Dr Grech is an associate with Guido de Marco & Associates and heads its European law division.