Measuring Public Value with the Public Value Test: Best or Worst Practice?

The shift from a so-called public service broadcasting into a public service media policy project provokes diverging reactions. Some claim the opportunities of the new media environment are not adequately grasped (Murdock 2004; Ferrell Lowe 2010). Public broadcasters should expand their activities on the Internet and mobile platforms in order to enhance the development of a public sphere in which all citizens can participate regardless of their 'profitability' for media companies. Others - notably private media companies - reject such a view alleging public broadcasters' service delivery should be heavily constrained in the digital age in order to protect private investments, creativity and, ultimately, innovation (ACT et al. 2009).

Until the 1980s national (and in some cases, regional) governments autonomously decided on the organisation of public service broadcasting. They defined the task (or so-called 'public service remit') of public broadcasters, decided on funding modalities and monitored the performance of public broadcasters. Given the liberalisation of the broadcasting market in the 1980s (by means of the Television without Frontiers Directive, 1989), this situation has come to an end. Although Member States are still exclusively competent in the area of public service broadcasting, they have to accept that competition rules - which are being enforced in all sectors of economic activity - have a say in the future course of public service broadcasting policy (Donders 2010; Wheeler 2010; Donders and Pauwels 2008).

The European Commission that enforces the competition rules in first instance, has been confronted with private sector concerns about the expanding role of public broadcasters. Not surprisingly, private media companies regard this expansion as unfair competition and have filed numerous complaints with the Directorate General for Competition alleging that the new media activities of public broadcasters should be curbed. Needless to say as well that public broadcasters and Member States are far from happy with the intervention of the European Commission that is said to subordinate cultural to economic policy objectives (Donders and Pauwels 2008).

In order to reach some sort of compromise between the apparent diverging positions on this issue, the European Commission has asked several Member States to design and implement a test for public broadcasters' new media services (Donders and Pauwels 2010). This test has been modelled after the British 'Public Value Test'. It is a tool that evaluates ex ante whether a proposed new media service lives up to pre-set public service objectives and does not overly distort the market. A balancing act between more elevated public interest objectives on the one hand and down to earth market logics on the other hand.

At present, Member States like Germany, Belgium, the Netherlands, Norway and Ireland are complying with the European Commission's request. Opponents claim the test is a bureaucratic monster that is overly expensive and can hardly be expected to objectify essentially political decisions on the width of government intervention in the market (Bardoel and Vochteloo 2009). Proponents argue a test is 'natural' as all services of public broadcasters should exhibit sufficient public value and, in doing so, make distortions of the market admissible (Suter 2008).

This chapter studies the British Public Value Test in order to evaluate whether it is indeed a tool that can find a balance between public and market interests. The chapter consists of six parts. In part one the evolution from public service broadcasting into public service media and, in addition, the increasing need to demarcate public from commercial service delivery is addressed. Part two briefly discusses European State aid policy as a basis for asking Member States to implement a public value test. After that, the main aspects of the British Public Value Test and its implementation is practice are discussed. Fifthly, the results from the British Public Value Test are evaluated. Finally, a number of conclusions and policy recommendations - also for other sectors in which competition issues are at play - are outlined.