EU to debate whether the Internet has outmoded public broadcasting

In what could be a long, but fundamental, rethinking of the role governments play in subsidizing the public dissemination of information throughout Europe, the EU Parliament will begin considering a possible redrafting of regulations passed in 2001 regarding the role of public broadcasters -- which in Europe means the corporations subsidized by taxes or licenses rather than advertising. At issue is a new question brought about by the evolution of the Internet: As long as private entities are spending billions to make broadband and wireless information services available, why should public broadcasters get all the breaks and be subsidized to compete on the same level?

"It must be noted that commercial broadcasters, of whom a number are subject to public service requirements, also play a significant role in achieving the objectives of the Amsterdam Protocol to the extent that they contribute to pluralism, enrich cultural and political debate and widen the choice of programmes," reads the latest draft of an EU commission report (PDF available here). That report calls for public comment on the role of public broadcasters' subsidies, during a period slated to begin in July.

"Moreover," the report continues, "newspaper publishers and other print media are also important guarantors of an objectively informed public and of democracy. Given that these operators are now competing with broadcasters on the Internet, all these commercial media providers are concerned by the potential negative effects that State aid to public service broadcasters could have on the development of new business models."

Up until the 1980s, Europe's public broadcasters (for example, the British Broadcasting Corp.) were widely perceived as the caretakers of culture for their native countries. Commercial competitors, while encouraged, were often viewed as infusing prurient, objectionable, and gratuitous elements into popular media, leading to the image (however false) of a national culture that's consistently at war with what amuses people.

But the introduction of the Web led to a blurring of the distinctions between public and private media producers, such that the public itself appears to be neglecting to apply the usual distinction between the "cultural" side and the "popular" side. At this time last year, the European Commissioned opened up public comment for precisely this same debate, essentially asking whether there remains a class of media provider that's entitled to public assistance.

At that time, a public media advocacy group called The Open Society Initiative, in a submission that is likely to be repeated again this year, argued that any perception that it's the public broadcasters that have the advantage is a false one. As the OSI wrote, "All public service broadcasters today -- even those performing most successfully -- are caught in an unsustainable and vicious circle whereby on the one hand they need to justify their privileges by offering standard-setting output in mainstream strands, while at the same time also provide services that commercial rivals do not offer, notably in cultural, educational, children's, and minority programming."

Many public broadcasters have an intent to provide service over not just the Web, but the continent's growing mobile digital TV service. Should they qualify for state aid to do so, even though they may be making the same profit as commercial competitors? A controversial 2003 European court decision referred to as "the Altmark case" ruled that, mainly for diplomatic purposes (but also for appropriations bills), when a state government gives help to a public broadcaster or other utility to run its service, it's not officially state aid at all. In other words, think of it as the government fulfilling its civic duty, not running a media company.

But since the EU is made up of many nations, and since all those nations do business with one another, the fact that public broadcasters are media companies mean they must do business internationally. Case in point again: the BBC, which distributes the rights to one of the US' most popular TV shows, "Dancing with the Stars," and operates the commercial BBC America cable channel in the States. Those are both commercial deals; so whatever you choose to call the money the BBC receives, is it still entitled to it...especially since the commercial products in these cases are exports, and therefore not vital to its nation's cultural health?

"As the Court of Justice has observed: 'When aid granted by the State or through State resources strengthens the position of an undertaking compared with other undertakings competing in intra-Community trade the latter must be regarded as affected by that aid,'" reads this week's draft document from the EU commission. "This is clearly the position as regards the acquisition and sale of programme rights, which often takes place at an international level. Advertising, too, in the case of public broadcasters who are allowed to sell advertising space, has a cross-border effect, especially for homogeneous linguistic areas across national boundaries. Moreover, the ownership structure of commercial broadcasters may extend to more than one Member State. Furthermore, services provided on the Internet normally have a global reach."

So now, the question becomes whether public broadcasters are entitled to...something, when competing against private entities in international markets, as opposed to cultural affairs? If the tide of public opinion shifts in favor of market forces, member states could foresee a time when they spin off all or part of their interest in public broadcasters and Internet content providers, perhaps in acquisition deals with existing media giants. And then the whole question of reducing competition rears its ugly head again.