The triumph of the internet is unstoppable. More and more people are connected to the online world. Today, many young people do not even have a TV. In consequence, German broadcasters will increasingly have to deal with global providers accessed using hybrid devices allowing access to the internet as well as to conventional TV. They will compete with Google-TV, a programme which compiles popular television programs via Google’s search engine. Clearly, the existing system faces drastic structural changes. Currently three issues are under discussion: how far should public service broadcasting (PSB) extend, how much funding should it receive and how should it be governed? All these issues are common to Germany and the UK – the modalities differe in consequence of the different histories and inheritances of the two largest European PSB systems.
First, what is the contemporary remit of public service broadcasters (PSB)? For years they have known that they must be active on the internet: if they lose the youth audience, they won’t have a future. Nevertheless, there are fierce debates about the extent of German PSB internet activities. Newspaper publishers and commercial broadcasters fear declining readership and viewing and, consequently, reduced advertising revenues if PSB competes effectively.
Second, public service broadcasting funding is currently under scrutiny. When broadcasting is available via mobile phones, laptops and PDAs, is licence fee still an appropriate funding method? As the pressure to justify public service broadcasting has risen, the old Achilles heel of the public system – namely the influence of state and party bodies on broadcasting – is again heavily contested and constitutes the third contemporary issue.. The trigger for this debate was controversy over who should be the next Chief Editor of ZDF. The Director General (Intendant) of ZDF’s proposal was blocked by the Prime Minister of Hessen and his political friends. This dispute has posed the perennial question of how far it’s acceptable for politicians to influence the conduct s of broadcasters.Limiting Public Service Broadcasters’ Online Activities
1. Should the Remit grow?
Compared to the UK, German broadcasting policy is much more governed and constrained by legal precedent and decision. The political histories of the two countries do much to explain these differences. But, in consequence, decisions of the German courts, and in particular the Constitutional Court, have an importance in Germany beyond that found in the UK.
The thirteenth Rundfunkänderungsstaatsvertrag (RStV, Interstate Treaty on Broadcast and Telemedia), which came into force on 1 April 2010, defined (Art. 11a RStV) public service broadcasting as including online activities – or as it is called in German jargon: Telemedia (plural Telemedien). Telemedia should enable all social groups to participate in the information society; should foster media literacy and any specific telemedia programme must be justified in these terms (Art. 11d para 3 RStV).
The new definition of the remit became necessary following the European Commission’s decision of 24 April 2007: the European Commission requires the public service mission to be precisely defined so that public service broadcasters are not over-funded prevent by the licence fee (and thereby able to compete unfairly with commercial rivals). However, the Commission’s requirements were not easily reconcilable with German constitutional law which emphasises public service broadcasters’ autonomy. However, the new Broadcasting Treaty strictly limits public service broadcasters’ online activities. PSBs may only provide telemedia justifiable from a journalistic or editorial point of view and advertising and sponsorship are not permitted. Further, bought in feature films and television series must not be offered as video-on-demand services. The Treaty identifies seventeen types of non-permissible PSB content (the so-called negative-list) including advertising portals, advertising or classified ads, partner portals and social networks, job offers and file-sharing networks or guidebooks which are not programme-related.
These provisions, though limiting PSB’s autonomy are positive in that they mandate public service standards for broadcasters’ online activities and the Treaty’s limits to protect the competitiveness of competitors are also generally justified, though sometimes hard to reconcile with the constitutionally protected independence of the public service broadcasters). A particularly sensitive issue is the apparent exclusion of public service broadcasters from reporting on local matters (politics, sports results etc) just because doing so may potentially threaten newspapers’ business model.
A particularly controversial rule in the new Treaty (see Art. 11d para 2 RStV) is the limitation of the timing and duration of availability of PSB telemedia. Major events such as matches of the first and second German football divisions (“Bundesliga”) may not be shown until 24 hours after the event. For these periods there is no possibility of extension. Normally, telemedia content relating to a specific programme is available for seven days, an extension is possible but only if a so-called Three-step test is undertaken. Critics complain that these limits are incompatible with the public’s information needs. Although citizens have financed online content, by paying their licence fee, they are not able to access content indefinitely. Such critics argue that the legitimate interests of commercial broadcasting and press companies seem to be protected sufficiently by the seventeen item negative-list.
3. Three-Step Test
Much therefore depends on the three step test, all new, or modified, digital and telemedia provision is subject to a three-step test. The starting point is a proposal to the Director General of the public service broadcaster in question. This specifies the target group, content, direction and duration of the proposed offer (see Art. 11f para 1 RStV). Then the Broadcasting Council reviews whether the proposal is compatible with the public service remit of the respective broadcaster. For approval, the Council must find that: a) the offer meets the democratic, social and cultural needs of society, b) it positively contributes to editorial quality and c) costs are proportionate to benefits. Third parties are able to comment on proposals and expert opinion on market impact must be considered. The Broadcasting Council has to weigh all relevant factors and must explain decisions in detail. Decisions are then reviewed by the legal supervisory authority, which means by the State Chancellery of the responsible Federal State.
The three step test has changed the balance of power between the Broadcasting Councils and the Directors General of the German public service broadcasters. Councils have significantly gained in self-confidence and have received new staff and financial resources to undertake the tests. In many cases, the Broadcasting Councils have changed the Directors General’s telemedia concepts. This (surprising) development has both positive and negative aspects: it strengthens public accountability of broadcasters but also weakens their independence.
Commercial broadcasters and publishers have complained that they have no formal part in the decision process and that, furthermore, selection of experts is made by the broadcaster and not by a neutral party. However, it is the case that most economic experts so far chosen have worked for commercial broadcasting. Moreover, there is general criticism of the (considerable) costs of market research are not proportionate to their value: even the best consulting firms cannot reliably predict future market developments. Moreover, the numerous three step tests overburden the parties concerned. Accordingly, it may, in future, be better to conduct an extensive consultation on the likely market impact of a new offer rather than commission studies of uncertain value and validity.Reforming Public Service Broadcasting Funding1. Starting Point
For public service broadcasters to fulfill their remit they need funding. Currently, over 85 percent of the funding is provided by licence fee payers (with the remainder largely coming from advertising). The Bundesverfassungsgericht (Germany’s Constitutional Court) has argued that licence fee funding enables PSBs to offer programmes that comply with the constitutional requirement of diversity, regardless of audience rating, advertising contracts and government subsidies. And, despite their competence to ultimately decide on the amount of the licence fee, the Parliaments of the Federal States are largely bound by the funding recommendations of an independent body, the Kommission zur Ermittlung des Finanzbedarfs der Rundfunkanstalten (KEF, Commission to Determine the Financial Needs of the Broadcasters). As in the UK, the duty to pay a licence fees is linked to possession of a receiving device (Art. 13 para 2 RStV) and is not linked to actual use of public service broadcasting.
2. Need for Reform and Alternatives
This funding model is under great strain. As multifunctional terminals, such as PC's or mobile telephones, become more and more common, it is no longer possible to identify clearly what is and what is not a broadcasting receiver. Multifunctional terminals can be used as broadcasting receivers but usually, they serve different purposes and they may seldom or never be used to receive broadcasts. Nonetheless, possession of these new appliances means that the user is liable to pay the licence fee. This means that in Germany the younger generation in particular is against compulsory radio and TV licence fees. Although only a very small percentage of the population was affected the decision led to a storm of protest. However, courts have not finally decided whether these new forms of receiving appliances can be described as “being held ready” to receive broadcasts: numerous conflicting verdicts point to the need to change the law.
A possible alternative would be a capitation fee: This fee would have to be paid by every adult citizen, regardless of their actual media habits. It could be levied, for instance by the tax authorities in combination with income tax. However, this model has a significant disadvantage. Public service broadcasting has to be independent of the state. Funding through the state budget, as a capitation fee entails, raises the problem that state bodies, rather than the independent KEF, would be able to decide on the new tax and its uses Alternatively, a fee would be paid by each household, regardless of how many people live in the household. Places of business would also be subject to this fee, and the amount of the fee would be determined by their size and how intensively the media is used.
Currently it’s likely that the “old” licence fee will soon be replaced by a household and place of business levy. However, such a tax has recently failed in Finland due to publishers’ fierce resistance. Moreover, the internet community is likely to be vehemently opposed to a household and place of business fee. It’s doubtful whether the new fee would actually increase acceptability of public service broadcasting finance. In addition, the proposed model raises numerous legal problems of definition. Although it is argued that the circle of the fee payers can be identified more accurately than before, this is true only if it is known which people form a household. Increased administrative burdens can be expected and years of litigation. There also are uncertainties concerning European Union state aid laws as it is not yet clear whether the fee is classified as a new state aid “Neubeihilfe”. If it was, this would lead to another review of the German funding system by the European Commission. Overall, the proposed changes to the funding of public service broadcasting are associated with significant risks and uncertainties. A small would have the advantage that the previous legal basis for licence fees would continue making possible enforcement of payment obligations.The Broadcasting Councils and Broadcasters’ independence of the State1. Conflict Situation
After the blocking of re-election of ZDF-Chief Editor Brender at the end of 2009 by CDU/CSU members of the ZDF Administrative Board, there is an intense discussion about the limits of government influence in the Broadcasting Councils. The debate has grown in intensity since the Green Party (Die Grünen) challenged the current version of the ZDF State Treaty at the Bundesverfassungsgericht. A recently published legal opinion has shown that the composition of at least four Councils is constitutionally dubious and this already led to some reform proposals.
2. Composition of Broadcasting Councils and Political Independence
The pluralistic membership and public accountability of Broadcasting Councils is deeply rooted in Germany. The Councils’ role is to serve the interests of the general public by guarding against political influence and any “mainstreaming” of a restricted vision of society in programming. They are mandated to ensure that a proper diversity of views and activities in all areas of life finds expression in programming. However, the composition and size of the Broadcasting Councils varies considerably. But Councils must all include representatives of socially relevant groups such as churches, trade unions or employer associations. It is the right of such groups to select their own representatives and additionally, the Broadcasting Laws state that parliaments, government and local political associations are also entitled to nominate Council members.
The starting point of the (constitutional) debate is the principle of independence of the state in broadcasting. The public service broadcasting corporations are to facilitate the formation of free individual and public opinion. However they can only perform this remit when neither the state nor a narrow range of social groups control this process. The state may not be a broadcaster nor dominate a broadcasting company. But the Constitution and the laws stemming from it do not go so far as to exclude any state influence, rather political authorities should not dominate.
At the moment, no clear limit on state representation in Broadcasting Councils can be derived from the law though it is often argued that no more than one third of the members should be state appointees. But, as yet, there is no conclusive answer to the question of who are the state representatives. Certainly, direct representatives of State or Federal Government are counted but not necessarily the representatives of political parties supporting the government.
Current reform proposals range from minor amendments to a radical reorganization of the supervisory structure. At the moment, the major parties like CDU/CSU and SPD have little willingness to reform – because they now enjoy a significant presence in the Broadcasting Councils whereas smaller parties like the FDP or Die Grünen, which have few representatives in the Councils, are more open to change.
On the other hand, there are far-reaching proposals for disempowerment and disbanding of the Broadcasting Councils eg by transferring regulatory powers to the Landesmedienanstalten (State Media Authorities). Others propose to replace the Broadcasting Councils by so-called Expertenräte (Expert Councils) so as to push back political influence. Additionally, some propose that commercial and public broadcasting be subject to a single authority in respect of protection of minors. These models argue for control of broadcasting to be transferred outside the broadcasters but the greatest chances of success probably lies with models to reduce moderately state influence, for example, by reducing state representatives on the Councils to below 30 percent.
However, legislative changes can only take place after the Bundesverfassungsgericht has ruled on the Green Party challenge to the ZDF State Treaty. In the meantime, restraining the excessive influence of state and government in the everyday life of the Broadcasting Authority remains important. The professionalization of broadcasting governance through the three step test has had a positive impact in this respect. Further improvement would follow if transparency of the Councils’ work was strengthened by broadcasting meetings generally taking place in public and by requiring Councils to publish regularly a statement of accounts.Conclusion
Public service broadcasting in Germany remains under pressure. It is not yet clear how, and in what form, the system can survive. Its most important anchor is and remains Bundesverfassungsgericht. Its jurisdiction provides a measure of protection for public service broadcasting and has already established the remit of public service broadcasting includes online services. But the negative-list is too vague and restrictive: it’s likely to stifle innovation for fear of being stuck in legal disputes over its prohibitions and provisions. The three step test is similarly restrictive and inhibitory; taking resources which should be invested into better programmes. Hopefully new routines will soon evolve which reduce the time, resources and workload this procedure consumes.
Reform of the licence fee is inevitable. But a fee on households will produce significant legal disputes pointing towards a “small reform” whereby the fee would be levied on all devices intended for media usage. This regulation is not only practical. It also avoids a major state influence (as would be the effect of tax-based solutions, such as a capitation fee, as has been seen in the Netherlands and France recently). The independence of public broadcasting is a major social and political (and constitutionally guaranteed) good which should be the primary consideration in every kind of funding reform. Public broadcasters’ independence also requires a reduction in the number of state representatives in supervisory bodies – to what extent remains to be determined: complete exclusion of state representatives would unacceptably reduce the political assertiveness of the broadcasters. Further, reform of supervisory bodies should modernize the representation of social groups and, in particular, representation migrants and young people should be strengthened.
In the next few years Europe will be faced with significant economic challenges. It is therefore important that the political system remains stable. Public service broadcasting will play an important role in achieving this goal.
4 More precisely, the issue was the extension of ZDF Chief Editor Nikolaus Brender’s contract which had been blocked by the ZDF Administrative Board in November 2009. Representatives of the CDU/CSU political parties were in the majority on the ZDF Administrative Board (the ZDF’s Governors) and announced that they would vote against extending Brender’s contract.
9 The “three step test“ is the German equivalent to the BBC Trust’s “Public Value Test“ though it applies much more extensively than the BBC version. Similar formalities have been established in almost all European Union public service broadcasters.
14 Kommission zur Ermittlung des Finanzbedarfs der Rundfunkanstalten, 17. KEF-Bericht, published December 2009, S. 28; available under: http://www.kef-online.de/inhalte/bericht17/kef_17bericht.pdf [updated: 25.05.2010].
18 Confirmative: VG Regensburg, Urt. v. 24. 3. 2009 – RO 3K 08.1829; VG Augsburg, Urt. v. 16. 3. 2009 – Au 7 K 08.1306; VG Würzburg, ZUM 2009, p. 339; VG Hamburg, Urt. v. 24. 7. 2008 – 10 K 1261/08; VG Ansbach, ZUM 2008, p. 1000; VG Greifswald, Urt. v. 8. 7. 2008 – 2 A 2028/07. Negatory: VG Arnsberg, Urt. v. 7. 4. 2009 – 11 K 1273/08; VG Berlin, Urt. v. 17. 12. 2008 – 27 A 245/08; VG Wiesbaden, ZUM 2009, p. 262; VG München, Urt. v. 21. 11. 2008 – M 6a K 08.191; VG Münster, MMR 2009, p. 64 with critical remarks by Nolden/Schramm; VG Koblenz, K&R 2008, p. 559; VG Braunschweig, Urt. v. 15. 7. 2008 – 4 A 149/07.
19 Negatory: VG Regensburg, Urt. v. 24. 3. 2009 – RO 3K 08.1829; VG Augsburg, Urt. v. 16. 3. 2009 – Au 7 K 08.1306; VG Würzburg, ZUM 2009, p. 339; VG Hamburg, Urt. v. 24. 7. 2008 – 10 K 1261/08; VG Ansbach, ZUM 2008, p. 1000; VG Greifswald, Urt. v. 8. 7. 2008 – 2 A 2028/07. Confirmative: VG Arnsberg, Urt. v. 7. 4. 2009 – 11 K 1273/08; VG Berlin, Urt. v. 17. 12. 2008 – 27 A 245/08; VG Wiesbaden, ZUM 2009, p. 262; VG München, Urt. v. 21. 11. 2008 – M 6a K 08.191; VG Münster, MMR 2009, p. 64 with critical remarks by Nolden/Schramm; VG Koblenz, K&R 2008, p. 559; VG Braunschweig, Urt. v. 15. 7. 2008 – 4 A 149/07.
21 This model has been declared unconstitutional by Kirchhof, Gutachten über die Finanzierung des öffentlich-rechtlichen Rundfunks, available under: http://www.ard.de/intern/standpunkte/-/id=1454042/property= download/ nid=8236/5envxa/ Gutachten+zur+Rundfunkfinanzierung.pdf [updated: 25.05.2010], p. 30 et seq.
25 See especially the arguments in the open letter of 35 leading constitutionalists, published on 22.11.2009;at: http://www.faz.net/s/Rub510A2EDA82CA4A8482E6C38BC79C4911/ Doc~EF661F8EF700742C58F6D9535A24ECFEA~ATpl~Ecommon~Scontent.html [updated: 25.05.2010].
26 That is the Councils of Radio Bremen, Mitteldeutschen Rundfunk (MDR), Deutschlandradio (DLR) and especially the Council of ZDF; see Hahn, Die Aufsicht des öffentlich-rechtlichen Rundfunks, p. 145 et seq.
30 See Bumke, Die öffentliche Aufgabe der Landesmedienanstalten, p. 145 et seq.; Hartstein/Ring/Kreile/Dörr/Stettner, Rundfunkstaatsvertrag, Band II, pre § 11 marginal no. 58 et seq.; Lerche, in: Bullinger/Kübler, Rundfunkorganisation und Kommunikationsfreiheit, p. 15 et seq., 75 et seq.; BVerfGE 31, 314 (327 & 329); BVerfGE 83, 238 (334).
33 Helmes, in: epd medien 04/2007, p. 10 (11); Schneider, in: epd medien 89/2003, p. 14 and in epd medien 66/08, p. 11; Doetz, in: epd medien 59/2007, p. 5 (8); Schmid, in: Schwartmann, Praxishandbuch Medien, IT- und Urheberrecht, p. 93.
35 See Hoffmann-Riem, Rundfunkaufsicht zwischen Staatsfreiheit und Staatseinfluss, p. 65; Fehling, Die Konkurrentenklage bei der Zulassung privater Rundfunkveranstalter, p. 55; Bumke, Die öffentliche Aufgabe der Landesmedienanstalten, p. 119 ff.; Hahn, Die Aufsicht des öffentlich-rechtlichen Rundfunks, p. 229.
36 Amongst others Altenhain, in: Klumpp/Kubicek/Roßnagel/Schulz, Medien, Ordnung und Innovation, p. 371; Degenhart, in: Bonner Kommentar zum Grundgesetz, Art. 5 GG marginal no. 891; Rossen-Stadtfeld, in: AfP 2004, p. 1 (6).
37 See the reports in the newspapers Frankfurter Allgemeine Zeitung on 25.03.2010, at: http://www.faz.net/s/Rub475F682E3FC24868A8A5276D4FB916D7/Doc~EB35E8DDE9E464F51A6C7808CC56E3826~ATpl~Ecommon~Scontent.html an in Süddeutsche Zeitung on 03.02.2010, at: http://www.sueddeutsche.de/medien/vorschlag-zur-reform-des-zdf-es-koennte-so-einfach-sein-1.56055 [updated: 25.05.2010].