Broadcast Rulings At The Commission

Michael Hedges July 21, 2010 - Follow on Twitter

It was a big day for broadcasters at the European Commission, with two State aid decisions and one for Mr. Murdoch. The “lighter touch” is in evidence. All three decisions are “subject to conditions.”

Beginning early in the day (July 20), the European Commission (EC) approved funding plans for French public broadcaster France Télévisions and Spanish public broadcaster RTVE. In both cases the EC is satisfied “subject to verification” with compliance in State aid rules.

Last September the EC approved €450 million emergency State aid to France Télévisions after a new law came into effect reducing, at first, the public broadcasters advertising revenue stream. The EC then undertook an investigation into how further State aid might be spent. The decision concluded that the “definition of the public broadcasting mission vested in France Télévisions and the checks to which it is subject comply with the State aid rules and, in particular, with the Commission communication on State aid for the funding of public service broadcasters.” Between now and 2012 the total State aid package for French public television could add up to €1.5 billion.

The current France Télévisions decision has nothing to do with a separate but intertwined investigation into a tax plan to fund France public broadcasting. The government of President Nicolas Sarkozy has imposed a tax on both broadcasters and telecom operators. That, the EC ruled, is a possible infringement of internal markets rules.

Similar, but different, was the EC decision on State aid to Spanish public broadcaster RTVE. The EC is satisfied RTVE “will not get any exaggerated compensation for public broadcasting services" as its finance plan eliminates advertising in favor of direct State aid.  As for the plan to tax telecoms to pay for public broadcasting, the EC remains wary. The EC is less concerned by a tax on private sector broadcasters.

In both cases – France and Spain – the EC is satisfied the State aid is based on the broadcasters operating costs rather than the amount of tax revenue generated.

The EC decided in favor of pay-TV operator Sky Italia, owned by News Corporation, which sought relief from an Italian government decision preventing it from bidding on a digital television multiplex. The government of Silvio Berlusconi opposed as did Mediaset, the media company owned and operated by the Berlusconi family. Sky Italia has agreed, if successful in its bid, to operate its digital channels free-to-air for five years.

The EC statement noted how much the Italian television market has changed over the last few years and, too, how the tender for five national digital TV multiplexes is a “unique opportunity – and the last one for many years ahead.”  Mediaset indicated it would appeal the EC decision.

Totally different, but similar, was the EC decision on Sweden’s newspaper subsidy scheme. The Swedish government modified and “significantly reduced” the newspaper subsidy after competitors complained to the EC.

“Despite the recent development of online news, traditional newspapers are still important for media pluralism and for the cultural, democratic and public debate in Europe,” said Competition Commissioner Joaquin Almunia in a statement (July 20). However, running a newspaper is also a commercial activity and the Commission has a duty to prevent undue distortions of competition and trade resulting from public subsidies. I am convinced that in the present case, we have found a solution that strikes the right balance between these two, equally legitimate, objectives."

And now Commissioners and Commission staff can drift away for the summer holiday.

See also in ftm Knowledge

Competition Rules and Competition Authorities

Fair or unfair, the media marketplace invites the microscope of national competition and cartel authorities as well as the European Commission. This ftm Knowledge file details the upsand downs of mergers and acquistions questioned and sometimes quashed. How media competes is defined by the rules and sometimes fears. Includes 31 articles, resources. 61 pages PDF (November 2008)

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