Europe rethinking role of public broadcasters

International Herald Tribune – March 27, 2006

Doreen Carvajal

 

This is a season when BBC television comedy clips can be viewed on British mobile phones and the state-owned German channel ARD is offering online video of the national Paralympics sled hockey team.

It is also a season when European regulators are signaling that they intend to reflect on the mission of public broadcasters, which are rapidly expanding beyond traditional roles in radio and television to become sophisticated sources of information in an endless variety of forms.

Since the 1990s, public broadcasters in almost a dozen countries have come under European Commission scrutiny because of complaints from commercial operators that the state-financed institutions benefited from subsidies that hampered free competition.

Two of the more recent complaints, involving public broadcasters in the Netherlands and Germany, raise questions about their forays into new- media activities.

German commercial operators complained bitterly when the public broadcaster ZDF struck alliances in Germany with T-Online to use its news program, Heute. In the Netherlands, the issue was whether online activities such as e-commerce and mobile telephone services constituted a public "service of general economic interest."

The outcomes could help set the stage for a revision of Europe's public broadcasting policy, which sets flexible standards for permitted state aid, like requiring national definitions of the public broadcaster's role and some form of independent national monitoring of those functions.

"It's not as if we intend to introduce some major shift in approach," said Jonathan Todd, a spokesman for the European Union's competition commissioner, Neelie Kroes. "It's rather that we will assess in 2007 whether, in light of the cases that we've been dealing with, it would be useful to further clarify the principles."

In Europe, where public broadcasting is financed by mandatory television licensing fees for all viewing households, commercial trade groups are worried about the trail blazing of state-financed networks into new territory that they are also trying to cultivate.

"Our members do not get much money from mobile television services," said Julia Maier- Hauff, a spokeswoman for VPRT, an association of private broadcasters in Germany, which lodged the original complaint against the public networks there.

"But they have to be present in the market so they take a high risk and we wonder whether public broadcasters need to be there first before anybody else can think of a valuable business model," she said. Trade groups are making similar complaints about the BBC, which faces an independent audit of its license fee bid this spring that will include a seminar for commercial operators to air their views.

The BBC's commercial arm, BBC Worldwide, reported recorded profits of £55 million, or $96 million, last year on sales of £706 million. Its money-losing new-media division recorded revenues of £26 million and is moving aggressively to exploit new commercial possibilities.

In February, for example, France Télécom's Orange unit struck a deal with BBC Worldwide to offer clips, photos and ring tones from BBC shows like "The Office" and "Little Britain."

The BBC has been testing a free "interactive media player" called IMP that allowed a trial group of about 30,000 users to download BBC TV and radio programs to their computers as long as a week after original transmission.

In turn, the commercial division is exploring the possibility of developing the IMP system into a commercial video and audio download business and also is pondering the possibility of charging international users for access to the BBC Web sites, according to Jennie Allen, a spokeswoman for BBC Worldwide. She noted, though, that "there is nothing concrete" to say about those plans.

Last week, the BBC's director of new media, Ashley Highfield, showed off the system - called MyBBCPlayer - for Web developers gathered in Las Vegas. But under new rules guiding the BBC, the Internet television player cannot make a debut for public use until regulators evaluate its effect on the institution's rivals.

Kroes, the competition commissioner, spoke openly in a speech this month about the "need to reflect on the mission of public service broadcasters in this new-media environment."

But some legal experts are not convinced that the commissioner will move to transform communication standards dating to 2001, which sought to clarify the precise role of public broadcasters and to create independent monitoring systems.

Daniel von Brevern, an antitrust expert in Düsseldorf with the Lovells law firm, said he did not expect major change. But he predicted that the commission would continue to press public broadcasters to define their public role more clearly and to submit to oversight.

"Public broadcasters are always crying that the commission wants to abolish public broadcasting, but what they're really afraid of is losing their independence," von Brevern said.

"Right now they are quite free to use public funds and they are obviously afraid to lose that ability."

Nico van Eijk, a law professor at the University of Amsterdam, said it was likely that the commission would simply offer more guidance on allowed activities for public broadcasters. But it would be difficult for them to say that new-media activities were not permitted, he said.

"I would think that the European Commission would get a huge political problem if they were unwilling to accept that," van Eijk said, noting that some countries like France or Germany would balk at limitations on public broadcasters.