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Bulletins Story:
EC COMMUNICATION ON STATE AID AND PUBLIC SERVICE BROADCASTING:
WILL THE BBC LOSE ITS SELF-REGULATORY ROLE?
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Date:
09.11.2001
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Ever since the founders of the Common Market agreed to treat the
public and private sectors in a broadly similar way under the
competition rules, George Orwell’s observation in Animal Farm that
some animals are more equal than others has seemed pretty much in
point. However, in its Communication this week on state aid
and public service broadcasting, the EC finally appears to be
recognising that private sector broadcasters cannot compete
adequately with public service broadcasters and that something must
be done to bring about genuine equality.
As far as defining the scope of the public service remit is
concerned, the Commission’s attitude is “hands off”. However,
when it comes to supervision of the public service broadcaster’s
compliance with its obligations, the Commission believes that
supervision only “seems effective if the authority is
independent.” In the absence of such independent supervision
(and authorisation), the Commission will not give the public
service broadcaster exemption from the competition rules.
Thus, unless the BBC submits itself to OFCOM regulation, it looks
as if it will be subject to the full panoply of competition powers
exercisable by the Commission.
This is a very powerful stick to wave. Once the
self-regulating public service broadcaster is within the EC’s
competition jurisdiction, it is treated just like any other private
sector concern. It does not get the benefit of any of the
limited competition law tolerance that is available to companies
entrusted with the operation of services of a general economic
interest.
But even if the BBC submits itself to OFCOM, the Commission’s
attitude to it will become more critical. According to the
Communication, the Commission is likely to penalise cross-subsidy
of non-public service activities which has the effect of reducing
the revenue of competitors. This is something that private
sector broadcasters have always complained about.
Generally, the Commission will listen to arguments that state
aid helps achieve competitive balance and prevents markets from
becoming dominated by pay TV operators. However, this goal
will not be allowed to excuse anti-competitive behaviour.
The Communication should be welcomed by private sector
broadcasters: it could actually mark the beginning of genuine
equality in Animal Farm.
Full text of the communication is available at www.europa.eu.int/
Stephen Hornsby
9th November 2001
96
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