She first announced her will to focus on the potential review of the 2001 Broadcasting Communication (BC), which is a relevant matter for the entire media industry. She believes the media sector is one of the few sectors of the economy having such an importance for civil society.

She explained that the EC had to ensure that well targeted State aid helps achieving public goals without causing market distortions. In this regard, she reminded the audience that while there are strict rules for the granting of an aid, the current system is flexible: for instance, the EC does not interfere in programming decisions since EU Member States (MS) are to determine how to better serve the social, democratic and cultural needs of their society.

Before any State aid can be granted to a Public Service Broadcaster (PSB), it should abide by three principles that are laid down in the 2001 BC:

• A clear definition of public services that a PSB should perform to receive State aid.
  
• Entrustment and control. Are the PSBs officially entrusted by the MS to provide these services? And are these properly controlled?
  
• Proportionality. The aid should not affect the development of cross-border trade in a way that it would be contrary to the Community’s interests.

Since the launch of the BC, media markets have dramatically changed, therefore the EC should adapt to this new situation. Already in 2005, the EC State Aid Action Plan set out the need to review the existing instruments.

The next initiative the EC took was the launch in January 2008 of a public consultation regarding the review of the BC; the latter generated the interest of more than 120 entities from 16 MS. Mrs. Kroes announced today’s publication on the EC ‘s website of the non-confidential replies to this consultation together with a short summary. She also gave an overview of the outcome of the consultation. MS have different views about the need to review the BC and many of them are opposed to the reform because they believe the current rules work out fine. She added, “that virtually all public broadcasters are opposed to any change to the existing framework”.

In the next months, the EC will assess the potential areas of improvement for the BC. One of the key issues concerns the definition of the public service mission of PSBs. There is a consensus on the fact that MS should take the responsibility of providing a clear definition of public service missions coping with the new media environment. In this regard, the public consultation revealed that this duty could be better ensured by a revised BC. 

Another important issue in the consultation was the consistency of the BC with the General Framework for Services of General Economic Interest (SGEI) that was adopted in 2005. Therefore, the EC asked the following question in the consultation: “Should public service broadcasters remain subject to different requirements of transparency and proportionality as those applying for utilities such as electricity companies and public transport companies?” PSBs tend to be in favour of the difference of requirements while other market players would generally support alignment. It has been argued that it would be worth reviewing the consistency of the BC with the General Framework for SGEI. The EC has already taken a first step by aligning some elements of the broadcasting sector to the General Framework for SGEI.

Moreover, while the EC provides some guidance on the control of the remit, there is still little information on the control of proportionality and overcompensation. These issues were pointed out in the consultation by private broadcasters and other stakeholders that regret the legal uncertainty (especially with regard the extension to new media).

She finally said that this consultation has been an important step but that the EC is still assessing whether reviewing the BC would be the appropriate choice. In the end, the EC considers the Amsterdam Protocol as a serious basis cutting both ways; she added that stakeholders should keep in mind an important aspect of the Protocol: each MS is required to have a certain measure of restraint taking into consideration that distortions of competition contrary to the Community’s interests are not allowed.

Next steps:
- Assessment of the potential areas of improvement of the BC by the EC in the coming months.
- Conference on November 21st, 2008 on: “The new approach to State aids - recent reforms under the State Aid Action Plan and next steps” in Brussels (chaired by Commissioner for Competition Neelie Kroes).

To access Neelie Kroes’ speech, please click here.
To access the 2001 Broadcasting Communication, please click here.
To access the public consultation regarding the 2001 Broadcasting Communication, please click here.
To access the results of the public consultation on the 2001 Broadcasting Communication and the summary, please click here.