EU funding policy angers Commercial broadcasters

Commercial broadcasters have lashed out at European culture ministries, which they claim are trying to prevent reform of the EU rules that govern the funding of their public sector rivals, such as the BBC.

In a letter to Neelie Kroes, EU competition commissioner, seen by the Financial Times, the commercial companies accuse certain EU governments of "attempting to derail the sensible proposals on state aid to public broadcasters" that were first published last year.

"In particular, it is worrying that the very member states who annually grant vast (if unquantified) sums of state aid should simultaneously seek to dictate the terms under which such state funding would be compatible with the EU treaty," they claim.

State aid to PSBs across the EU is thought to top E20bn ($26bn, £18bn) annually.

The letter - signed by the heads of five media associations representing TV and radio operators as well as newspaper publishers - comes as debate over the guidelines, which would clarify the extent to which aid to PSBs can be used for new media ventures, intensifies in Brussels.

The proposed changes would give PSBs more flexibility to charge for services and build up reserves. But they would also impose reinforced controls on their activities at national level, including assessments of the market impact and public value of new services.

At a parliamentary hearing earlier this year, the head of NPO, the Dutch public service broadcasting system, told MEPs that he was worried the new rules would push PSBs "from the mainstream into the margins". He warned that the scrutiny of new media opportunities could put PSBs into a straitjacket and force them to devote time and energy to negotiating new ventures with regulators.

Meanwhile, government representatives from some smaller EU countries - such as Ireland - claimed the assessment procedures were too prescriptive and could be costly to administer.

The latest counterblast from the commercial broadcasters does not name any particular countries as being obstructive. But the Netherlands is thought to be leading efforts to water down Ms Kroes' proposals.

Ms Kroes' officials have said they will review the matter in the light of comments received, and a new draft is likely next month. But they have also stressed that the existing 2001 guidelines, which apply state aid rules to the broadcasting sector, have become outdated as technologies have changed and broadcasters have diversified into news areas and delivery systems.

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