After Commitments Commission Accepts Funding Scheme for Public Service Broadcasters
About two-thirds of the funding of the Dutch public service
broadcasters comes out of public means. Public funding has to
comply with the European rules for State aid. In brief, public
funding of the public service broadcasters is only allowed as far
as these means are necessary to fulfill the public service remit.
If more funding or funding for other tasks is granted to public
service broadcasters, this may be forbidden State aid. Commercial
broadcasters could be the victims of this, for example. This is the
reason why approval from the Commission is required for the funding
scheme for public service broadcasters as drawn up by the Dutch
Government.
New Regulations and Approval of New Funding
Scheme
The Netherlands have been the subject of criticism from the
Commission for some time because of poor compliance with the State
aid rules. One of the reasons for the criticism was that commercial
broadcasters complained to the Commission about the unclear
description of the public service remit of the public service
broadcasters, especially with regard to new audiovisual services,
and the disproportionate nature of the funding. It was partly
because of this criticism that the Dutch Media Act was amended at
the end of 2008, when the Media Act 2008 was introduced. However,
this was not enough.
Recently the Commission has published its new Communication on
the application of State aid rules to public service broadcasting
(OJ C 257/01) to which the funding of the
Member States has to comply. The changes compared to the former
communication relate in particular to new developments:
- Significant new services launched by public service
broadcasters must be subjected to an ex ante check, including a
consideration between the impact on the market and the value
for society;
- More clarity has been given on the extent to which pay
services can be part of the public service remit. The
remuneration element in pay services can be related, for
example, to the duty of broadcasters to pay network
distribution fees or copyrights;
- There is more actual supervision on possible
overcompensation; and
- The Commission is able to exercise more supervision on the
fulfillment of the public service remit, because Member States
have to define clearly what the public service remit includes,
and there has to be a clear and appropriate separation between
public service activities, and non-public service activities,
including a clear separation of accounts.
This Communication is (partly) a codification of the decisions
of the Commission on the funding of public service broadcasters
during the past years.
In view of these tightened measures, it has been unclear for a
long time whether the Commission would agree to the way in which
public service broadcasters are funded in the Netherlands. During
the consultation phase of the new Communication, the Netherlands
have been lobbying hard against the introduction of a market test.
Although the Dutch regime now appears to have been approved, it
first had to be amended as insisted by the Commission in its
decision of 26 January 2010.
For example, the public service remit will become more detailed,
also in the field of mobile telephony and online services and other
new media activities. New media activities, including pay services,
must also be subjected to a prior test before they can be
designated as a task to the public service broadcasters. This test
has to take place in a transparent manner and, for example,
commercial broadcasters will be consulted. The consideration
desired by the Commission between the market effects of the new
audiovisual services and their value will also have to take place.
This is an important step. To date, the Netherlands have refused to
perform such a test. In addition, the compensation will not be
allowed to exceed the amount necessary for the fulfillment of the
public service remit. Incidentally, the Court of Amsterdam ruled on
22 January 2010 (AWB 08/140 WET) that the regime for side tasks
such as theme channels, as was applicable until 1 January 2009, did
not meet the rules for State aid. The distinction between side
tasks and main tasks does no longer exist, but the substantive
review has not been changed since then.
The former Minister Plasterk and the former European
Commissioner Kroes have expressed their contentment with the result
achieved. Plasterk: "I am happy that - after years of
negotiations - we have reached an understanding with the European
Commission. The broad multimedia task of public service
broadcasting is still standing"
(news report from the Ministry of Education,
Culture and Science (only in Dutch)). Kroes stated that:
"The new regulation will ensure more transparency,
proportionality and accountability, and will enable the public
service broadcasters to perform their public service remit while
public funding will be limited to what is strictly
necessary."
(News report of the European Commission,
IP/10/52.
Closing Remarks
The accepted funding regulation seems to be in line with the new
Communication of the Commission. However, the Netherlands have had
to make commitments by explicitly giving commercial parties the
right to be heard and by accepting that they are obliged to carry
out a market test for significant new services, before the public
service broadcasters are granted permission to engage in new media
activities. The market test must be implemented immediately. We are
very interested to see how the (next) Minister will deal with this
in practice.