¹ In federal countries such as Germany, competence to regulate the media may be devolved to constituent states, on which see W Schulz, T Held, S Dreyer and T Wind, ‘Regulation of Broadcasting and Internet Services in Germany, a Brief Overview’, Hans Bredow Institute Working Paper No 13 (2008), available at <http://www.hans-bredow-institut.de/english/publications/ap/13-2Mediaregulation.pdf> accessed 18 August 2008.

² For examples, consider Art 11 of the German Interstate Agreement on Broadcasting, detailed in W Schulz, ‘The Public Service Broadcasting Mandate Seen as the Process of its Justification’, report commissioned by Friedrich-Ebert-Stiftung (English summary), March 2008, 11–12 available at <http://www.hans-bredow-institut.de/english/publications/FES080310Schulz_Public%20Value_en.pdf> accessed 18 August 2008 and s 264 of the UK Communications Act 2003. For a more general review of cultural requirements, see Ader, T, ‘Cultural and Regional Remits in Broadcasting’ (2006) 8 IRIS Plus 2 Google Scholar.

³ Henning, V and Alpar, A, ‘Public Aid Mechanisms in Feature Film Production: The EU MEDIA Plus Programme’ (2005) 27 Culture, Media and Society 229, 231–2CrossRefGoogle Scholar; and for an earlier discussion, NK Aas, ‘Challenges in European Cinema and Film Policy’ (2001) European Audiovisual Observatory online, publication at <http://www.obs.coe.int/online_publication/reports/aas.html> accessed 18 August 2008.

⁴ State aid N 477/04, United Kingdom—Digital Screen Network.

⁵ See discussion accompanying n 42 below.

⁶ Consider, eg: Case C-353/89, Commission v Netherlands [1991] ECR I-4069.

⁷ See, eg: Case C-17/00 De Coster [2001] ECR I-9445, para 29; and Joined Cases C-544 & 545/03, Mobistar and Belgacom Mobile [2005] ECR I-7723, para 29.

⁸ The Court of Justice held in Case 155/73, Sacchi [1974] ECR 409 that the sale of a physical film would be treated as the provision of a good and the transmission of television programmes a service under Community law. Subsequently, Case C-17/92, FEDECINE v Spain [1993] ECR I-2239 confirmed that cinema exhibition would be treated as the provision of a service.

⁹ Member States have, for example, had some limited success in arguing that the operation of certain sporting rules fall outside the scope of the EC Treaty, on which see discussion in Case C-519/04 P, Meca-Medina and Majcen [2006] ECR I-6991.

¹⁰ For a more detailed discussion of these provisions, see text accompanying n 63 below.

¹¹ Case C-353/89, above n 6.

¹² Consider the narrow and broad scope afforded to the concept of culture in the Commission’s rulings on Arts 86(2) EC and 87(3)(d) EC, discussed at text accompanying n 59 below.

¹³ Under Art 6 of the Treaty of Lisbon, [2007] OJ C306/01, the Charter is to become legally binding, subject to the Protocol relating to its application in the UK and Poland. At time of writing, the future of the Lisbon Treaty was in doubt given the results of the June 2008 Irish referendum.

¹⁴ Protocol on Services of General Interest, Treaty of Lisbon, above n 13, Art 1. An amendment to Art 16 of the European Community Treaty does, however, afford the Community direct legislative competence in this area.

¹⁵ The UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions is available at <http://unesdoc.unesco.org/images/0014/001429/142919e.pdf> accessed 18 August 2008. The Convention binds the Community and Member States within their respective spheres of competence.

¹⁶ UNESCO Convention on Cultural Diversity Art 20, above n 15.

¹⁷ Commission, ‘Communication on the Application of State Aid Rules to Public Service Broadcasting’, [2001] OJ C320/05 and ‘Communication on Certain Legal Aspects Relating To Cinematographic and Other Audiovisual Works’, [2002] OJ C43/06. See also Commission, ‘State Aid: Future Regime for Cinema Support’ MEMO/08/329 and ‘Explanatory Memorandum Regarding the Questionnaire on the Application of State Aid Rules to Public Service Broadcasting’ at <http://ec.europa.eu/comm/competition/state_aid/reform/broadcasting_comm_memorandum.pdf> accessed 18 August 2008.

¹⁸ Wiedemann, W, ‘Public Service Broadcasting, State Aid, and the Internet: Emerging EU Law’ (2004) 47 DIFFUSION online 1, 11Google Scholar.

¹⁹ For further details on these quotas, see Open Society Institute, EU Monitoring and Advocacy Programme and Network Media Programme, Television Across Europe, Regulation, Policy and Independence, Vol 2 (New York, Open Society Institute, 2005) 693. A requirement that TV broadcasters invest in audiovisual production will not be considered state aid where the film or programme produced constitutes ‘reasonable compensation’ for the investment, on which see Commission, Communication on Cinematographic Works, above n 17, 8. It is also possible that the aid will not be considered to have come from state resources, on which see the discussion of the PreussenElektra case at text accompanying n 44 below.

²⁰ Case C-17/92, FEDECINE v Spain [1993] ECR I-2239. Although there have been indications that the Community might reconsider its position and allow cultural justifications to be put forward in the context of directly as well as indirectly discriminatory measures, the Court of Justice has not to date modified its approach, an issue discussed by Shuibhne, N, ‘Labels, Locals and the Free Movement of Goods’ in Smith, R Craufurd (ed), Culture and Community Law (Oxford, Oxford University Press, 2004) 101-6Google Scholar.

²¹ C Troya and E Enrich, ‘Spain: Recent Developments Regarding Cinema Law’ (2007) IRIS 10–11/18 available at <http://merlin.obs.coe.int/iris/2007/10/article18.en.html> accessed 18 August 2008.

²² See, eg: Commission v Netherlands, above n 6.

²³ On which see in particular FEDECINE, above n 20, paras 20–1.

²⁴ Case C-250/06, United Pan-Europe Communications Belgium SA, Coditel Brabant SPRL, Société Intercommunale pour la Diffusion de la Télévision (Brutélé), Wolu TV ASBL v État belge, judgment of 13 December 2007.

²⁵ Ibid, paras 42 & 43.

²⁶ Directive 2002/22/EC on Universal Service and Users’ Rights Relating to Electronic Communications Networks and Services, [2002] OJ L108/51, Art 31.

²⁷ Case C-250/06, above n 24, para 44.

²⁸ The difficulty of establishing that there is no alternative, less restrictive, way of implementing a particular cultural policy is illustrated by Case C-368/95, Familiapress [1997] ECR I-3689.

²⁹ See the response of Cable Europe to the Commission Consultation on the Review of the EU Regulatory Framework, October 2006, available at <http://www.cableeurope.eu/uploads/documents/pub-33_en-ecca_4793_-_cablee_position_on_the_review_nrf_-_final.pdf> accessed 18 August 2008.

³⁰ The European Community MEDIA programme, for example, has a budget of €755 million for the seven years 2007–13, while contributions in 2000 by the then 15 Member States to their film industries were just under €950 million, see Aas, above n 3.

³¹ IMCA, Identification and Evaluation of Financial Flows Within the European Cinema Industry by Comparison with the American Model, study for the European Commission, April 2004 at para 3.3. The study is available at <http://ec.europa.eu/avpolicy/info_centre/library/studies/index_en.htm> accessed 18 August 2008.

³² See State aid NN6/2006, UK Film Production and Development Funds; State aid N 477/04, UK Film Council Distribution and Exhibition Initiatives: Digital Screen Network; and State aid N 461/05, UK Film Tax Incentive.

³³ See, eg: M Leidig, ‘German Mobile Phone Users To Pay TV Licence Fee’ Media Guardian, 10 January 2005.

³⁴ For 2006, the figure for public funding was estimated to be 23%, on which see OFCOM, ‘Response to the Commission’s Consultation on the Application of State Aid Rules to Public Service Broadcasting’ at 4, available at <http://www.ofcom.org.uk/tv/ifi/stateaidrules/of comresponse.pdf> accessed 18 August 2008. Luxembourg is alone in the EU in having a purely commercial radio and television sector.

³⁵ See Commission Press Release, ‘Commission Clarifies Application of State Aid Rules to Public Service Broadcasting’ IP/01/1429, 17 October 2001. These early cases are discussed by Bartosch, A, ‘The Financing of Public Broadcasting and EC State Aid Law: an Interim Balance’ (1999) 4 European Competition Law Review 197 Google Scholar; and Smith, R Craufurd, ‘State Support for Public Service Broadcasting: The Position Under European Community Law’ (2001) 28 Legal Issues of Economic Integration 3.CrossRefGoogle Scholar

³⁶ For commentary, see Harrison, J and Woods, L, European Broadcasting Law and Policy (Cambridge, Cambridge University Press, 2007) 290–311 CrossRefGoogle Scholar; Wiedemann, above n 18; and Ward, D, ‘State Aid or Band Aid? An Evaluation of the European Commission’s Approach to Public Service Broadcasting’ (2003) 25 Media, Culture and Society 233 Google Scholar.

³⁷ State aid N 37/2003, United Kingdom, BBC Digital Curriculum; and State aid N 631/2001, United Kingdom, BBC Licence Fee.

³⁸ See above n 17.

³⁹ State aid N 3/98, France, Aid for Film Production.

⁴⁰ Above n 17.

⁴¹ Commission Memo, ‘State Aid—Future Regime for Cinema Support’, MEMO/08/329 of 22 May 2008.

⁴² A major, early, Portuguese success in the case NN141/95, Portugal, aid for public service broadcasting, was subsequently overturned by the Court of First Instance in Case T-46/97, SIC v Commission [2000] ECR II-2125. This latter ruling has now to be read in the light of the Court of Justice’s ruling in Altmark, discussed at text accompanying n 47 below.

⁴³ State aid E 3/2005, Financing of Public Service Broadcasting in Germany.

⁴⁴ Case C-379/98, PreussenElektra AG and Schleswag AG [1999] ECR I-3735. Germany also cited in support cases C-345/02, Pearle BV, Hans Prijs Optiek Franchise BV, Rinck Opticiëns BV and Hoofdbedrijfschap Ambachten [2004] ECR I-7139 (hereinafter, ‘Pearle’); and C-482/99 France v Commission (Stardust Marine) [2001] ECR I-4397.

⁴⁵ State aid E 3/2005, n 43 above, paras 143–51. The Commission relied in particular on the ruling in Pearle, n 44 above, in which the Court concluded that an advertising campaign organised by a public body was not state aid in part because that body ‘served merely as a vehicle for the levying and allocating of resources collected for a purely commercial purpose previously determined by the trade and which had nothing to do with a policy determined by the Netherlands authorities’ (para 37).

⁴⁶ Case C-337/06, Bayerischer Rundfunk, Deutschlandradio, Hessischer Rundfunk, Mitteldeutscher Rundfunk, Norddeutscher Rundfunk, Radio Bremen, Rundfunk Berlin-Brandenburg, Saarländischer Rundfunk, Südwestrundfunk, Westdeutscher Rundfunk, Zweites Deutsches Fernsehen v GEWA, judgment of 13 December 2007, paras 41–7.

⁴⁷ Case C-280/00, Altmark Trans GmbH and Regierungspräsidium Magdeburg v Nahverkehrsgesellschaft Altmark GmbH [2003] ECR I-7747.

⁴⁸ Germany here sought to rely on Joined Cases C-83, 93 & 94/01 P, Chronopost v Ufex [2003] ECR I-6993. See in particular paras 31–7.

⁴⁹ State aid NN 88/98, United Kingdom, Financing of a 24-hour advertising-free news channel out of the licence fee by the BBC, para 85.

⁵⁰ Although Santamato, S and Pesaresi, N, ‘Compensation for Services of General Economic Interest: Some Thoughts on the Altmark Ruling’ (2004) 1 Competition Policy Newsletter 17 Google Scholar, note that a public service provider, because of its assets and market position, may be able to win a tender and still be overcompensated: a tender does not guarantee that there is no over-compensation and one may have a system of fair compensation without a tendering process.

⁵¹ See discussion at text accompanying n 73 below. Aid will exceptionally be assumed not to unduly distort trade and the state exempt from the requirement to notify the Commission where aid less than €30 million is provided to firms with a low turnover under the terms of Commission Decision 2005/842/EC on the Application of Article 86(2) of the EC Treaty to State Aid in the Form of Public Service Compensation Granted to Certain Undertakings Entrusted with the Operation of Services of General Economic Interest, [2005] OJ L312/67.

⁵² Commission Press Release, ‘State aid: Commission endorses measures to finance early retirement scheme for Spanish public broadcaster RTVE’, IP/07/291, 7 March 2007.

⁵³ See State aid E 3/2005, above n 43, para 323. Schulz, above n 2, 5 suggests that the compromise reached with the Commission was at least partially to avoid further dispute on this issue.

⁵⁴ State aid NN 84/04, French Support for the Cinema and Audiovisual Sectors, paras 390–8. It should be noted that although such measures are not caught by Art 87(1) EC, they may nevertheless impede the free movement of goods and services under Arts 29 and 49 EC.

⁵⁵ State aid N 695/06, German Film Fund, para 20.

⁵⁶ Henning and Alpar, above n 3, 232.

⁵⁷ State aid N 449/05, Madrid, Support for the Production of Short Films, para 17.

⁵⁸ State aid N 481/2007, Spain, Promotion of Movies and DVDs in Basque.

⁵⁹ Commission, Communication on the First European Community Framework Programme in Support of Culture (2000–2004), COM(1998)226 final, 3.

⁶⁰ Ibid, 4.

⁶¹ State aid NN 70/98, Kinderkanal and Phoenix, 6.2. See also para 26 of the Broadcasting Communication, above n 17.

⁶² Ibid. See also State aid NN 88/98, above n 49, para 36.

⁶³ Edwards, D and Hoskins, M, ‘Article 90: Deregulation and EC Law. Reflections Arising from the XVI FIDE Conference’ (1995) 32 CML Rev 157, 168–9Google Scholar. See also Commission, Communication on Services of General Interest, Including Social Services of General Interest: A New European Commitment, COM(2007)725 final, 3–4.

⁶⁴ Commission, Green Paper on Services of General Interest, COM(2003)270 final, para 17.

⁶⁵ Joined Cases T-528, 542, 543 & 546/93, Metropole Télévision SA, Reti Televisive Italiane SpA, GestevisióTelecinco SA and Antena 3 de Televisión v Commission [1996] ECR II-649, para 116.

⁶⁶ State aid NN 70/98, above n 61, 6.3.

⁶⁷ State aid N 695/06, above n 55.

⁶⁸ Broadcasting Communication, above n 17, para 26.

⁶⁹ Ibid, para 27. A number of decisions in 2006 concerning Slovakian aid for the press suggest, however, that the Commission may still be reluctant to find that programmes on political, socio-economic, family and social issues have a cultural dimension—see State aid N 663/2006, Slovak Republic, Aid for periodical ‘Varsarnap’; and N 664/2006, Slovak Republic, Aid for ‘Uj Szo’.

⁷⁰ For an example of a case where private bodies collectively support the provision of a service of general economic interest, see State aid N 89/2004, Ireland, Guarantee in Favour of the Housing Finance Agency and Social Housing Schemes Funded by the HFA. Where companies are invited to tender for contracts to produce public service programming, the state may also be able to rely on Altmark to exclude the application of the Community State aid rules altogether—see above n 47.

⁷¹ Bardoel, J and d’Haenens, L, ‘Reinventing Public Service Broadcasting In Europe: Prospects, Promises and Problems’ (2008) 30 Media, Culture And Society 337, 345CrossRefGoogle Scholar.

⁷² OFCOM, Second Public Service Broadcasting Review, Phase One (2008) available at <http://www.ofcom.org.uk/tv/psb_review> accessed 18 August 2008. For discussion of developments in the Netherlands, see Bardoel and Haenens, above n 71 above, 347.

⁷³ See discussion in the Broadcasting Communication, above n 17 above, para 29.

⁷⁴ Commission press releases: ‘State aid: Commission requests Germany, Ireland and The Netherlands to Clarify Role and Financing of Public Service Broadcasters’, IP/05/250, 3 March 2005; and ‘State aid: Commission requests Belgium to clarify financing of public service broadcaster VRT’, IP/06/1043, 20 July 2006.

⁷⁵ State aid E 3/2005, above n 43 above, para 72.

⁷⁶ Broadcasting Communication, above n 17 above, para 36.

⁷⁷ Ibid.

⁷⁸ Broadcasting Communication, above n 17 above, para 13.

⁷⁹ D-G for Competition internal discussion paper, ‘Application of Articles 90 paragraph 2, 92 and 93 of the EC Treaty in the Broadcasting Sector’ (mimeo, 1998).

⁸⁰ Ibid, 7.

⁸¹ Depypere, S and Tgchelaar, N, ‘The Commission’s State Aid Policy On Activities of Public Service Broadcasters in Neighbouring Markets’ (2004) 2 Competition Policy Newsletter 19 Google Scholar. The comments by these Commission insiders do, of course, mirror a much wider debate about the continuing justification for public service provision within the Member States.

⁸² Ibid, 22. On the latter point they drew on the article by Santamato and Pesarasi, above n 50, 21. See also the concerns voiced by Wiedemann, above n 18.

⁸³ State aid E 3/2005, above n 43, para 224. The Commission’s 2007 Communication on Services of General Interest also emphasises that states have wide discretion when determining the mandate of public services in light of the Lisbon Treaty Protocol on Services of General Interest: above n 63.

⁸⁴ State aid E 3/2005, above n 43 above, para 291. Support for this view may also be derived from the Commission’s efforts to ensure that the rights to popular sporting events are divided among a number of different broadcasters, on which see Commission Notice concerning Case COMP/C.2/37.398—Joint Selling of Media Rights of the UEFA Champions League on an Exclusive Basis, [2002] OJ C196/3.

⁸⁵ OFCOM, Review of Public Service Television Broadcasting (2004), para 148. OFCOM also noted at para 159 that ‘citizens’ interests can be met through many programme types and indeed may be most effectively met via programming which viewers think will entertain them as well as “make them think”’.

⁸⁶ State aid E 3/2005, above n 43, para 292.

⁸⁷ Ibid, para 355.

⁸⁸ State aid N 631/2001, United Kingdom, BBC Licence Fee.

⁸⁹ State aid NN 88/98, above n 49.

⁹⁰ Where competition among particular services, classical music channels, for example, is not viable, a decision to prefer public service over commercial provision should arguably not be excluded, particularly given the high standards and audience accountability expected of public service providers. For discussion of this issue in the rather different context of broadband provision, see Papadias, L, Riedl, A and Westerhof, J, ‘Public Funding for Broadband Networks—Recent Developments’ (2006) 3 Competition Policy Newsletter 13 Google Scholar.

⁹¹ State aid E 3/2005, above n 43, paras 299–305.

⁹² Ibid, para 240.

⁹³ Ibid, para 222, referring to the Broadcasting Communication, above n 17, para 34. The decision is thus in line with the earlier BBC News 24 ruling, where it was held that ‘the public service nature of a service cannot be judged on the basis of the distribution platform’ as well as the BBC Licence Fee and BBC Digital Curriculum decisions where state funding for digital and internet services were approved, see above nn 49 and 37.

⁹⁴ See Art 11 of the Interstate Treaty on Broadcasting, which is available in English (as amended by the ninth amendment) at <http://www.alm.de/fileadmin/Englisch/9_RAEStV_ Englisch.pdf> accessed 18 August 2008. The Interstate Treaty has been subsequently amended and a 12th amendment is now awaited.

⁹⁵ See State aid E 3/2005, above n 43, para 18.

⁹⁶ Ibid, para 63.

⁹⁷ Ibid, para 239.

⁹⁸ Ibid.

⁹⁹ Commission Explanatory Memorandum, above n 17, 6.

¹⁰⁰ State aid E 3/2005, above n 43, para 307.

¹⁰¹ Ibid, para 327. For discussion of the lack of precision in the public service mandate, see also Schulz, above n 2, 11–13.

¹⁰² State aid E 3/2005, above n 43, paras 335–6.

¹⁰³ Agreement Between HM Secretary of State for Culture, Media and Sport and the BBC, July 2006, Cm 6872, clauses 23–33. For details, see BBC Trust, ‘Public Value Test (PVT): Guidance on the Conduct of the PVT’, August 2007, available at <http://www.bbc.co.uk/bbctrust/assets/files/pdf/regulatory_framework/pvt/pvt_guidance.pdf> accessed 18 August 2008.

¹⁰⁴ BBC Trust, above n 103 above, para 5.12.

¹⁰⁵ ZDF adopted its own procedures in advance of this at the end of 2007 and details are contained in a ZDF Press Release, ‘ZDF Television Council Responsible For Approving New Digital or Telemedia Services’, 7 December 2007, available at <http://www.zdf.com/uploads/media/2007-12-07_-_ZDF_PR_Approving_new_services_01.pdf> accessed 18 August 2008.

¹⁰⁶ For discussion of these issues, see Schulz, above n 2.

¹⁰⁷ V Renner, ‘ARD und ZDF drängen mit Macht ins Internet ‘ Die Welt, 14 May 2008, 8.

¹⁰⁸ In some cases the state will already have been considering adopting similar procedures for domestic reasons. Community oversight may nevertheless speed up or influence the form in which the procedure is ultimately adopted.

¹⁰⁹ Broche, J, Chatterjee, O, Orssich, I and Tosics, N, ‘State Aid For Films—A Policy in Motion?’ (2007) 1 Competition Policy Newsletter 44, 44Google Scholar.

¹¹⁰ For comprehensive, up-to-date details, see the KORDA website of the European Audiovisual Observatory at <http://korda.obs.coe.int/web/search_aide.php> accessed 18 August 2008.

¹¹¹ Case C-17/92, above n 8.

¹¹² State aid N 481/2007, above n 58.

¹¹³ See text accompanying n 67 above.

¹¹⁴ State aid N 461/05, United Kingdom, film tax incentive.

¹¹⁵ Cinema Communication, above n 17, 8.

¹¹⁶ Cambridge Econometrics Ltd, David Graham and Associates Ltd and Rambøll Management, ‘Study on the Economic and Cultural Impact, Notably on Co-Productions, of Territorialisation Clauses of State Aids Schemes for Films and Audiovisual Productions’, May 2008. See also Commission MEMO, ‘State Aid: Future Regime for Cinema Support’ MEMO/08/329, 22 May 2008.

¹¹⁷ See above nn 14 and 63.

¹¹⁸ Bardoel and d’Haenens, above n 71, 347. Consider also pressure from publishers in Germany to restrict the provision of online text services by ARD and ZDF: Renner, above n 107.

¹¹⁹ Schulz, above n 2, 3.

¹²⁰ It will also facilitate assessment by the Commission where Member States themselves refer funding schemes under Art 88(3) EC. Greater devolution to Member States is in line with the approach outlined in the Commission’s ‘State Aid Action Plan. Less and Better Targeted State Aid: a Roadmap for State Aid Reform 2005–2009’ COM(2005)107 final, 7 June 2005, particularly at paras 12–14.

¹²¹ Commission, Explanatory Memorandum, above n 17, 2 and 5.

¹²² Ibid, 5 and 9.

¹²³ See BBC Trust decision on on-demand services at <http://www.bbc.co.uk/bbctrust/consult/closed_consultations/ondemand.html> accessed 18 August 2008; and OFCOM, ‘BBC New On-Demand Proposals—Market Impact Assessment’ at <http://www.ofcom.org.uk/research/tv/bbcmias/ondemand/> accessed 18 August 2008.