WRITTEN QUESTION E-3475/02

by Benedetto Della Vedova (NI) to the Commission

(6 December 2002)

Subject: State aid for public broadcasting companies

The existence of a public broadcasting service can be justified in that it gives viewers and listeners programmes not otherwise provided by existing commercial channels.

Broadcasting is not exempt from the application of Articles 86, 87 and 88 of the EC Treaty relating to competition and while the Protocol to the Treaty of Amsterdam on the system of public broadcasting reaffirms the power of the Member States to provide for the funding and define the role of public service broadcasting, it does so on condition that such funding is granted for the fulfilment of the public service remit as conferred by each Member State, insofar as such funding does not affect trading conditions and competition in the Community to an extent which would be contrary to the common interest and with regard to the need to preserve media pluralism.

The definition of public service in the service contract between the Italian Government and RAI appears to be at variance with the requirements set out by the Commission in its Communication on State aid for public service broadcasting, in that it is excessively general and much broader than is considered acceptable in the communication.

However, Article 1 of Directive 80/723/EC(1) on financial transparency requires clarity in the definition of public service and the use of public funds; Article 5 of the directive requires public broadcasters to make a clear distinction in their accounts between public activities and commercial activities in order to ensure that the latter are not financed with public funds.

A member of RAI's board of governors stated publicly on 21 September 2002 that RAI was unable to make a distinction between programmes financed by public resources and those financed by advertising.

The RAI licence fee cannot be construed as pre-existing aid which was in place before the entry into force of the EC Treaty and therefore not subject to the Treaty rules, given the radical changes that have occurred in the Italian broadcasting system.

Can the Commission therefore answer the following questions:

1. Has RAI introduced the separation of accounts required by Directive 80/73/EC, as the Commission ordered it to do last June?

2. Is it compatible with the separation of public service activities and commercial activities for programmes acquired with public funds to be interrupted by commercial breaks?

3. Is acceptable that Italy should have no independent broadcasting authority to monitor compliance with the public service obligations imposed on RAI?

4. Can the Commission evaluate the proportionality of public funding received by RAI?

5. Are the separation of accounts and compliance with the criterion of proportionality satisfied by public service broadcasters in the other EU Member States?

6. What are the reasons for the delay in starting and concluding the infringement proceedings in respect of State aid to RAI and several other European public broadcasters?

(1) OJ L 195, 29.7.1980, p. 35.

Answer given by Mr Monti on behalf of the Commission

(4 February 2003)

As regards the general issues the following remarks can be made.

The Protocol on the system of public broadcasting in the Member States, which was annexed to the EC Treaty by the Treaty of Amsterdam, recognises the role and the importance of public service broadcasting and confirms that the Member States are competent to define and organise the public service remit and its financing. The choice of the financing scheme falls within the competence of the Member State, and there can be no objection in principle to the choice of a dual financing scheme (combining public funds and advertising revenue) rather than a single funding scheme (solely public funds). This applies also to broadcasters whose entire programme spectrum of programs is deemed to be part of its public service remit.

The issues of separation of accounts and proportionality of public funding comes up in several broadcasting cases the Commission is dealing with, involving several Member States. The Commission is presently investigating these cases and it is therefore not possible to anticipate the answer to this question.

Regarding the necessity of an authority controlling the activity of the broadcaster entrusted with the general service mission, in the Communication on State aid to public service broadcasting(1) the Commission stated that: It is also necessary that the public service be actually supplied as provided for in the formal agreement between the State and the entrusted undertaking. It is therefore desirable that an appropriate authority or appointed body monitor its application. The presence of such an authority is a means for the Member States to ensure that the mission is fulfilled and at the same time it may facilitate the tasks of the Commission under the State aid rules. However, the absence of such an authority is not in itself an indication of incompatible aid.

Concerning the length of the Commission investigations in this sector, the Commission is assessing several complaints concerning State financing of public broadcasters. While the Commission was carrying out the analysis of these complaints, new legislative developments (such as the Amsterdam Protocol, the new Commission Communication on services of general interest(2) and the new Transparency Directive(3)) have occurred. The necessity to take into account these developments as well as the need to treat consistently the various cases has slowed down the investigation of the State aid procedures. In this connection the Commission has decided to draft a Communication on the application of State aid rules to public broadcasting which was adopted on 5 November 2001. Following the Communication, decisions have already been taken in cases involving Portuguese TV, Belgium local TV stations and BBC digital channels. Decisions concerning RAI and other broadcasters are expected to be taken this year.

As to the issues specifically relating to the RAI case, it can be emphasised that the investigation of the Commission is at an advanced stage. As soon as this investigation will have been completed, the Commission will take a decision dealing also with the points you are raising. Of course, the Commission position on these issues cannot be anticipated, but some remarks can be made. As to the issue relating to the existence of an appropriate authority or appointed body monitoring RAI's activity, RAI is, as to the knowledge of the Commission, subject to the control of a specific Parliamentary Commission and to the control of the Autorità per le garanzie nelle Comunicazioni. As to the issue of the evaluation of the proportionality of the public funding received by RAI, the Commission will carry out this assessment, in the framework of the pending State aid case concerning RAI, on the basis of the criteria set out in the above mentioned Communication of 5 November 2001. Finally, as to the separation of accounts, also this issue will be dealt with in the context of the pending procedure.

Also on this point the Commission decided in December 2002 to launch an action before the Court of Justice against Italy for non-transposition of the latest modification of the transparency directive.

(1) OJ C 320, 15.11.2001.

(2) COM(2002) 689 final.

(3) Commission Directive 2000/52/EC of 26 July 2000 amending Directive 80/723/EEC on the transparency of financial relations between Member States and public undertakings OJ L 193, 29.7.2000.