The EC will present a first draft of the new BC after the summer and discuss it with all MS in a multilateral conference. The views of the citizens, public and private broadcasters, and other stakeholders will be taken into account as well. The EC aims at presenting its new BC in the first half of 2009.

Mrs. Kroes first announced the upcoming informal meeting of the Ministers of Culture and Audiovisual Affairs to be held in Versailles on July 21st and 22nd, 2008. She then explained why the BC had to be amended. The point of reference for the EC has been the 1997 Amsterdam Protocol: it enshrines the EC State Aid policy in the broadcasting sector. However, in the past seven years, the media markets have considerably changed in the EU. There were technological advances (such as digitization), driving convergence and changing consumption patterns. Public and private broadcasters have thus adapted and expanded their activities to new distribution platforms.

However, certain public broadcasting initiatives have led to complaints from the private broadcasters’ side in regard to the Public Service Broadcasters (PSBs) remit: for instance they fear that State Aid may be used excessively to fund on-line activities of PSBs (chat rooms, online dating clubs). A lot of issues are arising such as how to define the limits of using State Aid in the new media. The current BC does not provide the answers; therefore the EC launched a public consultation to know whether the BC should be reviewed. The 120 replies received mainly warned the EC about the uncertainty of the market.

To cope with these issues, Mrs. Kroes presented four principles that will be the EC’s guidelines in modernizing the BC:
- Give full value to the Amsterdam Protocol
- Strengthen the principle of subsidiarity
- Enhance the flexibility of the existing regulatory framework
- Apply a more effective control at national levels

In order to give full value to the Amsterdam Protocol, PSBs should have fair funding to achieve their fundamental role in society; at the same time he Amsterdam Protocol states that public funding “may not affect trading conditions and competition in the Community to an extent which would be contrary to the common interest”. Mrs. Kroes stressed the need to have a better definition for the public mission of broadcasters where they enter new media markets.

Furthermore, more subsidiarity is required: Mrs. Kroes emphasized the importance of having a better assessment of public value and market impact at national level, and not at EU level. She believes Member States (MS) can achieve this with the “public test value” applied to the BBC. MS would have to cover both elements of the Amsterdam Protocol: public value and market impact. She underlined the necessity for MS to apply this test before the new service has started, and to take into account the stakeholders’ and citizens’ views before taking any decision.

The BC also lacks flexibility as regards reserves and the national entrustment mechanisms. In the EC public consultation, PSBs stated that they must build up reserves to save money for large investments (such as digitisation of existing channels), but the current BC applies a strict net cost principle. It means that a public broadcaster commits to pay back public funds when exceeding the cost of the public mission provided. On the other hand, the 2005 Services of General Economic Interest (SGEI) Framework states that public utilities can as a rule, keep reserves up to 10% of their annual compensation. Given the current markets developments, the EC would be advised to extend such benefit to the BC; the PSBs would also be subject to the transparency safeguards foreseen in the SGEI Framework. Moreover, she underlined the need to apply more flexibility as well for the national entrustment mechanisms. The current BC stipulates in this regard: “whenever the scope of the public service remit is extended to cover new services, the definition and the entrustment act should be modified”. However, many MS keep licence agreements in force for 4 or 5 years; therefore PSBs could be prevented from launching new media activities if these are not mentioned in the licence agreement. A reviewed BC could contribute to cope with this issue.

The last principle concerns the more effective control mechanisms that are needed, once again to be achieved on the national level. A few weeks ago, the Court in Luxemburg has advised Portugal to put in place better control procedure in order to make sure that its public service broadcaster – in this case “Rádio e Televisão de Portugal” (RTP), fulfils its mission. The Court has told the EC to verify the effectiveness of the control mechanism. For Mrs. Kroes, it is clear that this case applies to all EU MS

 In the meantime, on July 17th, 2008, the EC has approved a €150 million aid to the French public television: “France Télévisions”. The measure’s aim is to enable public channels to fulfil their general interest mission by counterbalancing the reduction in commercial revenues, following the decision to withdraw advertising on these channels. The EC believes it is a justified aid given the net costs that these specific missions involve, and the French authorities’ commitments regarding control of the funds. In this regard, Mrs. Kroes said: “The EUR 150 million capital injection should enable France Télévisions to fulfil its current tasks while the reform measures are under discussion”. However, this decision is unrelated to the current discussions on new types of public financing planned for France Télévisions, which will have to be notified at a later stage to the EC.

Next steps:
- Presentation of the first draft of the new Communication after the summer 2008.
- Multilateral conference organized by the EC with all MS to discuss this first draft and consultation of stakeholders
- Presentation by the EC of the new BC in the first half of 2009

To access Mrs. Kroes’ speech, please click here
To access the article on France Télévisions, please click here
To access the 2001 Broadcasting Communication, please click here
To access the Court of First Instance judgment regarding RTP, please click here