| Policy Statement on PSBs |
|
|
|
7 July 2000 - AER POLICY STATEMENT CONCERNING THE FINANCIAL TRANSPARENCY AND ROLE OF PUBLIC BROADCASTERS Executive Summary The Association of European Radios (AER) wants to participate in the debate concerning the financial transparency of public broadcasters and their role in the communications world.
The Association of European Radios (AER) is a Europe-wide trade body representing the interests of private commercial radio operators in France, Germany, Greece, Italy, Portugal, The Netherlands, Spain, Sweden and the UK. AER's main objective is to develop and improve the most suitable framework for private commercial radio activity. AER closely follows EU initiatives and actions in the fields of media, telecommunications and private radio transmission, in order to contribute to relevant debate and, to enrich and develop the radio sector. I. The “Transparency Directive” This policy statement follows the Commission’s publication of the draft Directive amending Commission Directive 80/723/EEC on the transparency of financial relations between Member States and public undertakings, that opened a consultation period in which AER participated through a written submission on February 2000. AER welcomed the publication of the draft Directive because we believe that only by forcing those operating in the public sector to publish separate accounts will anti-trust authorities spot abuses and rule on complaints under the EU’s competition law. As we have stressed in the past, AER believes that all public radios should be included in the scope of this draft Directive and no exemptions should be made. For this reason, we are disappointed with the position expressed by the European Parliament on this issue. The Parliament states in point 7 of its Resolution, adopted on May 2000, that “believes that the new transparency rules should apply to public broadcasters where they operate outside their public service remit, whilst emphasising that government funding of such broadcasters, granted for the fulfilment of their public service remit, is permitted by the Treaties…” In our opinion, the Directive should apply to public broadcasters both where they operate inside and where they operate outside their public service remit. We find it unacceptable that these entities should not be entirely publicly accountable and transparent when they enjoy anti-competitive benefits of unchecked cross-subsidy, cross-promotion and state funded risk investment. AER respects the role-played by public broadcasters, provided that they maintain a commitment to their particular objectives and do not interfere with the free market or abuse their dominant position. This brings us to the definition of the public service remit. Following the Amsterdam Protocol, Member States should clearly define public service remit and the objectives of public broadcasters. A clear definition does not exist in most EU countries. This provokes confusion, distorts the markets and prevents the Commission and the Court of Justice from effectively applying EC competition rules. Furthermore, in AER’s view, if Member States are responsible for defining the public service remit, the Commission should be responsible for ensuring that public operators meet the objectives required. Therefore, as we said earlier, we believe that the draft Directive should provide the Commission and the Court of Justice with an efficient instrument that guarantees fair and effective application of the competition rules to public broadcasters. This is particularly important now that the French EU Presidency is planning to re-launch the debate on the role of public broadcasters. Unfortunately, private radios are not allowed to participate in the Conference that is being organised on the 19th July in Lille since it is exclusive to public broadcasters. We deeply regret this. In our view, the debate should be open to all parties if it is to achieve a democratic outcome. We trust that the European Commission’s services, as a neutral body, will pass our message across during this event. In the coming pages, we provide further evidence that justify our requests for:
II. Services of general interest AER has always supported the European Commission in its Communication entitled “Services of general interest in Europe” in which radio services are included and considered as “services of general interest”, without any distinction between public and private radios. AER believes that all radios, public and private, participate in the same way in the objectives of pluralism, ethics of information, respect of moral and democratic values, protection of the individual, as well as the promotion of consumer interests. Private radio, no less than public radio, must satisfy listeners’ choice and information requirements. Our large audiences in Europe support this. To describe this, we have chosen two countries - the UK and Italy – which have different cultural realities, to show some concrete examples of services of general interest offered by private radios. In the UK, Classic FM broadcasts nationally classical music and programmes about classical music and arts; TalkSport is a national station broadcasting news and sports coverage and discussion and Virgin offers pop and rock entertainment services. Furthermore, there are 243 local services in the UK. They include music based services providing entertainment and information for listeners in particular geographical areas and others with formats designed to offer 24 hour non-stop news, jazz, religion, services for minorities (Greek, Arab, Asian, Italian, Afro Caribbean) and other listeners of different ethnic backgrounds, etc. Digital only commercial radio services include services for the over 50s, non-stop travel information and plays and stories. In Italy, private radios also offer many services of general interest. Radio Radicale has been offering for years, daily information about the Italian Parliament’s activities and about important judiciary processes. Radio Maria (without any revenue from advertising) supports the Catholic religion and produces special programmes for elderly and infirm people. RTL 102.5 provides traffic information at a national scale. Radio 24 is the only Italian radio that offers news and talk without any interruptions for music. In the past ten years, RAI – the public broadcaster - has announced several times its intention to offer a similar service but has not done so. Many private national and local radios, in total approximately 7 national and 300 local, offer news services during more than 25% of their programmes’ time between 7 a.m. and 8 p.m. every day. Furthermore, private radios in Italy promote many social campaigns on important matters for society. III. Advantages of public radios AER wants to draw attention to various advantages enjoyed by public radio so that EU institutions can take them into account when considering the roles played by private and public radios. Historically:
IV. The situation in some European countries: Unfair practices European private radio has long been calling for a level playing-field for private and public radios and has requested greater transparency of the finances of public broadcasting. Problems with public broadcasters differ in nature from country to country. Some concrete examples follow. France In France, the public broadcaster Radio France has just announced its intention to present to the CSA a new plan (so called the “plan bleu”) that proposes a complete restructuring of its networks. The plan foresees the abandonment of stations such as FIP and the launch of two new national networks, which will change the radio landscape in France dramatically. The first network will offer music programmes targeted at adults with content absolutely similar to that already offered by private stations such as RFM, Nostalgie, Chérie FM or RTL 2. The second network will target young audiences (le Mouv’) and offer a music programme comparable to the private stations’ product – Fun, NRJ, Skyrock for example. This is not sensible use of public funds. French private radios have shown their opposition to this project. It jeopardises the existing balance and pluralism in the French radio 7 panorama and contradicts the mission of the public broadcaster as it is expressed in its “cahier des charges”. Radio France should continue offering the complementary and distinctive services that have justified up until now its public funding. Citizens will gain nothing from having Radio France reproducing private radios’ programmes. Radio France should not be allowed to change its formats and outputs at will, while private radios must adhere to particular formats. Germany In Germany, private radios find it difficult to compete with public broadcasters due to public radios’ advantages and their structural complexity which lacks real financial control. The financial statements presented by public broadcasters ADR and ZDF to the KEF (the Commission responsible for establishing the financial needs of public broadcasters) are not clear particularly regarding the outsourcing of private subsidiary companies that carry out different activities (i.e. marketing, advertising, licensing, etc.) for public broadcasters. These companies are partly funded by the State; therefore the KEF should be able to evaluate how they are funded. There are other problems in Germany, such as the expansion of public broadcasters into multimedia services without any relation to their public service remit, but the main problem remains the lack of transparency in the public broadcasters’ accounts. Italy In Italy, the public broadcaster RAI has taken the decision to carry out commercial activities while maintaining its privileges of public entity. A holding has been created to break up the different activities in different companies that will compete in the open market. For example, RAI Way is the new carrier company that is in charge of network operations. They are advertising its forthcoming privatisation (only up to 49% of total stake) and, while maintaining their public service’s privileges, are offering services in open competition with private companies. In particular, RAI Way benefits from frequencies, transmitters and infrastructure usage for an indefinite period of time, while private operators have limited licences. This situation becomes more serious because there are no systems of control. Concerning the development of digital radio, a complaint was presented to the Communications Authority by private radios, which denounced that RAI had used public funds allocated for this purpose to develop other services, without respecting the contract that had been signed with the Italian government. The Communications Authority has declared itself non-competent for ruling this case and has sent the dossier back to the Ministry for Communications. Since the Ministry is owner of the public 8 broadcaster and at the same time is responsible for its public funding, its ruling on the case does not offer to private radios any guarantee of either observance of competition rules or a transparent use of public funds. This situation is blocking the development of digital radio, in which Italian private radios are investing very large funds. Sweden In Sweden, radio regulation clearly favours public broadcasters. Sveriges Radio (SR) dominate the Swedish market, while private broadcasters have been restricted from creating ad hoc networks. The Netherlands In the Netherlands, public radios (5 national channels) are granted the best frequencies covering up to 100% of the national territory while commercial radios are only awarded frequencies to cover 70%. Furthermore, public terrestrial frequencies are planned on a different basis to commercial radio frequencies. The result is that public radios use many more frequencies than necessary. If public radio was planned on the same basis as commercial radio then at least two more national frequency packages could be made available for commercial use. The Dutch government has decided to auction all frequencies to commercial operators, while public radios will get the best frequencies for free. For TDAB (Digital Audio Broadcasting), public radio as the only user gets frequencies for free with national coverage and with more space than they need for their five channels. Commercial radio again faces auctions and can only bid for regional rather than national frequencies. Public radios in the Netherlands carry advertising. Public broadcasters are “double funded”; experts know that the amount of advertising revenues they get is enough to cover at least the costs of the five public radio channels. These costs are not transparent and an insight of these costs is refused. The sales organisation of the Dutch public radio (STER) is the most dominant agent in the market with a share of 41% (on advertising). That market share and the fact that only public radio can offer national coverage to advertisers allows public radio to set the price for radio advertising in the market. Commercial radio can only follow the STER and ask for lower prices. United Kingdom In the UK, the publicly funded broadcasters’ services are paid for by licence fee without commercial funding. This is good. However, the BBC is the only UK media company that is allowed to have national radio, national television, local radio and magazine publishing interests. This gives it a well-promoted, dominant brand which the highly regulated, terrestrially transmitted commercial sector cannot match. The BBC is self-regulated and can change its formats and outputs at will. The commercial sector is independently regulated and must adhere to particular formats. BBC Radio has been able to change one of its five national channels from serving older listeners to one serving younger listeners without any constraints. This has proved disadvantageous to the commercial sector which does not have these freedoms.
Association of European Radios (AER) |
| < Prev | Next > |
|---|
