EC eyes funding for public service b'casting

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BRUSSELS -- The European Commission on Thursday announced a review of rules for state funding of public service broadcasting, saying that European Union laws must keep pace with the fast-changing media environment.

The commission said it will consult with EU member governments and broadcasters on what changes may be needed before deciding whether to make any proposals.

"I want a constructive exchange of views with all member states and stakeholders on the design of the future framework for state aid to public service broadcasting," EU Competition Commissioner Neelie Kroes said.

Kroes said that the current EU Broadcasting Communication, which dates back to 2001, offered "valuable guidance" to media companies, public broadcasters and governments. "But there may be ways it can usefully be improved to increase transparency and legal certainty, also as regards the way public service broadcasters fulfill their mission in the new media environment," she said.

The commission will collect comments from stakeholders until March 10. If any formal policy proposals are eventually made, they will be published before the end of this year, with the new laws potentially in place by the first half of 2009.

A key issue in the review will be the public service remit in the new-media environment. Many public broadcasters also subsidize Web sites that compete in a commercial setting, and rivals say the aid gives them an unfair advantage.

However, the commission already has indicated that, while its own task is to preserve fair competition in the European market, it recognizes the wide discretion of governments to define public service broadcasting. This implies a clearly defined public service mission while limiting state aid to what is needed to fulfill this mission, excluding overcompensation and possible cross-subsidies into commercial activities, a commission official said.

The review comes just days after French President Nicolas Sarkozy announced plans to scrap advertising on state-owned television channels. Under the proposal, hundreds of millions of euros in lost revenue from advertising on public television would be offset by a higher tax on commercials aired on private channels and a proposed new tax on Internet providers and mobile telephone operators.

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