EU to side with BBC

Commission to reject BSkyB's complaint

BRUSSELS — The European Commission today is set to reject BSkyB’s complaint that the BBC has broken EU rules on state aid by funding its news service with the license fee paid to the state by all British TV set owners.

News 24’s budget is about £50 million ($82 million) a year, but the web is given away free to cable companies.

BSkyB, Rupert Murdoch’s satellite television network, had filed a formal complaint that this arrangement amounted to unfair competition to its own news service, Sky News. BSkyB claims that the pricing is predatory, and says that Sky News has been dropped from some cable operators in favor of News 24 as a result.

No breach of rules

But the commission has decided that use of the license fee to fund the channel does not breach EU rules on state aid and is in line with the BBC’s public service obligations. Crucially, no new funding is involved in operating News 24.

Formal rejection of BSkyB’s complaint is expected to be approved at the commission’s weekly meeting this morning. The BBC was not available for comment before the final decision had been reached.

News that competition supremo Mario Monti is siding with the BBC will come as a relief to pubcasters across the EU.

Hopes rise

Monti had pledged to take a strong line against abuses of state aid by pubcasters, raising the hopes of EU commercial broadcasters that state funding of public broadcasting is set for a period of intense scrutiny.

Critics have pointed out that Monti was appointed to his first position in the EC, as internal market commissioner, by then Italian Prime Minister Silvio Berlusconi, who owns Italy’s leading commercial TV stations.