EU to investigate RTÉ's dual funding.

DMC

Public broadcast funding 'may breach EU rules'

http://media.guardian.co.uk/broadcast/story/0,7493,1429820,00.html

Chris Tryhorn
Thursday March 3, 2005

The funding of public broadcasting in Germany, Ireland and the Netherlands may be in breach of EU competition rules, the European commission warned today.

The commission said it had written to the governments of the three countries asking them to justify their funding or suggest changes after a preliminary investigation into complaints from competitors.

"Having examined allegations from several complainants, the commission's preliminary view is that the current financing system in these member states is no longer in line with treaty rules requiring member states not to grant subsidies liable to distort competition," the commission said.

"The member states concerned now have the opportunity to submit their comments and to propose changes to the financing regime for public broadcasters."

The ruling affects ARD and ZDF in Germany, the Dutch broadcaster NOS, and RTE in Ireland.

The commission's intervention comes just a day after the UK's public broadcaster, the BBC, was granted a 10-year extension to its principal means of funding, the TV licence fee.

This is not the first time European countries have come under the commission's scrutiny for the way they fund public TV.

It has already investigated the financing regimes in France, Italy, Spain and Portugal, which have since agreed to put their houses in order.

A third probe looking at Flemish and Austrian public broadcasters has also got under way.

The commission said it was asking Germany, Ireland and the Netherlands to implement the principles of "clear definition of the public service remit, separation of accounts distinguishing between public service and other activities, and adequate mechanisms to prevent overcompensation of public service activities.

"Member states also need to ensure that commercial activities by public broadcasters are in line with market principles. Finally, there should be an independent (national) authority checking compliance with these rules."

In Germany and the Netherlands, the issue of how public broadcasters' online activities are financed has also been raised, the commission said.

"The scope of such online activities and whether they are financed by public funds should be determined not by the public broadcasters themselves but by the member states concerned, to ensure that only those services are included which serve the same democratic, social and cultural needs of society as traditional broadcasting."

DMC

more....

EC calls for greater clarity on RTÉ funding

http://www.rte.ie/news/2005/0303/rte.html

03 March 2005 17:02

The European Commission has said the Government should provide greater clarity over the financing of RTÉ as a public service broadcaster.

The Commission says there needs to be greater overall transparency.

It called for a monitoring body at national level to ensure that public funds are being spent where they are supposed to be.

RTÉ has welcomed the preliminary opinion, which follows a complaint lodged with the EC against Ireland in 1999 by TV3.

The station alleges that State aid measures granted to RTÉ and TG4 infringe EC Treaty rules.

Round Cable

About time some kind of investigation is carried out into RTE's unfair possition, I hope they give RTE a good kick up the arse, and put them in shape, how about widescreen or DTT?

DMC

Govt considers EU competition breach ruling
http://www.breakingnews.ie/2005/03/03/story192015.html

03/03/2005 - 19:40:54

The Government was tonight carefully considering a ruling that the funding of public service broadcasting in Ireland breaches European Union rules on fair competition.

Communications Minister Noel Dempsey said he would consult with legal experts and RTE and respond within the month deadline set by the European Commission.

“The recommendations proposed by the Commission are of a detailed legal and regulatory nature which I will carefully consider with the advice of the Attorney General and RTE over the next month, by which stage a reply is required by the Commission,” he said.

“However, I do welcome the fact that the Commission has found that the financial measures granted in favour of RTE and TG4 constitute existing aid and that the licence fee is lawful under EU law.”

Similar warnings were also issued today to the Dutch and German governments.

A Commission spokesman explained: “Having examined allegations from several complainants, the Commission’s preliminary view is that the current financing system in these member states is no longer in line with Treaty rules requiring member states not to grant subsidies liable to distort competition.

“The member states concerned now have the opportunity to submit their comments and to propose changes to the financing regime for public broadcasters.”

The Commission inquiry into the three countries follows a Brussels edict in 2001 on how EU state aid rules should apply to public sector broadcasting.

The rules say the arrangements must ensure state funding does not spill over into effectively bankrolling the commercial activities of public broadcasters.

Public broadcasting in France, Italy, Spain and Portugal has already fallen foul of the rules, with changes made to meet Commission demands that such financing regimes respect “fundamental principles of clarity, transparency and market behaviour”.

A Commission statement this afternoon declared: “The Commission now asks Germany, Ireland and the Netherlands to implement these same principles – clear definition of the public service remit, separation of accounts distinguishing between public service and other activities and adequate mechanisms to prevent overcompensation of public service activities.

“Member states also need to ensure that commercial activities by public broadcasters are in line with market principles. Finally, there should be an independent national authority checking compliance with these rules.”

The Commission spokesman said fines did not necessarily follow from the action and said that if the three governments adopted the measures demanded, the Commission would close the case.

Elmo

About time some kind of investigation is carried out into RTE's unfair possition, I hope they give RTE a good kick up the arse, and put them in shape, how about widescreen or DTT?

You will find that its our Government which has prevented the role out of DTT.

I don't think they have an unfair position, TV3 have 15% of the audience and are the second most watched channel.

Round Cable

Elmo wrote:

You will find that its our Government which has prevented the role out of DTT.

I don't think they have an unfair position, TV3 have 15% of the audience and are the second most watched channel.

Indeed the government are at fault, and nothing is being done about it.

Of course it's an unfair possition, TV licence and advertising, I cringe when they say at the end of Movie ad's; 'More movie premieres that any other channel in Ireland', and I'm left thinking could they afford all that if they didn't get the licence fee. If they lost one or the other what state would RTE be in?, could they even compete with TV3.

Elmo

If they lost one or the other what state would RTE be in?, could they even compete with TV3.

Yes they would but they would just look more like TV3. I don't think that would be a great prospect.

Have TV3 actuall ever contact anyone other then the FAI about sporting rights?

Telefís

Doesn't the license fee revenue go in its entirety towards PSB programming?
Of course that's not to say that it still doesn't aid their market position, but I don't believe RTÉ is anti-competitive.
It is the nature of the Irish market; TV3 have done the grand total of nothing to either provide Irish audiences with indigenous programming or to in any way support the independent sector in this country. Indeed the statutory framework under which they operate actually allows them much greater freedom than RTÉ to avoid commissioning programming from outside the station.
I cannot see any benefit in undermining the strength of RTÉ only to spread these resources more thinly over on TV3 to the point of them not having any impact at all, purely for the sake of supposed 'fair competition'.

Round Cable

RTE wrote:

It is the nature of the Irish market; TV3 have done the grand total of nothing to either provide Irish audiences with indigenous programming or to in any way support the independent sector in this country.

You're correct TV3 have done very little in the area of home programming, the question is though, without the licence fee (On equal terms with TV3) how much indigenous programming would RTE come up with? Answer; little or none.

Telefís

Largely true, although in such an instance there would be a greater obligation on both stations to make such programming. Also many of RTÉ's highest rated programmes are homegrown and self-financing. TV3 have barely even attempted this - even when they have the ability to make something work like the Dunphy Show, the still make a balls of it by refusing to put it on on a Saturday night which was there for the taking. Doing so would have served the audience yet they used the whole affair as a commercial publicity stunt more than anything else.

But certainly if RTÉ use their dual-funded power to acquire programming at international auctions and flatten TV3 bids, then certainly that type of practice should be stamped on.

SPDUB

Round Cable wrote:

Of course it's an unfair possition, TV licence and advertising,

And TV3 started broadcasting full well knowing that was the position RTE was in

I actually find it pathetic that once they got on air they started complaining about it

Round Cable

SPDUB wrote:

And TV3 started broadcasting full well knowing that was the position RTE was in

I actually find it pathetic that once they got on air they started complaining about it

Of course they knew, they had been trying to broadcast since 1989, so they had full knowledge, but it didn't matter to them until they got on the air in 1998.

Macy

RTE wrote:

TV3 have barely even attempted this - even when they have the ability to make something work like the Dunphy Show, the still make a balls of it by refusing to put it on on a Saturday night which was there for the taking. Doing so would have served the audience yet they used the whole affair as a commercial publicity stunt more than anything else.

Whilst agree that TV3 should've moved the Dunphy Show to the Saturday, has the late late ever had such consistently high profile guests than during that period? For example Dunphy gets Roy Keane, suddenly the Late Late have Pele....

Telefís

Well most people judge the success of the Late Late on high profile guests - personally I don't, I think it's the content that counts not faces. High profile guests are also usuallly the most boring to listen to.
However, how the Late Late have virtually dropped all debate from the programme is a scandal and should be the concern of senior management.

Macy

RTE wrote:

Well most people judge the success of the Late Late on high profile guests - personally I don't, I think it's the content that counts not faces. High profile guests are also usuallly the most boring to listen to.
However, how the Late Late have virtually dropped all debate from the programme is a scandal and should be the concern of senior management.

Well that's a different debate - mine was more that when they had the competition in that slot they gazumped the Dunphy show guest wise - imo they could only do that by increasing the fee's paid.

Elmo

But certainly if RTÉ use their dual-funded power to acquire programming at international auctions and flatten TV3 bids, then certainly that type of practice should be stamped on.

An Independent Irish Equiry found this to be untrue.

TV3 rarely bids for the same shows that RTE bid for.

So much so that RTE and a New Irish Cable Channel where the only stations bidding on programming at an international sales confrence in the US.

TV3 generally get most of their programming from ITV or Canwest.

Elmo

From rte.ie

_________________________________________________________________

In 1999 TV3 lodged a complaint against Ireland to the European Commission concerning State aid measures granted to RTÉ and TG4 alleging that these measures infringed EC Treaty rules.

Today the Commission has written to the Irish Authorities with its preliminary view on this complaint. The Commission's preliminary view is that the financial measures granted in favour of RTÉ and TG4 constitute existing aid i.e. state aid under EC treaty rules but on a legal basis adopted prior to Ireland's accession to the EU in 1973. This means that the Licence Fee, and increases in the Licence Fee, is a valid way of supporting public service broadcasting and that the core point in TV3's complaint has been rejected.

The Commission has requested clarification about the role and financing of public service broadcasting and the Irish Authorities have one month to submit their initial comments.

The views of the Commission were contained in what is known as an Article 17 letter, pursuant to Article 88 (1) of the EC Treaty. To ensure that the financing of public service broadcasting in Ireland is compatible with EU regulations going forward the Commission has asked the Irish Authorities to ensure that the following principles are enshrined in legislation:

· a clear definition of the public service remit
· separation of accounts distinguishing between public service and other activities
· adequate mechanisms to prevent overcompensation of public service activities
· commercial activities by public service broadcasters must be in line with market principles
· there should be an independent (national) authority checking compliance with these rules.


While today's announcement is not a final decision RTÉ welcomes and endorses the principles the Commission upholds as regards Public Service Broadcasting.

RTÉ has on many occasions stressed the need for a clear definition and transparent framework within which it can continue to meet in full its public service remit and it has enhanced its reporting mechanisms. RTÉ has welcomed the proposal of Government to introduce new legislation to clarify the public service remit and its regulation, and is committed to working, in every appropriate way, to facilitate the progress of this legislation.

_________________________________________________________________

Telefís

Good news.
And RTÉ have already introduced many of the transparency proceedures required by the Commission as part of the shake-up post licence fee increase.

That's interesting about the bidding at auctions - suppose RTÉ don't go for many of the same shows, although I think there's still competition at times for films, notably for the autumn/Christmas schedule.

I see what you mean Macy about the Late Late - but the show is sponsored, in the region of €2.5 million a season I believe, although this year's one-season-only deal may be a bit more or less. I'm not sure if any licence money goes into it any more...(cough - Pat excluded)

Elmo

in the region of €2.5 million a season

I think thats more like €2.5 million for 3 years.

That's interesting about the bidding at auctions - suppose RTÉ don't go for many of the same shows, although I think there's still competition at times for films, notably for the autumn/Christmas schedule.

Now I am not sure about this but, I think RTE bids on TV packages which include TV Shows and Movies. I could be wrong.

RTE spent 25million on imports in 2003
I am guessing that TV3 spent pretty much the same amount of money, most of it going to ITV programming, which RTE cannot get its hands on because of ITV owning 45% of TV3. TV3 haven't ever really had a good christmas schedule, I don't think that they are interested in the Xmas Season. Also from what I can gather TV3 get most of its US TV imports from Canwest their other owner.
While TG4 spent 3million.

Telefís

I'm sorry, the Late Late figure is incorrect. When they signed the three year deal four years ago I couldn't remember if it was for £3 million or £6 million. Suffice to say it was the former So it's around €1.3 million a season - presumably including a lorry load of cars...

As for bidding - I remember reading newspaper reports of fierce bidding between the two for some films last year or the year before, maybe in the summer. I think it was at a TV & film auction as you describe...

RTE

RTE wrote:

Doesn't the license fee revenue go in its entirety towards PSB programming?

I think TV3 would get you there with a cross subsidisation arguement.
For instance does FBD sponsorship and advertising revenue during Fair city pay for all of the making of that programme?

Elmo

I think TV3 would get you there with a cross subsidisation arguement.
For instance does FBD sponsorship and advertising revenue during Fair city pay for all of the making of that programme?

Indeed RTE may only breakeven or make a small loss or profit during fair city. But this just proves that TV3 could always go out an make a simlar show while breaking even on that show.

Cross subsidisation didn't work in New Zealand and they have totally moved away from that idea there in the last number of years.