Battle lines drawn over EU pubcaster funds

Commission considering 120 submissioins

BRUSSELS -- Europe's public broadcasters have lined up against changes to their funding rules, facing off against commercial broadcasters who say unrestrained public money is distorting the market.

The battle lines have emerged in 120 submissions from stakeholders -- including producers, broadcasters, publishers and 16 EU governments -- that the European Commission is wading through as part of its review of the EU's 2001 rules for state funding of public service broadcasting.

A key issue concerns the Internet: Many public broadcasters also subsidize Web sites that compete in a commercial setting. Commercial broadcasters -- backed by newspapers and other media companies -- demand clear limits on this aid, saying it gives them an unfair advantage, while the Association of Commercial Television in Europe wants strict independent regulation of the sector.

EU Competition Commissioner Neelie Kroes appears to back commercial broadcasters.

"It certainly isn't obvious to the naked eye, or the taxpayer, why public broadcasters should be using state money to run online video games, dating clubs and calculators amongst other offerings," she said. "There is no shortage of these services in the private sector -- which must all survive without subsidy."