Germany Discusses Digital Age Licensing Model For Public Broadcasters

By Monika Ermert for Intellectual Property Watch
German public broadcasters at a recent hearing of Germany’s Supreme Court warned against state interference with the funding of their programmes. The appeal by Germany’s large public broadcasting organisations ARD, ZDF and radio broadcaster “Deutschlandfunk” to the highest German court is primarily about money. But it may result in a fundamental change in funding public broadcasting content in the digital age.

The German presidency still believes in public funding of high-quality content, which it underscored by announcing a “network for kids” initiative at a recent European Union conference on “More Trust in Content” in Leipzig.

In the Supreme Court case, the German broadcasters appealed to the court after state prime ministers revoked the decision of the KEF, an independent committee which calculates the financial needs of public broadcasting, and fixes the fee the broadcasters can ask from everyone owning a broadcast-receiving device.

Instead of 17.24 euros per month, the prime ministers declared that 17.03 euros was enough. The country’s economic situation, with no increase in monthly salaries for most of the population and growing unemployment figures, would have made a higher fee for the broadcasters socially unacceptable, argued the prime ministers of Baden-Wuerttemberg and Rhineland-Palatinate, Guenther Oettinger and Kurt Beck.

Most would say that 21 cents is not much, especially as the overall fee allowed the public broadcasting system to cash in over 7 billion euros in 2005. But for the public broadcasters it is a matter of principle. The lawyer for Deutschlandfunk, Gernot Lehr, warned against a complete “politicisation” of their finances once politics starts to meddle with the funding – and with what broadcasters spend it on. The complete independence of the public broadcasting system from state authorities was set up in reaction to the takeover of media during the Nazi regime.

But the time has passed when the fathers of the German constitution established the independence, private competitors say. They argue it was not foreseen that public broadcasting producing game shows or starting dating bulletin boards on the Internet.

From the perspective of the Association of Private Broadcasters and Telecommunications (VPRT) there is no “level playing field” for broadcast competition. And it is hard to compete against the well-funded public broadcasting giants who can ask for more money if they want to develop new services, warned the Federal Association of German Newspaper Publishers (BVDZ).

Juergen Doetz, president of VPRT, also said the court should discontinue broadcasters’ ability to decide on expansion into new markets on their own. The VPRT promotes the introduction of a “public value test” for new services of the broadcasters. This would also comply with request from the European Commission to draw a sharper line between commercial services and the original mandate of public broadcasters, say the critics.

The judges made clear at the hearing that they were free to adapt the law to current developments. This is to the liking of BITKOM, the German information technology industry association, which warns against the creation of new fees to feed public broadcasters. For many years owners of television and radio dishes had to pay the broadcasting fee, but with the technical convergence of TV, radio broadcasting and Internet use now, personal computer owners also might by “caught” by the GEZ, the institution collecting the broadcasting fee.

Mobile telephones are next on the menu for the GEZ, according to BITKOM spokesman Christian Spahr. “We think the current system is not in line with technological developments,” he said. Instead of creating new rules for every new technical device, fees should be based on households. Otherwise you punish the early adopters of new technology and also hardware manufacturers.”

The personal computer (PC) broadcast fee for the moment will only be collected from persons who did not register a TV dish or radio with GEZ. But BITKOM warned that the fees would be paid unfairly, for example, by small and medium-size enterprises that do not have TVs, but PCs for their staff. “Think about an architect working with CAD, or a journalist in his press bureau,” says Spahr. According to BITKOM, the fees collected for a PC worth 850 euros could add up to 300 or 400 euros over four years.

And there are more licensing fees for German “media consumers” to pay besides the fee for public broadcasting. They also pay their cable TV provider and copyright licensing fees to the various collecting societies for copying machines, VCRs, CD or DVD burners, and CD and DVDs, PCs and every other thing that is able to copy media content, be it music or television. According to BITKOM figures, 2005 consumers paid 124 million euros in levies.

BITKOM warned recently that copyright levies would double if the draft new German copyright law were enacted. The copyright levy for a multifunctional printer (printer, fax, scanner) would be 76.70 euros. BITKOM proposes to limit levies to a maximum of five percent of the price of a device. And while the public broadcasters fight against satellite TV providers to also raise a fee for customers who want to change from expensive cable TV to satellite TV, customers interested in premium media content from Hollywood movies to Champions League football events have to buy premium packages.

Politicians of the German states also favour a new model since the debate on paying broadcasting fees for PCs raged last year. The state’s Chancellory of Rhineland-Palatinate is working on the new model by the end of this year but also looks to Karlsruhe for the Supreme Court judgment. This is expected for the summer.

Observers will watch to see if there is a shift from the perception that classical broadcasting is a special area that has somewhat overruled pure market regulation in the broadcasting arena in Germany to a perception that classical broadcasting is one of multiple channels of a larger and larger media market losing its uniqueness. The latter would potentially legitimise the cashing in of the funds of citizens differently from other digital media players.

Monika Ermert may be reached at info@ip-watch.ch.