EC revises rules on public funding of broadcasters

With digital switchover looming in most European countries, many broadcasters in the region require public funding to offset declining ad revenues.

But such funding is highly controversial. Last November, the Government scrapped plans to finance Channel 4's digital switchover with £14m from the BBC licence fee. The proposal has been the subject of an investigation by the Commission.

The EC'S new rules include an increased focus on accountability and transparent evaluation of the overall impact of publicly funded new media services.

The main changes in the latest EC Communication concern more control of new services launched by public service broadcasters, and clarifications concerning the inclusion of pay services in the public service remit.

Competition Commissioner Neelie Kroes said: "The new Communication strikes the right balance between the interests of public and private media, to ensure healthy competition in the very rapidly evolving media environment, to the benefit of Europe's citizens.

She added: "Public broadcasters will be able to take advantage of the development of digital technology and internet-based services to offer high quality services on all platforms, without unduly distorting competition at the expense of other media operators."

Information Society and Media Commissioner Viviane Reding said: "The adoption of this Communication will give additional legal certainty to the media sector in Europe and ensure a fair competition between public broadcasting and private media."

European public service broadcasters receive more than €22bn annually from licence fees or direct government aid, placing them in third place, after agriculture and transport companies, among recipients of state aid.