European Media Communication Policy, Development, and Governance
Summary and Keywords
European communications policy is defined as European level coordination of national policies by institutions such as the European Union (EU), Council of Europe (CoE), European Broadcasting Union (EBU) and European Audiovisual Observatory (EAO). The focus in this article is on European Union initiatives that are, in general, directly binding on Member States. They comprise of policies governing cross-border broadcasting (television and radio), telecommunications relating to media, content distribution (networks and subsidies), public service definitions, advertising and quotas. The focus is on current policies, with historical accounts of how they came into being. It draws on primary source material and provides secondary reading suggestions under the section Further Reading. A distinction is made between hard law, which is directly binding, and soft policy coordination, which takes place between the European Union institutions and national regulatory authorities (NRAs). The policy areas under discussion are: cross-border broadcasting (television and radio), telecommunications relating to media, distribution (networks and subsidies), public service definitions, advertising and quotas. European Union initiatives are comprised of four main components: legislation (Directives, Regulations, and Decisions), soft governance (self-regulation and other forms of European level coordination), competition law and distributive policies (the MEDIA programme and Creative Europe). Directives, regulations, decisions and competition case rulings are directly binding on member states. Soft policy coordination takes place between the European institutions and national regulatory authorities (NRAs). It is used primarily to coordinate standard-setting between NRAs and establish common EU positions on international platforms. It has also been instrumental in setting benchmarking exercises and the exchange of best practice in areas where there is no EU legal basis for legislation such as media transparency, freedom, pluralism and independence.
EU media policy locates its beginnings in the 1970s when a European Court of Justice Decision defined television signals as services entitled to free movement within the internal market. Building on the 1974 Sacchi Decision and subsequent initiatives, the European Community approved the 1989 Television Without Frontiers (TWF) Directive under its single market programme (European Commission, 1989). The Directive legalised the broadcast of radio and television signals from one Member State to another. Regulation of content, such as programming and advertising, was governed by the state where the signal was broadcast from, not by the state where it was received, under the principle of origin. The TWF Directive produced capital mobility within Europe, with many companies relocating headquarters to the United Kingdom and Luxembourg, which loosened restrictions on content for non-domestic satellite and broadband licenses. Examples of national-level restrictions on content are watersheds (e.g., programming containing violence and sexual behavior shown after 9 p.m.), the portrayal of sexual conduct, the reporting of crimes, “phone-in” programs, chat shows, religious programming and the use of hidden microphones. TWF was flanked by the 1990 Open Network Provision (ONP) Directive, which opened markets across Europe for telecommunications services and networks.
TWF was updated in 1997 then replaced in 2010 by the Audiovisual Media Services Directive (AVMSD). The principle of origin was redefined to mean a company’s place of operation (based on the number of staff, satellite link-up and other criteria). The most significant rules within the Directives are the European quotas reserving the majority proportion of transmission time for European works (originating in EU Member States, members of the European Convention on Transfrontier Television of the Council of Europe and works co-produced between the EU and third countries). This was aimed at strengthening European production and reducing the broadcast of US content in particular on European screens. The measure was never mandatory (“where practicable and by appropriate means”) and excluded news, sports events, games, advertising, teletext services and teleshopping. Implementation is monitored by the EC but not sanctioned. Other measures include restrictions on advertising, content and the protection of minors.
Under the 2010 advertising rules, television films, news and children’s programs are restricted to advertising breaks of once every 30 minutes, and no advertising is permitted during religious services. Advertising is limited to 20% of programming time per clock hour and to not more than 12 minutes. The AVMSD Directive liberalized product placement in films, which had previously been restricted or banned at some national levels, abolished the daily limit on television advertising and removed restrictions on teleshopping. Significantly, AVMSD extended the country of origin principle to “non-linear audiovisual media services” such as on-demand downloading of films and other programming via satellite, broadband and the Internet. As such it extended the existing provisions on content and advertising to new service providers. For example, European works should be prominent in the catalog of programs offered by on-demand audiovisual media services according to AVMSD. It also permits Member States to restrict on-demand services in cases of protection of minors, incitement to hatred, the protection of public health, public security and consumer protection.
The Open Network Provision (ONP) Directive paved the way for a number of Directives and Regulations in telecommunications. In the 1990s, digital technology allowed for the compression of terrestrial television signals, freeing up spectrum for other services such as mobile phone, wireless mobile communications and mobile broadband. It also facilitated two-way communication, making interactive television, advertising and gaming possible. It was envisioned that separate markets (terrestrial, satellite, cable, voice telephone, Internet service providers) were to converge and compete in a single market. The potential of convergence for new services, particularly on-demand, was recognized by the European Commission (EC), which devised a policy framework to encompass all communication technologies. This culminated in the 2002 Regulatory Framework for Electronic Communications and Services which comprised of 5 Directives (the Framework Directive, Authorisation Directive, Access Directive, Universal Service Directive, and the Processing of Personal Data and the Protection of Privacy in the Telecommunications Sector Directive) and the Radio Spectrum Decision. This was revised and updated to include two regulations, the first in 2009 to establish a Body of European Regulators for Electronic Communications (BEREC), the second in 2012 on roaming on public mobile communications networks. The 2009 Better Law Making Directive amended the Framework, Access and Authorisation Directives. The Citizens Rights Directive amended the Universal Service and Data Protection Directives. BEREC replaced the European Regulators Group (ERG), which had been set up in 2002. Telecommunications and media legislation work in tandem. Significantly, the Better Law Making Directive permits Member States to impose must-carry rules “to specified radio and television broadcast channels and complementary services supplied by a specified media service provider,” but only if they are clearly justified in national legislation.
The European Union institutions also have a role to play at the international level. EU Member States and institutions have long subsidized and protected cultural production and distribution at national and European levels. The Council of Ministers argued for an exemption for cultural services within the General Agreement on Trade in Services (GATS) for the European Communities during Uruguay Round negotiations (1986–1994). This was not achieved, and audiovisual services (including motion picture, radio, television, video tape production and distribution services) were declared ripe for liberalization along with telecommunication, postal and other communication services. GATS requires that specific commitments be made between states for sector liberalization. Thus far, no commitments have been made by European Union member states. Instead the Council of Ministers negotiated a cultural exemption to the Most Favored Nation (MFN) agreement for production and distribution of audiovisual works, cinematographic works and television radio programs and broadcasting services. This protects film and television subsidy schemes, linguistic quotas, ownership legislation, market access, levies on non-European content and subsidization of endeavors such as digital switchover at national and European levels within Europe. Both the Media International (2008–2010) and Media Mundus (2001–2013) programs were exempted under MFN exemptions. Indeed, cultural exemptions have made up the majority of all MFN exemptions since the establishment of the World Trade Organization (WTO).
The EU played a role in negotiation of the 2005 UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions. The Committee of Permanent Representatives in the European Union (COREPER) represented a common position of all EU Member States within UNESCO. The Convention supports a number of measures aimed at promoting cultural expression at national levels. Article 6 supports subsidization of content and public service broadcasting. Article 7 supports dissemination and distribution rights. The EU supported the Convention’s implementation in three ways. Firstly, it inserted protocols on cultural cooperation in Economic Partnership Agreements that referenced the UNESCO Convention (2008 EU–Cariforum, the 2009 EU–South Korea FTA and the 2014 EU–Canada Comprehensive Trade and Economic Agreement (CETA)). Secondly, the EU funded the UNESCO Convention’s international Expert Facility under the EU Strengthening the EU’s System of Governance for Culture in Developing Countries project (2001–2015). Thirdly, the EU is lobbying for the inclusion of new services under MFN exemptions in the current Doha round.
EU Soft Governance
When the Regulatory Framework for Electronic Communications and Services was revised in 2009, BEREC was established as a European level platform for national regulatory authorities (NRAs) to approve implementation of EU legislation together with the European Commission on a self-regulatory basis. The 2009 Regulation recommended that national regulatory authorities (NRAs) “develop and disseminate among NRAs regulatory best practice, such as common approaches, methodologies or guidelines on the implementation of the EU regulatory framework.” BEREC meets together with the Independent Regulators Group (IRG), which is an independent NRA network operating externally to the EC.
This form of soft governance has long been in operation at the European level. ERG/BEREC was the first forum in the communications field to be legitimized (by a 2002 Decision and a 2009 Regulation) and includes formalized consultation rules. The second was the European Regulators Group for Audiovisual Media Service (ERGA), which was legitimized by a 2014 Decision. ERGA was proposed under Article 30 of AVMSD and modelled on BEREC as “an advisory body to the Commission in its implementation activities concerning areas coordinated by the Directive 2010/13/EU.” ERGA meets regularly with European Platform for Regulatory Authorities (EPRA), which is an independent NRA network for broadcasting regulators in Europe. Both ERGA and EPRA act as an exchange of best practice and cooperation on audiovisual media policy. ERGA is currently working on the independence of the audiovisual regulatory bodies. Other NRA platforms in the media field include the European Platform of Regulatory Authorities (of regulatory authorities in the broadcasting field), the European Radiocommunications Committee (ERC), the European Committee for Telecommunications Regulatory Affairs (ECTRA) and the Independent Regulators Group (IRG) (for telecommunications). They operate independently on a voluntary basis but often in consultation with the EC.
The European Commission’s move towards soft governance was greatly formalized by the European Council at the 2000 Summit with the introduction of the Open Method of Co-ordination (OMC). The six policy areas designated for the OMC were the information society, research and development (R&D), enterprises, economic reforms, education, employment and social inclusion. At the meeting, the Council established the “Information Society Project” which aimed at a “knowledge-based economy with more and better employment and social cohesion” by 2005. The High Level Group on the Employment and Social Dimension of the Information Society (ESDIS) implemented OMC objectives via its 2005 e-Europe Action Plan: An Information Society for All. Action plan implementation was executed via the MODINIS program, which established two e-Europe steering groups in 2003, the first made up of member state representatives with the EC as chair, and the second, of thirty-seven independent experts. Lisbon II (2005–2010) was launched by the EC’s High Level Group 2004 paper Facing the Challenge: The Lisbon Strategy for Growth and Employment under the “i2010 strategy.” i2010 outlined three goals: a “Single European Information Space which promotes an open and competitive internal market for information society and media,” “strengthening Innovation and Investment in ICT research” and “achieving an Inclusive European Information Society.” Under Lisbon I (2000–2005), the European Council outlined information society policy as e-Health, e-Learning, e-Government, e-Security and e-Business policies. The e-Security and e-Business OMCs were less successful and centered mostly on funding initiatives. However, e-Health, e-Learning and e-Government were highly successful and laid the foundation for the Europe 2020 initiative, the Digital Agenda for Europe launched in 2010.
Under the e-Health OMC, the European Institute for Health Records and the Cen Technical Committee 251 were set up in 2004 with the Action Plan for a European e-Health Area. Significant outputs were the European Health Insurance Card (EHIC) and advancement in the interoperability of health systems. Under Lisbon II, an i2010 subgroup was set up in 2006. Its most notable achievement was the e-Accessibility program, which adopted European-wide standards for use by older persons and those with disabilities for digital television and interactive services, video applications, Internet standards and IT-based electrical products. Standards were agreed within CENELEC, ICTSB and ETSI and objectives formalized for the 2020 Digital Agenda for Europe.
Under Lisbon I, the e-Learning OMC was implemented by the High Level Task Force on Skills and Mobility, PROMETEUS and the ISTC Working Party on Education and Training. It established the e-Learning program and the European Observatory of Emergent e-Learning (DELPHI). As with the e-Health initiative, Lisbon I concentrated on standard-setting within CEN/ISSS and the Learning Technologies Standards Workshop of the Information Society. Common European positions were agreed within the IEEE Learning Technology Standards Committee. Lisbon II focused on e-Content through the e-Content Programme (2001–2004) and e-Contentplus programme (2005–2008) and Information and Communications Technologies (ICT) Policy Support Programme (“ICT PSP”) (2007–2013). The first two programs focused on digitization of literary and audiovisual content. ICT PSP continued latter initiatives but also included smart mobility, energy efficiency and public service projects such as smart cities. These were the forerunners of ongoing initiatives such as European Schoolnet Observatory, Europeana and Culture Action Europe, which evolved from the e-Learning OMC.
Under the e-Government OMC, the IDABC e-Government Observatory was established to improve interoperability between and best practice amongst European public administrations through ICT solutions. Public Sector Information (PSI) initiatives culminated in an ePSI forum to promote transparency in government and advice and funding for establishing data portals and data protection. The work on public sector transparency was continued under the e-Government Action Plan (2011–2015). The EU e-Government Action Plan 2016–2020 is currently under discussion.
Although the EU legislative focus is on economic policy and trade, soft governance has been able to encompass wider public interest issues that have a weak Treaty basis. For example, the European Parliament has long requested that the European Commission draft a Directive on media pluralism. Article 11 of the 2000 Charter of Fundamental Rights of the European Union which states that “Everyone has the right to freedom of expression” and that “the freedom and pluralism of the media shall be respected.” This reinforces but does not legally enact the 1953 Article 10 of the Council of Europe’s European Convention on Human Rights, which states: “Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers …” Article 151(4) of the TEU (Article 167 of the consolidated version of the TFEU) states that “the Union shall take cultural aspects into account in its action.” However, the European Union institutions cannot base a Directive on a Charter, and Article 151(4) cannot be used as a basis for a Directive without unanimous agreement by all Member States as it does not qualify for qualified majority voting in the Council of Ministers. Hence, the European Commission has tackled media pluralism and freedom through soft initiatives.
Other forms of soft governance can be found in the field of media transparency. A number of initiatives allowed a 2007 Council of Europe Recommendation on Media Pluralism and the Diversity of Media Content and a 2008 European Parliament resolution on concentration and pluralism in the media in the European Union encouraging, amongst other things, the “disclosure of ownership of all media outlets to help achieve greater transparency regarding the aims and background of the broadcaster and publisher.” Outcomes included a 2013 Education, Youth, Culture and Sport Council meeting on media freedom and pluralism in the digital environment stated in its conclusions that “transparency of media ownership and of funding sources [are] essential with a view to guaranteeing media freedom and pluralism.” This was followed by a 2014 Foreign Affairs Council meeting which issued guidelines to “support actions by third countries to improve transparency of media ownership, the adoption of measures against media concentration and fair and transparent licensing allocation as the associated risks have grown more acute in the digital age.”
Following the European Parliament’s request for a Directive on media freedom, pluralism, and independent governance in its 2011 Resolution on media law in Hungary, the European Commission responded by establishing a High Level Group on Media Freedom and Pluralism. The Group made a number of recommendations in its 2013 report entitled A Free and Pluralistic Media to Sustain European Democracy in 2013. It does not recommend a Directive. However, a number of projects were funded by the European Commission from 2014 to promote media pluralism and freedom, namely Strengthening Journalism in Europe; Mapping Journalism; Strengthening Journalists’ Rights, Protections and Skills; Index on Censorship; Safety Net for European Journalists and the Media Pluralism Monitor. The projects are aimed at providing training courses to journalists and tracking legislation and states’ actions that could threaten journalistic freedom. The Media Pluralism Monitor was funded in 2015 for further Member State monitoring.
EU Competition Law
Generally, the European Competition Network, the EU’s competition authority, views the media sector like any other sector under the single market. It is applied in cases of anti-competitive practices (e.g., cartel formation and collusion) under Article 101 of the TFEU (ex Article 81 TEC), market dominance under Article 102 (formely Article 82 TEC), state aid under Article 107 (ex Article 87 TEC) and in the case of market dominance (mergers and acquisitions) under the Merger Regulation. Competition law has been applied to media markets and communications more generally. This has been in control of concentrations, access to distribution platforms, premium content collective rights management and state aid.
As the media sector is presumed in many Member States to have public opinion forming powers, states often require lower turnover thresholds in competition decisions in the media sector. The EU recognizes this under Article 21 of the 2004 Merger Regulation which protects national jurisdiction over legitimate interests. Article 21(3) provides that “Member States may take appropriate measures to protect legitimate interests other than those taken into consideration by the Merger Regulation and compatible with the general principles and other provisions of Community law.” Specifically, Article 21(4) states that “public security, plurality of the media and prudential rules shall be regarded as legitimate interests.” This formalizes subsidiarity as outlined in Article 5 of the Treaty of the European Union. When a competition decision is taken, Member States can declare an additional legitimate interest and the Commission decides within 25 days whether it qualifies. This permits states to apply lowered thresholds and public-interest tests applied in national competition decisions on media mergers and acquisitions. Legitimate interests have only been invoked successfully seven times to date and only once concerning the media. This was the 1994 Newspaper Publishing case when the European Commission allowed the UK to take additional measures. Legitimate interests were invoked again by the UK when the European Commission approved News Corporation’s bid to take over BSkyB, under grounds of “media plurality” in 2010, but the acquisition never went ahead.
Over the last decade, the European Commission competition authority has been particularly active in the media sector under its decisions on state aid and exclusive rights. Subsidies to public service broadcasters (PSBs) fall under state aid rules. Additionally, exclusive rights agreements (such as those approved by the EBU, which is the umbrella association for public service broadcasters in Europe) are prohibited under the EU treaties, so exemptions must be found under which these can be considered compatible with market competition. This has proven highly challenging for the Commission as it possesses very few tools with which to grant exemptions, and there was nothing in the Treaties to give public service broadcasting any special status until 1996. It did not distinguish between commercial and state broadcasting until the mid-1990s. It only initially had the broader definition of broadcasting, which had been defined as a “service” by the European Court of Justice. However, throughout the 1990s, the European Commission competition authority was faced with a number of complaints from commercial broadcasters about the activities of public service broadcasters.
The European Commission’s public service broadcasting policy developed historically starting with the 1993 “exemption” decision for Eurovision leading up to the 2009 Communication from the Commission on the Application of State Aid Rules to Public Service Broadcasting. Initially, PSB policy was based upon European Court of First Instance and European Court of Justice Decisions on exclusive rights and state aid. Then discussions led to a PSB protocol and Article 7d in the 1997 Amsterdam Treaty, which laid the foundations for the 2000 Communication on Services of General Interest in Europe and 2001 Communication on the application of state aid rules to public service broadcasting. Then in the 2003 Altmark case, Article 7d on general services was interpreted by the European Court of Justice with regard to state aid. This was incorporated into a 2009 Communication on the application of state aid rules to public service broadcasting.
Exemptions for PSBs began under EU competition law in 1993, when it exempted the Eurovision exclusive rights agreement. Eurovision is an agreement set up by public service broadcasters across Europe to share news and sports broadcasting between them established by the EBU in 1954. The case arose due to the advent of satellite television. Sky set up the Eurosport sports channel together with the EBU in 1988. Under the Eurosport Consortium Agreement, public service broadcasters and Sky were sharing rights to sports programming between them. The rival satellite sports channel, Screensport, filed complaint with the European commission over this agreement. There was no possibility for 3rd party access, so Screensport could not bid for the rights. The Commission ruled in 1993 that non-members should be permitted to bid for sports programming. However, at the same time, the European Commission gave formal recognition to the Eurovision system and a five-year exemption from competition rules.
The “exemption” decision of 1993 essentially recognized the EBU members’ public service role. From 1988, the EBU Marino Charter was set up, which restricted future EBU membership to public service broadcasters. However, EBU membership included the commercial broadcasters Canal Plus, TF1 and RTL, which had joined the EBU in 1984 and in 1986 respectively. TF1 did not leave the EBU when it was privatized in 1987. All of these groups had access to the Eurovision exclusive rights agreement. However, the three existing commercial groups were not asked to leave. When four new commercial groups, La Cinq, M6 and Antena 3, requested EBU membership in 1994, they were all refused membership under the Marino Charter even though TF1, Canal Plus and RTL were still members. This provoked a complaint from Antena, M6 and La Cinq from France together with RTI from Italy and Telecinco from Spain, which challenged the Eurovision exclusive rights agreement in the European Court of First Instance. The Court, in a joint ruling on two cases, overturned the European Commission’s exemption decision, stipulating that Eurovision participants could no longer share news and sports broadcasting between them on an exclusive rights basis.
By the mid-1990s, there was a pressing need for recognition of public service broadcasting under EU law. The Court’s Decision was flanked by a number of other developments. In 1995, the WTO was established and began to investigate state aid cases under the 1995 Agreement on Subsidies and Countervailing Measures. The 1995 agreement determines whether or not a subsidy can be used by a WTO member. Although this has not yet been applied to European public service broadcasters, the potential exists for a case on countervailing duties under the dispute settlement mechanism of the WTO. At the same time, public service broadcasters were identified as presenting obstacles to market growth in the European Commission’s 1997 Convergence green paper.
The European Parliament subsequently pushed for recognition of public service broadcasting in the Amsterdam Treaty in its 1996 Resolution on the role of public service television in the multi-media society. This was flanked by a 1996 Council of Europe Recommendation on the Guarantee of the Independence of Public Service Broadcasting. Subsequently, a protocol was inserted into the Amsterdam Treaty, which states that “the system of public broadcasting in the Member States is directly related to the democratic, social and cultural needs of each society and to the need to preserve media pluralism.” Recognition was also granted in Article 7d of the Amsterdam treaty relating to services of general economic interest which could be applied to PSBs. Article 7 states “without prejudice to Articles 77, 90 and 92 and given the place occupied by services of general economic interest in the shared values of the Union as well as their role in promoting social and territorial cohesion, the Community and the Member States, each within their respective powers and within the scope of application of this Treaty, shall take care that such services operate on the basis of principles and conditions which enable them to fulfill their missions.” Following these developments, the European Commission reapproved the Eurovision system in 1999 based on the Amsterdam Treaty protocol. Commercial broadcasters had to withdraw from the exclusive rights agreement. Eurovision was given an exemption from competition law from 2000–2005.
In this way, exclusive rights agreements were permissible under EU competition law but state aid had not yet been handled. Throughout the 1990s, the Commission faced complaints from private broadcasters over the state financing of PSBs. Complaints originated in France, Spain and Portugal in the early 90s. In 1997 and 1998, additional complaints came from Germany, the UK and Italy and, later, Portugal. For example, the German association of commercial broadcasters (Verband Privater Rundfunk und Telekommunikation) complained about competition from the digital PSB channels Kinderkanal and Phoenix. BSkyB accused the UK government of an illegal application of state aid with the creation of the BBC “News 24.” In Italy, Fininvest complained about the underwriting of RAI’s debts by the Italian government. In the German case and UK cases, the Commission ruled in 1999 that state funding of digital channels was permissible under Article 87 of the Treaty. In UK “News 24” case, it stated that PSB funding could also be granted without prior notification and approval of the European Commission. As News 24 was only available to 10% of the UK population at that time, the Commission made an allowance for emerging technologies.
Subsequently, 6 cases on state aid and PSBs were taken to the Court of Justice. Commercial broadcasters challenged the license fee and use of advertising. As a consequence, the Court ruled that the Commission must formulate a more formal policy on PSBs and “state aid.” The Commission’s Directorate for Competition therefore published two Communications in 2000 and 2001. The 2000 Communication on Services of General Interest in Europe interprets Article 7D of the Treaty. It states that:
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 revenues) rather than a single funding scheme (solely public funds) as long as competition in the relevant markets (e.g. advertising, acquisition and/or sale of programmes) is not affected to an extent which is contrary to the Community interest.
The second 2001 Communication on the application of State aid rules to public service broadcasting is based upon national rationales for public service broadcasting outlined in the protocol of the 1997 Amsterdam Treaty. It states that:
the broadcast media play a central role in the functioning of modern democratic societies, in particular in the development and transmission of social values. Therefore, the broadcasting sector has, since its inception, been subject to specific regulation in the general interest. This regulation has been based on common values, such as freedom of expression and the right of reply, pluralism, protection of copyright, promotion of cultural and linguistic diversity, protection of minors and of human dignity, consumer protection.
It quotes Commissioner Oreja, who said:
public service broadcasting has an important role to play in promoting cultural diversity in each country, in providing educational programming, in objectively informing public opinion, in guaranteeing pluralism and in supplying, democratically and free-of-charge, quality entertainment.
The 2001 Communication outlines four conditions under which public service broadcasters would be exempt from state aid provisions. It asks Member States to formally define public service broadcasting activities and to differentiate these from private broadcasters. This is a significant requirement of the Commission, as many Member States had never formally defined public service broadcasting in a legal act up until this point in time. Under entrustment, it required broadcasters to be overseen by a formal regulatory body. The third criterion demands greater transparency of accounts if PSBs are license-fee funded or state funded, and in particular to determine whether the fee is being used to cross-subsidize new services. The fourth criterion requires that state aid not exceed the PSB’s public service mission. The 2001 Communication led to a serious re-assessment of public service broadcasting at national levels. It also led to greater European co-operation in the definition of public service broadcasting.
In 2003, the Court of Justice interpreted Article 7d wherein it rules that public service compensation does not constitute state aid under the Treaties in its Altmark Decision. The court case was on transport but is significant for state aid assessments of public service broadcasting. The Court ruling devised the Altmark test. The test determines whether or not the public service in question constitutes state aid. There are four criteria: (1) to see if a provider has clear public service obligations, (2) whether there are pre-established parameters for determining the competition in an objective and transparent manner, (3) no over-compensation and (4) relates to the choice of the company and efficiency. A public service provider needs to be sourced via public procurement, or there needs to be compensation if this is not the case.
The European Commission applied the Altmark test to decisions on Portugal’s RTP, Italy’s RAI and France’s second and third channels in the early 2000s. Although they did not pass the Altmark test, in all three cases the Commission ruled that state aid was permissible because they met the principles outlined in its 2001 Communication, namely, definition, entrustment, effective monitoring and proportionality. In the 2002 BBC new digital services case, the Commission assessed funding from the license fee in view of the BBC’s nine new thematic digital radio and television channels. The Commission decided that “public service broadcasters can develop and diversify their activities in the digital age, as long as they are addressing the same democratic, social and cultural needs of the society.” In subsequent cases, some public service broadcasters did not meet the 2001 criteria. The first of these was brought by TVDanmark against Danish public service broadcaster TV2. In 2003, the European Commission ruled that TV2 had been over-compensated and it was fined €87.8 million. These cases here were initiated by complaints from private broadcasters, but the Commission has started to open its own cases since this time. In 2007–8, Germany, Ireland and Belgium were asked to revise their public service broadcasting funding schemes which were viewed to be “incompatible with the common market.” As a result, Germany developed the 3 Stufen test (based on the UK’s 2007 UK “public value test”).
By 2008, the European Commission had issued a press release which stated that public broadcasters received over €22 billion annually from license fees or direct government grants, placing them third, after agriculture and transport companies, among recipients of state aid in Europe. This statement, the Altmark Decision and outcomes of competition decisions to date set precedence for the EC’s 2009 Communication on the Application of State Aid Rules to Public Service Broadcasting. The 2009 Communication adopts criteria from Germany’s 3 Stufen test.
It was demonstrated in this article how communications policy is developed and governed at the European level, particularly by the European Union institutions through a combination of hard law and soft governance approaches. It has been shown in this article that hard law (Directives, Regulations, and Decisions) and competition policy determine market conditions for media companies operating within Europe. Although soft governance has proven a useful tool for benchmarking and the exchange of best practice, it has been less effective in dealing with public interest concerns outlined by the European Parliament and other European institutions such as media transparency, freedom, plurality and independence. It has been shown how the latter have been largely dealt with by funding initiatives or recommendations. Although these measures have acted as a useful tool for naming and shaming exercises and improving transparency, there remains a need for greater accountability and scrutiny of media holdings and operations in Europe.
Discussion of the Literature
The scholarship surrounding European media policy has focused on the competing goals of economic growth and the role of the media in a democratic society. There are three key foci for research: the democratic role of the media in society and media systems, the role of public service broadcasters and liberalization versus market regulation. Key scholars are from communications, political science, economics and socio-legal disciplines.
Communications research has focused on the democratic role that the media plays in the creation of a public sphere and the identification of media systems. The media is seen to be tied with the functioning of democracy in its provision of a public sphere. In this respect, the media is relied upon for democratic representation in political debate, the representation of minorities within society and the protection and promotion of human rights. Communications scholars view the guarantee of pluralism of opinion and adequate political representation in the media as essential for a citizen’s participation in a democratic society. This entails diversity in the media as well as accurate and honest reporting in the news. A key work in the European systems is Hallin and Mancini’s 2004 book on comparing media systems. The authors use criteria to measure how well the media perform in their public sphere role under liberal, democratic corporatist and polarized pluralist models. These criteria are the measure of media markets, political parallelism, journalistic professionalism and the degree of state intervention in media system. Subsequent scholarship has built on this framework in different national contexts.
A second core area of study of the European media is the role of public service broadcasters. Every European state has as PSB such as the BBC in the UK, RAI in Italy or ARD in Germany. Radio and television PSB channels dominated audience share and often advertising revenue in most European states until very recently. Their role has been assessed by both communications scholars looking at their part to play in democratic society and political scientists and socio-legal scholars analyzing rationales for maintaining PSBs based upon the dual but often contradictory goals of communications theory and the functioning of the market. Rationales behind the provision of a public service broadcaster include contribution to public discourse, promotion of societal integration, and emphasis on news and education as opposed to entertainment. PSBs are called upon to represent minority interests and provide children’s programming as well as promoting national and European culture. However, many argue that PSBs are competing unfairly with private broadcasters and that a lesser role for PSBs will lead to an increase in market players, job growth and European competitiveness.
A third core European debate, particularly amongst media economists, political scientists and legal scholars, is that which concerns market liberalization versus increased regulation. The literature arguing for greater market restriction ranges from rationales for curtailing media concentration and gateway operators to limits on content in broadcasting and on the Internet. A key economist, Doyle, has argued consistently that media concentration leads to market monopoly or oligopoly and is counter-competitive as well as having political and social costs. This may allow media owners heightened influence on public opinion (politically or economically) particularly at certain points in time preventing contrasting views from reaching the general public. It is argued that concentration can lead to standardization in media content, reducing the variation and amount of information sources. Encryption technologies in the delivery of media content across platforms such as mobile phones, the Internet and set-top boxes is seen to threaten to financially burden the public with high costs for popular viewing leading to the “information rich” and the “information poor.” Thematic channels can overlook minority audiences.
There have always been tensions resulting in a collision of ideas over media policies but a real change came with the advent of digital technological. Traditional technical rationales based the scarcity of frequencies have become obsolete in the era of digital technology, mobile communications and the Internet, coupled with the use of satellite and cable. One body of scholars argues that the removal of restrictions on media markets will lead to greater market growth and jobs. In pursuit of this goal, EU member states, particularly over the last ten years, have been dismantling rules restricting media markets and replacing them with competition instruments. Technological convergence has also become core to arguments for liberalization. Few specific sector rules (such as cross-media ownership, audience and market share) remain. Similar arguments have been used to remove restrictions on content and advertising at national levels.
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