Key Messages on the Broadcasting Communication Review

12 February 2009 – AER’S POSITION ON THE REVIEW OF THE COMMISSION COMMUNICATION ON THE APPLICATION OF STATE AID RULES TO PUBLIC SERVICE BROADCASTING (BROADCASTING COMMUNICATION)

AER supports firmly the review of the Broadcasting Communication and its application to all broadcasting services including radio. Indeed, since 2001, there were important market developments, with public service broadcasters (PSB) expanding services in new markets in which commercially-funded radios invest with high risks. AER has nevertheless concerns regarding the draft revised Communication published by the European Commission in November 2008. The following points are crucial to ensure a healthy competition:

1. Clear and meaningful definition of the public service remit by legal act
2. Market impact assessment prior to any extension of the remit
3. Transparency: separation of PSB’s public service and commercial activities as well as cost allocation to profit centres
4. Independent control mechanism for ex-ante evaluation of activities as well as for the supervision of entrustment and for the evaluation of the financial behaviour.
5. Sanctions for breach of competition rules

1) There is a need for a clear definition of the public service remit through a legal act. Member States should have to define the public service broadcaster’s remit in a very specific and non-ambiguous way, establishing in advance a clear distinction between public and commercial broadcasters. It can be done, for example, by setting a list of eligible content (or non eligible) for public service broadcasting.

2) Any extension of the remit (to new services e.g.) should be submitted to a market impact assessment before being carried out. This ex-ante evaluation, inspired by the Amsterdam Protocol, could lead to the exclusion of unnecessary new public service broadcasting services and thus reduce the amount of cases brought to the European Commission. Indeed, limits have to be set to avoid situations of fait accompli.

3) AER advocates a clear separation of PSB’s public service and commercial activities as well as cost allocation to profit centres. Transparency requirements include safeguards against cross-subsidization, overcompensation and anti-competitive practices such as price-cutting for advertising. PSB which enjoy dual-funding through both State funds and pay-services are able to artificially set low prices for advertising. To restore a healthy competition, AER supports the setting up of profit centres ensuring a strict separation between PSB’s public service and commercial activities.

4) For all these points, AER believes that an independent control mechanism for ex-ante evaluation, the supervision of entrustment and the evaluation of the financial behaviour has to be put in place in every Member State. This body should be independent, and ideally, external from the public service broadcaster’s management, and have enough resources and power to systematically fulfill its missions.

5) It is essential that sanctions for breach of competition rules are applied in case of infringement of competition; i.e., efficient and timely procedures to put an end to anti-competitive behavior.

Contact: Vincent Sneed, AER Association Coordinator / EU Policy Advisor
vincent.sneed(Replace this parenthesis with the @ sign)aereurope.org