Neelie Kroes, the Dutch free market liberal competition commissioner, has announced that next week the European Commission will launch an investigation on the use that German public broadcasters such as ARD or ZDF make of the licence fee (see article in The Guardian). Although the licence fee itself cannot be seen as an illegal subsidy, it is unclear to what extent that money can be used to fund online services. Clearly, the investigation could have important repercussions for the BBC�s online services too. The question is whether these activities go beyond their public service remit and distort free competition in the broadcasting market. Some fear that the Commission will rule that the subsidies paid for those broadcasters� websites is illegal.

This is likely after the quite radical change in the Commission�s approach in the BBC Digital Curriculum case in October 2003. Whereas the Commission had previously recognised that �Public service broadcasters may develop and diversify their activities in the digital age to the extent that they are addressing the same democratic, social and cultural needs�, it later departed from established jurisprudence and its own case law and confined PSBs social remit to the area of traditional broadcasting, limiting their activities in the online world to being a complement to existing activities and clearly distinguishable from commercial activities. In short, a market failure argument.

Whether this is the way to go is debatable and links with the lack of clear definitions at MS level on the remit of PSB. However, there is some inconsistency in arguing that when a service is offered by a public service broadcaster on the Internet it is �commercial�, while when the same content is delivered by a broadcasting signal it is seen as part of the public service remit (that is, non commercial). One wonders where on the way was the �technological neutrality� principle that so often fills the mouths of Commission�s officials abandoned.