Subsidy rule change in the cards
BRUSSELS — European pubcasters will be able to hoard more coin to cope with cost fluctuations, if reforms announced Tuesday are given the thumbs up.
The European Commission’s changes to subsidy law would allow 10% of a broadcaster’s total budgeted expenses to be held in reserve.
They are currently only allowed to hold 10% of their public subsidy, excluding other revenue, such as advertising.
Reserves above 10% would be permitted in exceptional cases, for instance during restructuring or major technological investments to develop public services.
In return, the commission will demand stricter controls from European governments. They must ensure that pubcasters are not over-paid for public services and that public money is not supporting commercial activities.
The proposal also deals with pay services in public broadcasting for the first time. Payment has its place, but also its limits, the regulator concludes.
For example, pubcasters would be allowed to pass on pure network transmission costs to consumers, such as sending TV to mobile phones, without jeopardizing their subsidy. They could also ask viewers to cover the cost of access to particularly advanced technological features.
However, offering premium content on a pay-per-view or subscription basis, or using premium rate phone numbers for competitions, would be considered commercial broadcasting and not open to public subsidy.
The plans are open to public comment until Jan. 15, 2009. Definitive proposals will follow before July.