EU to review public service broadcast rules
Published: November 3 2008 04:03

Public service broadcasters in Europe could get more freedom to charge for services and build up reserves to expand their activities under proposals due to be unveiled by Brussels this week.

But the European Commission is also suggesting that there should be tight controls on these activities, and urging so-called PSBs to separate clearly their public service and non-public service activities, both in accounting terms and at an organisational level.

The Commission’s proposals come in a revision to the 2001 guidelines for applying EU state aid rules to public service broadcasting.

These have become increasingly outdated as technologies have changed.

With more distribution options available – from mobile TV to video on demand – broadcasters generally have been keen to diversify. But that has led to a rise in complaints to Brussels from commercial operators about some of the activities of the PSBs.

Issues of cross-subsidy, and the alleged use of public funds – or state aid – to fund online ventures have been particularly prevalent. Disputes have arisen in several countries, including Germany, Ireland, Belgium, Austria and the Netherlands.

On Tuesday the Commission is due to unveil its proposed revamp of the rules – which, in turn, will open the way for public consultation and the adoption of new guidelines next year.

According to a draft of the proposals, seen by the Financial Times, Brussels is suggesting that PSBs should be able to charge directly for services, as part of their social remit, in certain limited circumstances.

“A direct remuneration element in services provided by a public service broadcaster does not always mean that these services fall outside the public service remit,” it says.

But the new rules also say that “a special vigilance” will be needed to patrol such services, and they specifically rule out pay-per-view for popular sports fixtures which have been acquired or funded with public money. Instead, they cite “particularly advanced features of the public service” as the type of situation where direct charging may be appropriate.

The proposed guidelines suggest that PSBs should be allowed to keep reserves of up to 10 per cent of the annual budgeted expenses of their public service mission if these are specifically earmarked for non-recurring major investments. The investments must be related to the public service mission and the reserves should be used within four years.

But member states will be charged with ensuring regular, independent scrutiny of the level and use of reserves, to prevent overcompensation or cross-subsidisation.

And the proposed rules stress the need to account separately for a broadcaster’s public service and non-public service activities, although they recognise possible problems on the cost side, and also recommend an organisational divide.

(Source: FINANCIAL TIMES Europe )