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Monopolisation of the electronic media and possible abuse of power in Italy

Doc. 10195
3 June 2004

Report
Committee on Culture, Science and Education
Rapporteur: Mr. Paschal Mooney, Ireland, Liberal, Democratic and Reformers’ Group


Summary

The concentration of political, commercial and media power in Italy in the hands of one person, Prime Minister Silvio Berlusconi, is recognised as an anomaly across the political spectrum. Successive Italian governments since 1994 have failed to resolve the problem of conflict of interest and appropriate legislation has not yet been adopted by the Parliament.

The television market is dominated by the duopoly of Mr Berlusconi’s Mediaset and its main rival, the public broadcasting company RAI, which has always been a mirror of the political system. The newly adopted law on the reform of the broadcasting sector may not effectively guarantee greater pluralism and it manifestly allows Mediaset to expand even further.

The negative image that Italy is portraying internationally could hamper the efforts of the Council of Europe in promoting independent and unbiased media in the new democracies. A series of recommendations are made to the Italian authorities to enhance media pluralism and to put an end to the long-standing practice of political interference in the media.

I.          Draft resolution [Link to the adopted text]

1.         Italy is a founding member of the Council of Europe and strongly supports the ideals for which it stands. The Assembly is therefore concerned by the concentration of political, commercial and media power in the hands of one person, Prime Minister Silvio Berlusconi.

2.         The Parliamentary Assembly cannot accept that this anomaly be minimised on the grounds that it only poses a potential problem. A democracy is judged not only by its day-to-day operations but by the principles the country upholds to its own citizens and internationally. The Assembly recalls that, in accordance with Article 10 of the Convention for the Protection of Human Rights and Fundamental Freedoms and the case-law of the European Court of Human Rights, states are under a duty to protect and, when necessary, take positive measures to safeguard and promote media pluralism.

3.         The Assembly deplores the fact that several consecutive Italian governments since 1994 have failed to resolve the problem of conflict of interest and that appropriate legislation has not yet been adopted by the present Parliament.  It disagrees that the leading principle of the Frattini Bill currently under consideration - that only managers, not owners, should be held responsible - provides a genuine and comprehensive solution of the conflict of interest concerning Mr Berlusconi.

4.         Through Mediaset, Italy’s main commercial communications and broadcasting group and one of the largest in the world, Mr Berlusconi owns about half of the nation-wide broadcasting in the country. His role as Head of Government puts him also in a position to influence indirectly the public broadcasting organisation RAI which is Mediaset’s main competitor. As Mediaset and RAI command together about 90% of the television audience and over three quarters of resources in the sector, Mr Berlusconi therefore has an unprecedented control over the most powerful medium in Italy.

5.         This “duopoly” in the television market is in itself an anomaly from an anti-trust perspective. The status quo has been preserved even though provisions affecting media pluralism in the legislation have twice been declared anticonstitutional and the competent authorities have established the dominant positions of RAI and the three TV commercial channels of Mediaset. An illustration of this situation has been a recent decree of the Prime Minister, approved by Parliament, which allowed the third channel of RAI and Mediaset’s Retequattro to continue their operation in violation of the existing anti-trust limits until the adoption of new legislation. Competition in the media sector is further distorted by the fact that the advertising company of Mediaset, Publitalia ’80, has a dominant position in TV advertising.

6.         The Assembly believes that the newly adopted law on the reform of the broadcasting sector (“Gasparri Law”) may not effectively guarantee greater pluralism simply through the multiplication of TV channels in the course of digitalisation. At the same time it manifestly allows Mediaset to expand even further as it leaves the possibility of market players to have monopoly in a given sector without ever reaching the anti-trust limit in the overall Integrated System of Communications (SIC). The Assembly notes that because of these concerns, the previous version of the law was opposed by the President of the Republic.

7.         The Assembly is particularly concerned by the situation of RAI, which is contrary to the principles of independence laid down in Assembly Recommendation 1641 (2004) on public service broadcasting. RAI has always been a mirror of the political system of the country and the internal pluralism has moved from the proportionate representation of the dominant political ideologies in the past to the “winner takes all” reflection of the present political set up. The Assembly notes with concern the resignations of the Chairperson of RAI and of one of the most popular journalists in protest over the lack of balanced political representation in the Council of Administration and over political influence on RAI’s programming.

8.         While the printed media in Italy has traditionally provided greater pluralism and political balance than the broadcasting sector, most Italians receive their news through the medium of television. The high cost of newspaper advertising relative to TV advertising is having a damaging effect on the printed media in Italy. However, the Assembly wishes to record its approval of Government measures to help small- and medium-sized newspapers and other measures to boost newspaper readership.

9.         The Assembly is extremely concerned that the negative image that Italy is portraying internationally because of the conflict of interest concerning Mr Berlusconi could hamper the efforts of the Council of Europe in promoting independent and unbiased media in the new democracies. It considers that Italy, as one of the strongest contributors to the functioning of the Organisation, has a particular responsibility in this respect.

10.       The Assembly points out that several international bodies, such as the OSCE representative on Freedom of the Media and, most recently, the European Parliament, have expressed concerns similar to its own. It welcomes the measures for safeguarding media pluralism proposed in the Resolution of the European Parliament of 22 April 2004 on “risks of violation, in the EU and especially in Italy, of freedom of expression and information (Article 11(2) of the Charter of Fundamental Rights)”, namely that the protection of media diversity should become a priority of EU competition law.

11.       The Assembly therefore calls on the Italian authorities to:

i.          deal urgently and convincingly with the problem of conflict of interest, namely by ensuring that company owners also assume responsibility;

ii.         ensure that legislation and other regulatory measures put an end to the long-standing practice of political interference in the media, taking into account in particular the Committee of Ministers’ Declaration on freedom of political debate in the media, adopted on 12 February 2004;

iii.         promote specific legislative and regulatory measures which not only promote pluralism in general, but urgently break up the current RAI-Mediaset duopoly and support the printed media, along the lines of Committee of Ministers’ Recommendation No. R (99) 1 on measures to promote media pluralism;

iv.         consider specific measures to ensure that media convergence and digitalisation would guarantee pluralism of content;

v.         initiate measures to bring the functioning of RAI in line with Assembly Recommendation 1641 (2004) on public service broadcasting, with the declaration of the 4th European Ministerial Conference on Mass Media Policy in Prague and with Committee of Ministers’ Recommendations No. R (96) 10 on the guarantee of the independence of public service broadcasting and Rec (2003) 9 on measures to promote the democratic and social contribution of digital broadcasting;

vi.         give a positive international example by proposing and supporting initiatives within the Council of Europe and the European Union promoting greater media pluralism at European level.

12.       The Assembly asks the Venice Commission to provide expert analysis of the Gasparri Law and the Frattini Bill.

II.         Draft recommendation

The Parliamentary Assembly of the Council of Europe refers to its Resolution …. (2004) on monopolisation of the media and possible abuse of power in Italy and recommends that the Committee of Ministers of the Council of Europe:

i.          give appropriate follow-up with respect to the media situation in Italy in order to assist the Italian authorities in their efforts to ensure compliance with European principles and standards;

ii.         instruct its relevant bodies to:

a.         conduct a comprehensive study of media concentrations in Europe and consider appropriate measures beyond those already contained in Committee of Ministers’ Recommendation No. R (99) 1 on measures to promote media pluralism;

b.         work closely with the European Union in order to ensure that appropriate measures at European level strengthen media pluralism;

c.         consider the adoption of a specific recommendation on conflict of interest in the media sector.

III.        Explanatory memorandum[1]

by Mr Mooney

Preliminary remarks

1.                  Italy has been a driving force in European integration, one of the founding members of the Council of Europe and a major contributor to its functioning.

2.                  In recent years, however, Italy has internationally gained a negative image due to the unique concentration of economic, political and media power in the hands of one person, Prime Minister Silvio Berlusconi. Even influential parliamentarians of his own party, Forza Italia, acknowledge that this is an “anomaly”, although they do not see it is a threat to freedom of expression. Mr Berlusconi, through the Fininvest holding company, owns 51 % of Mediaset, Italy's biggest privately-owned communications and broadcasting group and one of the largest in the world, able to control all aspects of the television business - signal broadcasting, in-house television production, the acquisition of film and drama rights and the collection of advertising. Most importantly, Mediaset controls RTI, the company which holds the broadcasting licences for the three TV commercial channels, Canale 5, Italia 1 and Retequattro; and the powerful advertising agency Publitalia ‘80, which has a large portion of the advertising market. Fininvest also has a controlling stake in Mondadori, Italy’s largest book and magazine publishing group. Mr Berlusconi’s brother, Paolo Berlusconi, owns the national newspaper Il Giornale. Mr Berlusconi is thus the owner of about half of the broadcasting market and is in a position in which he could influence the public broadcaster RAI.

3.                  The state of pluralism in the Italian media has been a matter of concern for the highest Italian institutions including the President of the Republic and the Constitutional Court.

4.                   The media situation in Italy has equally been addressed at the highest international level. In Recommendation 1589 (2003) the Parliamentary Assembly stated that “In Italy, the potential conflict of interest between the holding of political office by Mr Berlusconi and his private economic and media interests is a threat to media pluralism unless clear safeguards are in place, and sets a poor example for young democracies”. In his last report to the OSCE Permanent Council, the former OSCE Representative on Freedom of the Media Freimut Duve said that “Italy is setting a very dangerous precedent that could seriously influence the media structure in other OSCE states, not to mention it also undermines the position of this Office regarding media monopolisation”. The European Parliament adopted on 22 April 2004 a Resolution on the “risks of violation, in the EU and especially in Italy, of freedom of expression and information (Article 11(2) of the Charter of Fundamental Rights)”.

5.                   Even more worrying is the fact that in certain Central and Eastern Europe countries, where the concentration of the media sector and its amalgamation with political power is growing, the term “berlusconisation” of the media has gained relevance.

6.                   On 1 October 2003, a motion for a recommendation on the “Investigation of the possible monopolisation of the electronic media and abuse of power in Italy (Doc. 9947) was tabled by Mrs Severinsen and others in the Parliamentary Assembly. It was referred for report to the Committee on Culture, Science and Education.

7.                   The Rapporteur, accompanied by the Co-Secretary of the Committee Bonnie Theophilova, made two study visits to Italy, on 3-5 November 2003, and from 30 March to 2 April 2004. The Rapporteur held extensive meetings with parliamentary committees involved in the media and conflict of interest legislation and in the parliamentary monitoring of the public broadcaster RAI, with the Minister of Communication and the Under-Secretary of State responsible for Information and the Press, with journalists and media associations (see appendix). The Rapporteur was generally impressed by the favourable response and spirit of cooperation of those he met. He wishes to thank in particular the Italian delegation to the Parliamentary Assembly and its Chairman, Claudio Azzolini, as well as the secretariat of the delegation.

8.                   As the Rapporteur made clear during the discussions, the aim of the visits was by no means to meddle in internal affairs nor to set up some sort of international tribunal for Italy. Nobody contests the viability of the Italian democracy and the ability of its parliamentary forces and its state institutions to resolve its problems. The aim of this report is to weigh the Italian media situation against the highest international standards which the Council of Europe (and therefore Italy as a member country) should defend.

9.                   Although Mr Berlusconi has a dominant position in the commercial TV sector, the real problems arise out of his holding office as Prime Minister. The Rapporteur has therefore chosen to focus his attention on two aspects that are the direct responsibility of the Prime Minister – namely ensuring the independence of the public service broadcaster (which is also the main competitor for Mr Berlusconi’s commercial television) and promoting legislation which defends media pluralism.

General outline of the media situation

-                       a/ media and politics

10.                It is impossible to consider the current media situation in Italy without placing it in the more general political context. One needs to keep in mind, in particular, the unprecedented shake-up of the Italian political system over the last decade. Media and politics have always been interwoven in Italy. The traditional political parties of the FirstRepublic had divided all the spheres of public life into areas of influence and the lowest echelons of the public broadcaster RAI (which for many years was a monopoly) were “given” to the left. Even today, many of the grievances of the journalists about political pressure in their work are dismissed by the ruling coalition as typical leftist rhetoric. “Communist” and “fascist” are still adjectives which often substitute objective and balanced discussion. Even “The Economist” magazine was labelled as a “communist” publication by the supporters of Mr Berlusconi after it published in 2001 a photograph of the future prime minister with the headline “Why Berlusconi is Unfit to Govern Italy”[2]

11.                But maybe the most eloquent example of political hands-on on the media was the so-called “lottizzazione” system in RAI, whereby the three channels were traditionally assigned to the three main political parties– Christian Democrats, Socialists and Communists. Hence, traditionally, “pluralism” in the electronic media has meant not necessarily to have a platform for independent and balanced views, but rather for carefully partitioned and proportioned expression of political ideologies.

12.                The temptation to put the media into a strait-jacket is nothing new; what has changed, however, is that the “lottizzazione” principle in the electronic media has been replaced by the “winner takes all” approach characteristic of the new electoral system. This in itself suggests that any politically-regulated “pluralism” would be further reduced. On the top of it, it so happens in the current political situation that the “winner” also owns almost the entire market of commercial television.

13.                The political philosophy of Mr Berlusconi and his allies apparently suggests that his electoral victory and strong parliamentary majority gives him a free reign in governing the state institutions.  Also, his “marketing politics” approach means that for him TV has a strategic importance. It is therefore not surprising that in the run-up to the European elections, in which he is a candidate, Mr Berlusconi has recently significantly multiplied his TV appearances, even in sports shows. An independent media watchdog, the Osservatorio di Pavia, found that Mr Berlusconi's presence on television in February accounted for 42% of news time dedicated to politicians[3].

-                       b/ the TV duopoly

14.                The so-called “duopoly” in the electronic media (RAI – Mediaset) is in itself an anomaly from the point of view of market competition. The two principal operators, RAI and Mr Berlusconi’s Mediaset, control half the over-the-air channels in the country, about 90% of the television audience , and over three quarters of resources[4] in the sector[5]. The dominant position on the market of RAI and Mediaset (namely RTI, but also Publitalia, which collects the television advertising revenues) has been officially established by the competent Italian authorities[6]  The Italian market for television advertising has the highest level of concentration in Europe.

15.                Politics, not just the market, is again to blame for this situation. In the late 1970s and the 1980s, Silvio Berlusconi began challenging the monopoly of RAI by developing a network of local TV stations, which eventually operated like a national network in disguise, with fully coordinated programming schedules. This de facto national broadcasting was finally legalised in 1990 by Law n. 223 or the so-called “MammÝ law”, named after the then Minister for telecommunications. By that time, Mr Berlusconi’s programmes had reached 45% audience share and 60% of the advertising revenue: the duopoly was clearly in place. Despite fierce opposition in parliament; a 1994 ruling of the Constitutional Court against a measure in the law allowing a single company to own three private networks and three referenda in 1995, it was only in 1997 that the Broadcasting Act n. 249 known as the “Maccanico Law” (named after the then Minister of PTT) promoted further pluralism and established new anti-trust measures.

16.               However, these anti-trust measures are not respected. As regards free nationwide terrestrial television, the Maccanico law established a numerical limiton the number of licences which can be held by a single person: 20% of the network capacity, that is, currently a maximum of two channels out of the 11 available frequencies. Both RAI and Mediaset have three. In addition, pay and free TV terrestrial broadcasters may not accumulate more than 30% of the resources of the television sector. [7] The law also set up the Communications Authority AGCOM (AutoritÓ per le Garanzie nelle Comunicazioni) to ensure fair market competition, protect rights of citizens and pursue technological innovation.

17.                On the basis of these provisions, the Constitutional Court issued a ruling in 2002 by virtue of which by 31 December 2003 RAI should broadcast its third channel without advertising and Mediaset should transfer its Retequattro channel onto satellite. Mediaset opposed this decision, arguing that this would put the survival of Retequattro at risk because of reduced advertising revenues and would cause the loss of many jobs.

18.              In July 2002 the President of the Republic, Carlo Azeglio Ciampi, issued a warning on the immediate need to frame a law that would safeguard pluralism of information in Italy. He ended his message by saying “Without press pluralism and impartiality, there is no democracy”.

19.                As a result, the government initiated a reform of the broadcasting sector, known as the Gasparri bill (named after the current Minister of Communication), setting it on the path of digitalisation. The draft abolishes anti-trust limits in separate sectors, thus allowing Mediaset to keep its third channel. The bill is subject to fierce criticism by the opposition which sees it as a way by which the Prime Minister can keep and further expand his media empire. After it was finally adopted at the end of 2003, the President of the Republic vetoed it because he did not think it guaranteed pluralism.

20.                While awaiting final adoption, on 23 December 2003 Mr Berlusconi signed a decree allowing Retequattro and RAI 3 to continue operating under the present conditions until 30 April 2004. The decree won parliamentary approval on 17 February through a confidence vote. The Gasparri bill was finally approved by the Senate one day before this deadline, on 29 April.

-                       c/ variety in the electronic media

21.                All in all, there are 11 concessionaries for national analogue broadcasting. Three of them belong to RAI and two to Mediaset (the third Mediaset channel, Retequattro, operates on the basis of an interim ministerial authorisation). The prime time audience of RAI and Mediaset in 2002 was respectively 45.5% and 44.1%, with all the remaining channels only totalising 10.4% (two of them – Home shopping Europe and Elefante Telemarket are teleshopping channels). This goes to show that even the La 7 group (Lombardian entrepreneurs led by Marco Tronchetti Provera who owns Pirelli and Telecom Italia), which was born out of an attempt to establish a real "third pole of television" in Italy, has not really succeeded. In addition there are about 500 local TV and around 2000 local radio broadcasters. Viewers can choose from 10 to 15 regional and local channels free of charge, throughout almost the entire country.

22.                Right wing political forces believe that there is enough pluralism in the Italian media: according to them the newspapers which are against the government outnumber those in support by 75-80% and most TV programmes openly criticise the ruling majority. Mediaset’s channels are balanced, they say: there is, on the one side, Retequattro’s news programme, presented by Emilio Fede who openly declares that Berlusconi is “like a brother”, but, on the other, there is the news programme on Canale 5 which has very high ratings and the reputation of being neutral.

23.                Of course, there is not necessarily a direct link between what is shown on TV and how well people are informed and how they form their opinions. Another one of the favourite arguments of centre-right political forces is that Mr Berlusconi lost previous elections despite his TV ownership.

24.                It should not be forgotten, though, that TV has much greater power in Italy than in most European countries: Italians watch it on average 4 hours a day.

25.                Quality across the TV spectrum has gone down in a dramatic way with commercial competition. It is argued that RAI and Mediaset have similar programmes, with similar contents, and with the only purpose of attracting audience. There have been heated debates over the legitimacy of such “trash television”. Italian ministers and media reacted with fury at an article in the UK's Financial Times by Tobias Jones saying Italian television had become sleazy, undemocratic and dumbed-down and that the Italian television studio had replaced the senate and "soft porn has replaced hard news". Mr Jones’ claims were dismissed by the communications minister Mr Gasparri who told La Repubblica newspaper: "It's a mix of sanctimoniousness and of Marxism, worthy of a country where there is still a section of the parliament where men wear a wig”[8]. Franca Ciampi, wife of the President of the Republic, in 2001 publicly strongly criticised contemporary Italian television, defining it as culturally irrelevant and “deficient”, and prompting the young generation to return to reading.

-                       d/ the press

26.                Italy has a very well-developed print media sector expressing a wide spectrum of political views, but newspaper readership is lower than in other countries, with less than 6 mln copies/day. The government makes direct and indirect subsidies to small and medium-sized newspapers. A recent government move (decree-law n. 353/2003) to allow more accessible postal fees for editorial products, has been welcomed by, the union of small and medium size press USPI. The Undersecretary of State at the Presidency of the Council of Ministers responsible for the information and the press, Paolo Bonaiuti, intends to present a bill which he hopes will stimulate newspaper circulation by breaking the current newsstand monopoly.

27.                While there is a consensus that diversity of news and views exists in the print media, there have been reports of political pressure on the Il Corriere della Sera, the daily with the widest circulation, run by a conservative industrialist. The editor-in-chief, Ferruccio de Bortoli, resigned last year, giving apolitical and personal motives. Some journalists at Il Corriere della Sera published a statement in the paper a day earlier expressing dismay at what were then rumours that Mr de Bortoli would resign, and denouncing "intimidation linked to the government sphere"[9].

-                       e/ advertising

28.              A common problem for all the press in Italy is the fact that more than half of all advertising investments are absorbed by TV (commercial and public) – twice as much as in the UK. Advertising fees in television are therefore much lower than in the press and amongst the lowest of Europe. This can in the long term pose a threat to the independence of the press.

29.                Advertising takes a prominent position on Italian television - 12% hourly for public and 18% for national private channels and 20% of hourly limits on local channels. It contains a unique feature called telepromotion. This means that in addition to the proper commercial breaks, TV presenters would suddenly give “consumer advice” in the midst of their shows. Under the present legislation telepromotions are calculated within the overall advertising time, but this changes with the Gasparri law (para 57).

The public service broadcaster RAI

30.                RAI suffers from all the problems of the Italian public sector, which has traditionally been bloated and dominated by a spoils system. It is still one of the largest public service broadcasters in Europe, with over 4000 journalists. It is funded partly through licence fee and partly through advertising. The licence fee (99.60 euros in 2004) is lower than the average. For many years it had severe financial difficulties and now suffers from an identity crisis. Its cultural decline is widely recognised, although the news bulletin TG1 of its first channel is still the most watched and respected source of information.

31.                In 1993 RAI was saved from bankruptcy by Mr Ciampi who was then Prime Minister. A team of experts, known as “the professors”, formed an administrative council which had to draw up a plan for economic revival. After his electoral victory in 1994 Mr Berlusconi criticised the “absurd” way in which RAI was run, its huge deficit and the fact that the public service broadcaster was against the ruling majority. When the decree for economic revival came up for renewal before parliament, the cabinet attached modifications to it which would have meant dismissing the council and handing over the nomination of the RAI board to the government. The administrative council and the Director-General of RAI resigned in protest. The modifications had to be withdrawn after President Scalfaro opposed tham and the final text therefore reaffirmed that the responsibility for monitoring the appointment and management of RAI remained the exclusive competence of the Speakers of the two houses of parliament. A new five-person board was then appointed. [10]

32.                This rule – a five-member Council of Administration, appointed by the Speakers of the two houses – was still valid until the adoption of the Gasparri law, although it was considered as temporary.

33.                RAI has therefore always been governed in a highly politicised way. Since the election of Mr Berlusconi in 2001, however, the Council of Administration has gone through an unprecedented wave of changes and the crisis of the institution has further deepened.

34.                In February 2002, RAI’s president Roberto Zaccaria, who was appointed by the previous left-wing majority, resigned after a controversy with the government. In March 2002 RAI’s presidency was assigned to Antonio Baldassarre, a former president of the constitutional court and allegedly being close to the National Alliance, one of Mr Berlusconi’s coalition partners. He declared that he would carry out his duties “with the greatest impartiality”. The two opposition board members resigned in November 2002 in protest over the financial and cultural crisis, the lack of pluralism and what they saw as attempts to destabilise the public service broadcaster. The board also took the decision to move the headquarters of one of RAI’s channels to Milan – as claimed by the BBC, in order to please another coalition partner, the Northern League[11]. The opposition accused Mr Berlusconi of failing to respect the independence of the public broadcaster. Eventually the whole board, together with Mr Baldassare, fell. 

35.                Mr Berlusconi also faced a wave of accusations that he was trying to nominate directly the next head of RAI and to reduce the public television to junk broadcasting when he suggested appointing Mario Resca (head of Italian McDonalds) as president.

36.                Paolo Mieli, a former editor of Corriere della Sera and editorial director of the pro-opposition RCS press group, was appointed as president by parliament in March 2003 in an attempt to appease allegations that the government was trying to monopolise the board of RAI. However, he laid down conditions which he hoped would guarantee the independence of the institution, such as a say in the appointment of the Director-General and the reinstatement of two critical journalists. Unable to reach an agreement, he resigned without even taking office.

37.                The Chairperson who was then elected and still in office at the time of the Rapporteur’s visits, Lucia Annunziata, is well known for her left-wing ideas. She is a journalist, not a political figure. She resigned shortly after the final adoption of the Gasparri law, in protest against what she saw as an “occupation” of the Council of Administration, as the remaining four board members and the Director General were all close to Mr Berlusconi. This had made decision-making in the board extremely difficult. During the first visit of the delegation, a meeting with Mrs Annunziata was refused with the explanation that if she expressed her own views, they would go against those of the rest of the board and vice-versa. The delegation had an interesting meeting with Mrs Annunziata during the second visit, but failed to meet other board members due to their unavailability.

38.                Although most journalists are believed to be left-wing, the managers and directors have been gradually replaced with people close to the ruling coalition. In February 2004 Mrs Annunziata told a group of foreign correspondents: “I know for certain that Berlusconi picks up the telephone and rings the members of the board to suggest appointments and influence decisions on programmes". "The Prime Minister contacts RAI executives directly to tell them what to do and what not to do. This is at least what is said to me to justify certain decisions taken in the corporation." The other members of the Board denied ever having been put under pressure by Mr Berlusconi[12].

39.                However, Mrs Annunziata was convinced that Mr Berlusconi does not and cannot control everything and everybody in RAI. “It is an ongoing battle but he has not won the war”. She personally intervened when Mr Berlusconi was recently being interviewed on a sports show on RAI and in a long speech about football matters as Chairman of AC Milan, made some allegorical references to pre-electoral issues. Mrs Annunziata called him live in the studio and warned him not to abuse public space that did not pertain to politics. Subsequent newspaper coverage was equally critical of Mr Berlusconi’s intervention.

40.                The delegation heard complaints about day-to day political interference with the work of journalists, about self-censorship for fear of losing their jobs and even heard evidence of journalists submitting their papers for checking and corrections to government representatives. It is very difficult for an independent outside mission to check these claims. A few facts though deserve to be mentioned:

41.                – a/ the case of popular journalists Enzo Biagi and Michele Santoro. Mr Biagi is the dean of Italian journalism and enjoys huge respect across the political spectrum. His programme “Il Fatto” (the fact) on RAI 1, which made a subtle analysis of Italian political life, was very popular. The straw that broke the camel’s back was a programme in 2002 in which he had invited the Oscar winning actor and film director Roberto Benigni. Mr Benigni had made a few provocative jokes about Mr Berlusconi, then candidate in the forthcoming elections. Mr Santoro’s programme “SciusciÓ” on RAI2 was also very popular, although even more provocative and controversial. It was seen as a pillar of all attacks against Mr Berlusconi. In prime time,
during the election campaign, he invited onto his show a comic who had written a book on Mr Berlusconi and made allegations of links with the Mafia. Even the opposition agrees that Mr Santoro was not impartial but concedes that this is normal by Italian journalism standards.

42.                At a press conference during an official visit in Sofia, Bulgaria, Mr Berlusconi accused MM. Biagi, Santoro and a comedian, Mr Luttazzi, of making “criminal use” of public television. Shortly after that their contracts were not renewed and the programmes were taken off the air. Mr Santoro is still on RAI’s payroll after winning his case in court, but he is not given any work

43.              Mr Berlusconi’s supporters argue that these cases were isolated. RAI journalists, on the other hand, say that because of the popularity and prestige of these two leading presenters their removal has had a chilling effect on all RAI staff.

44.              – b/ when Mr Berlusconi likened a German MEP to a guard in a Nazi concentration camp at a sitting of the European Parliament, it was RAI’s Tg1 which proved to be more zealous than Mediaset and only showed voiced-over pictures of the incident rather than an unedited transmission of his remarks.  RAI journalists claim that generally speaking, RAI’s coverage of the activities of the Prime Minister tries to spare him uncomfortable moments, especially during his court trials.

45.              – c/ RAI was also accused for its lack of impartiality in the coverage of the war in Iraq and its decision not to broadcast the 15 February peace march, saying it would "put undue pressure on politicians". Most recently, the Union of Journalists of RAI (USIGRAI) complained that during the electoral victory of the Socialists in Spain, live coverage came from Mr Aznar’s headquarters in prime time and that the headquarters of the Socialists were only visited after midnight. They also claim that correspondents with specialised knowledge of the Middle East conflict have been replaced with contract journalists without that knowledge.

46.              – d/ RAI journalists also claim that the current news management had made compulsory the unwritten rule of “panino” (sandwich) for covering the news. This means that the story starts with a decision or an act of the government, then, very briefly, follows the protest reaction of the opposition and then, extensively, a reaction of the majority which does not address the subject but only reacts to the way the opposition has reacted. The “panino” rule has apparently to be applied to all news bulletins of RAI 1 and 2 and may soon become compulsory in RAI 3, which is considered as the last bastion of the opposition.

47.              Journalists also complain that permanent staff are underused and increasingly replaced by  contract journalists (easier to dismiss). They deplore the gradual decline and sheer disappearance of investigative journalism from their airwaves.

48.              – e/ direct interventions such as the Prime Minister’s office sending cassettes to be directly aired (a practice which seems to have stopped after strong protest) or telephone calls. In December 2001, a football programme on RAI 2 ran a satirical sketch about Mr Gasparri in the presence of the then Director of RAI who had been appointed by the left-wing government. The Minister was furious and interrupted the live broadcast with a telephone call. Asked by the Rapporteur about this incident, the Minister acknowledged that he had made a mistake, “’but so did the head of RAI”.

49.              – f/ in January 2004 Daniela Tagliafico, Vice director of the TG1, resigned because she refused to comply with the “panino” rule. She expressed her consternation in a letter addressed to the news director, Clemente Mimun, and signed by 30 colleagues. Mr Mimun, close to the ruling coalition, denied the allegations. The star RAI news presenter and reporter Lilli Gruber said she was verbally rebuked for having referred to "clashes" within the government coalition when presenting the news. She then received a written reprimand for using the adjective "contentious" when referring to the Gasparri law as voted in parliament. A few days later Mrs Gruber left RAI, writing in her resignation letter: “Never, before now, has there been such a temptation in RAI - especially in its main news broadcast - to mould all information in the shape of the parliamentary majority and the government"[13]. Mrs Gruber will now run in the European elections as a candidate of the “lista Prodi” coalition.

50.              Journalists say that political pressure has always existed and has been taken as a normal feature of public service broadcasting, both by the left and the right, but before it has been in a more subtle form than currently.  

The reform of the broadcasting sector (law n. 112/2004, “Gasparri Law”)

51.              The law lays the ground for the transition to digital switch-over in 2007. Proponents of the law hail it as a way of ending the RAI-Mediaset duopoly: the multiplication of TV channels by 5, enabled by digitalisation, should stimulate pluralism in the broadcasting sector.

52.              Digital broadcasting is so far totally in the hands of Rupert Murdoch. Since July 2003 Rupert Murdoch via News Corporation has started to transmit the 24 hours pay TV channel Sky Italia.

53.              The law also allows cross-ownership between TV, press and other media as from 2009. Although cross-ownership as a principle is generally accepted, critics fear that in the present situation, where the greater part of advertising revenues goes to RAI and Mediaset, it would be much easier for them (Mediaset in the first place) to buy newspapers than vice versa.

54.              One of the most controversial aspects of the law, however, is the abolition of existing antitrust rules for separate communication sectors; instead, market players are allowed to own up to 20% of the so-called Integrated System of Communications or SIC. When asked about the content of this definition, a parliamentarian said: ”How do you define the sea?” SIC covers: newspapers and magazines; yearbooks and electronic publications, including those available via the Internet; radio and television; cinema; street advertising; initiatives publicising products and services; sponsorships. Following the Presidential veto, certain elements were taken out of SIC, but its overall limit is still considered as very high.

55.              The President of the Italian Competition Authority Prof. Guseppe Tesauro is adamant that SIC has no relevance from the point of view of European Union competition law, which deals instead with the well-defined notion of “relevant market”. It is impossible to define SIC as a relevant market since it is a basket comprising a huge number of separate markets (for the telecommunications sector alone the European Commission has defined 18). He fears that it only creates confusion. The Authority therefore intends to ignore it. It would still be able to intervene if there is a cartel, merger or abuse of dominant position in separate relevant markets. But with the sheer dimension of SIC, it would be almost impossible to reach a dominant position in it.

56.              One could argue that SIC gives the possibility for unlimited growth of any player in the market. It is clear, however, that the current dominant players would be in the strongest position. The Chairman of the parliamentary committee for the general guidance and monitoring of radio and TV services also believes that the duopoly would persist and competition would not be boosted.

57.              Other controversial aspects of the law include the provision which separates telepromotions from the overall time allowed for advertising for the commercial media, while keeping it within the limit for RAI.

58.              The change in the composition and appointment of its Council of Administration is another matter of concern. The law sets up a nine-member board: Mr Gasparri says this is to increase pluralism and to shift the power from government to parliament. For a transitional period, seven of the members would be appointed by the Parliamentary Committee for the general guidance and monitoring of radio and TV services on a proportional basis and two by the Ministry of the Economy, which is RAI’s major shareholder. After the sale of 10% of RAI’s capital, the Council would be elected by the assembly of shareholders. The President will have to be approved by the parliamentary Committee for the general guidance and monitoring of radio and TV services with a two thirds majority. USIGRAI believe that the new appointment system would formalise the influence of the government of the day on the public broadcaster.

59.              Furthermore, the Gasparri law foresees the gradual privatisation of RAI, but no one will be able to own more than 1% of the shares. According to most commentators, this would make the privatisation totally unattractive for future investors and would effectively leave the Minister of Economy in control.

60.              For Mrs Annunziata, the most dangerous implication of this legislation would be economic, as SIC would allow Mediaset to expand further but leave RAI with the same resources and gradually marginalise it. She agrees, though, that RAI cannot continue to function in the same way and that it needs to rationalise its structure and modernise. The solution, for her, would be for both RAI and Mediaset to give up one of their respective three channels. But such a solution would be opposed both by Mr Berlusconi and by the left, which, she thinks, is afraid of privatisation.

61.              After the law had been returned to parliament by the President of the Republic, the lower house, the Chamber of Deputies, adopted it smoothly and in record time on 24 March 2004 and was approved by the Senate on 29 April 2004. The opposition has strongly criticised what it sees as only superficial corrections to the paragraphs singled out in the President’s speech, rather than an overall reassessment of the law.

Conflict of interest

62.              The issue of conflict of interest between Mr Berlusconi’s holding office and his private economic and media interests first arose after his election in 1994. The quick fall of his government prevented it from taking appropriate legislative measures. Successive left-wing governments in the following years failed to adopt a law, although several legislative proposals had been made and the probability of Mr Berlusconi winning the elections was always present. According to observers, private deals between ruling and opposition parties, in which certain potential benefits outweighed others, are mostly to blame for this situation. When stepping in as Prime Minister in 2001, Mr Berlusconi committed himself to solving the problem of a conflict of interest within the first 100 days of his premiership. Three years later, a law has not yet been adopted– it is still going backwards and forwards between the two houses of parliament. The left has submitted alternative proposals.

63.              Some elements of proposed reforms included: divestment (an obligation on Government ministers to divest of economic interests on the German model) or a US-inspired “blind trust”. None of these has been retained in the draft (bill N░ 1707) which was presented by Ministers Frattini, La Loggia and Berlusconi himself and is currently being examined by parliament.

64.              The main objections of the opposition to the bill are: 1/ that it only declares incompatibility between the management of a company and public office, not between ownership and public office. With the exception of his Milan football club, all the other business enterprises of Mr Berlusconi are officially run by family members and associates; 2/ in the case of a conflict of interest, no sanctions are envisaged for owners, only for the company managers; 3/ the bill does not contain “preventive” measures for solving a potential conflict of interest; instead, the Competition Authorithy and Agcom have to investigate abuses on a case by case basis when a government act is considered to be in violation of the law. This would mean examining a huge number of acts.

65.              Agcom concedes that additional human resources would have to be employed when the agency is assigned with this task.

66.              The ruling majority replies that their philosophy is to focus on management, rather than ownership. No compulsory selling of assets can be envisaged as this would be anti-constitutional. Controversies could be brought to Parliament, which means that there would be political sanctions

Conclusions and recommendations

67.              Mr Berlusconi’s dominant position on the commercial TV market could easily lead to the suspicion that his official acts are aimed at furthering the interests of his media empire and destabilising his main competitor, RAI. It is difficult to prove such allegations in objective terms. The authorities dealing with competition in the media sector have clearly identified the existence of a dominant position but have not identified any “abuse of dominant position” in market terms, which would be punishable under competition law.

68.                As far as possible political abuse in content terms is concerned, it is also difficult for an outside observer to establish in an empirical way whether political pressure (which undoubtedly exists) is stronger than that exerted by previous governments or whether it simply mirrors the new “the winner takes all” political system.  As stated by a previous Assembly study, in the case of the political and editorial position of both RAI and RTI, many studies of programme content have been made, but there are no objective measures, and Italy does not have a tradition of detailed and successful regulation for impartiality. Both RAI and Mediaset (RTI) have however been found by AGCOM in violation of the obligation of pluralism, objectivity and impartiality of information, as stipulated by Law 223/1990, during two programmes[14].

69.              However, there is one thing that qualitatively distinguishes the media under Mr Berlusconi from anything else and it is the dominance (be it potential) of over 90% of the TV market. The outside perception of this conflict of interest is extremely damaging and undermines the democratic credibility of the present government.

70.              The government seems to realise the damaging effect of this perception and apparently deploys efforts to dissipate outside suspicion by talking to embassies, foreign press and foreign leaders.

71.              The delegation learnt however that major foreign media based in Rome often receive telephone calls from government representatives who criticise them for their work.

72.              If the political class in Italy wants to demonstrate clearly a wish to break its flawed relationship with the media, and if Mr Berlusconi wants the world to believe that his government’s acts are to everybody’s, and not only his own personal, benefit, the newly adopted legislation should much more convincingly promote pluralism and deal with conflict of interest.

73.              A few facts that relate to simple logic and cannot be challenged on ideological grounds should be stated. The opening up of the market and the multiplication of channels enabled by digitalisation (Gasparri law) does not necessarily mean greater variety of freely accessible quality content. Plurality of markets does not equal plurality of content. The existing experience of digital television across the globe clearly demonstrates this. In the Italian case, special measures might be necessary in addition to the general measures promoting pluralism, in order to break the RAI/Mediaset duopoly and allow other (strong) actors to emerge.

74.              The definition of SIC is an area of particular concern, as it seems that market actors could have a total monopoly in a given sector without this being sanctioned within SIC.

75.              It is also difficult to accept the argument that owners do not interfere with the general orientation of their media and that only the managers should be held responsible in the case of a conflict of interest. Mr Berlusconi’s supporters insist that he does not interfere with media matters and even acknowledge that overzealous supporters in the media, such as Mr Fede, are not really helping him. Whatever Mr Berlusconi’s personal style of managing his assets, it does not exempt him from his public responsibility as a Prime Minister to ensure that the legislation deals with all possible aspects of conflict of interest.

76.              Although nobody denies that the present situation is an “anomaly”, the Rapporteur experienced several attempts to minimise its importance on the grounds that it only poses a potential problem. However, a democracy is judged not only by its day-to-day operations, but by the principles the country upholds to its own citizens and internationally. Stemming from Article 10 of the European Convention on Human Rights and the case law of the European Court of Human Rights, States are under a duty to protect and, when necessary, to take positive measures to safeguard and promote media pluralism   

77.              Another area of concern for the Council of Europe is that the organisation finds it difficult to promote impartial and politically independent public service broadcasting in its new member states, as the standard excuse it meets is “look at Italy”. Italy has a particular responsibility in this respect.

78.              However, the Rapporteur duly takes into account the fact that even those who suffer the most from the politisation of the media – the RAI journalists and its Chairperson - refuse to be considered as victims. Journalists are certainly compromising their positions, they say, but Italy is not a dictatorship and is not a country where there is no freedom of expression. “What we need from international observers is not an axe, but putting Italy in a framework of European legal and deontological standards”, insists Mrs Annunziata.

79.              Therefore, several recommendations should be addressed to the Italian authorities. First and foremost, they should deal urgently and convincingly with the conflict of interest, namely by ensuring that company owners also assume responsibility. It should ensure that legislation and other regulatory measures will put an end to the long-standing practice of political interference in the media, taking into account in particular the Committee of Ministers Declaration on freedom of political debate in media, adopted on 12 February 2004. Special measures should bring the functioning of RAI in line with Assembly Recommendation 1641 (2004) on public service broadcasting; with the declaration of the 4th European Ministerial Conference on Mass Media Policy in Prague and with Committee of Ministers Recommendations No. R (96) 10 on the guarantee of the independence of public service broadcasting and Rec (2003) 9 on measures to promote the democratic and social contribution of digital broadcasting.

80.              Italy could also follow the positive precedent set by the authorities of Luxembourg which submitted their media legislation to the Venice Commission for expertise and do the same with the Gasparri Law and the Frattini Bill. It could also give a positive international example by proposing and supporting initiatives within the Council of Europe and the European Union promoting greater media pluralism at European level.

List of persons met in the preparation of the report

Parliament
The Italian parliamentary delegation to the Parliamentary Assembly of the Council of Europe
The Bureau of Standing Committee I (Constitutional Affairs) of the Chamber of Deputies
Mr Ferdinando ADORNATO, Chairman of Standing Committee VII (Culture, Science and Education) of the Chamber of Deputies
Mr Paolo ROMANI, Chairman of Standing Committee IX (Transport, Post Office and Telecommunications) of the Chamber of Deputies
The Bureau of Standing Committee N░ 1 (Constitutional Affairs) of the Senate
The Bureau of Standing Committee N░8 of the Senate (Public Works and Communications)
The Bureau of the parliamentary Committee for the General Guidance and Monitoring of Radio and TV Services (Commissione parlamentare per l'indirizzo generale e la vigilanza dei servizi radiotelevisivi)

Government
Mr Maurizio GASPARRI, Minister of Communications
Mr Paolo BONAIUTI, Undersecretary of State at the Presidency of the Council of Ministers responsible for the information and the press

Specialised agencies
Prof. Giuseppe TESAURO, President of the Italian Competition Authority (AutoritÓ Garante della Concorrenza et del Mercato)
Representatives of the Italian Communication Authority (AutoritÓ per le garanzie nelle comunicazioni)

Media and media representatives
Mrs Lucia ANNUNZIATA, President of RAI
Mr Roberto NATALE, President of the Trade Union of Journalists of (USIG RAI),

Mr Paolo Serventi LONGHI, Secretary General of the Union of Journalists (Federazione Nazionale della Stampa Italiana - Sindacato unitario dei giornalisti italiani)
Mr Lorenzo Del BOCA, Chairman of the Order of Journalists (Ordine Nazionale Dei Giornalisti)
Mr Sebastiano SORTINO, Director General of the Italian Newspaper Publishers Association (Federazione Italiana Editori Giornali (FIEG)
Mr Francesco Saverio VETERE, Secretary General of the Union of Periodic Press in Italy (Unione Stampa Periodica Italiana (USPI)
Prof. Giovanni SARTORI, constitutionalist and editorialist in Corriere della Serra

Representatives of the foreign press


Reporting committee: Committee on Culture, Science and Education

Reference to committee: Doc. 9947, Reference No 2882 of 25.11.2003

Draft resolution and recommendation adopted by the committee on 27 May 2004 with one vote against and one abstention

Members of the Committee: MM. de Puig (Chairperson), Baronne Hooper MM. Prisacaru, Smorawinski (Vice-Chairpersons), Apostoli, Banks, Barbieri, Mrs Bemelmans-Videc (Alternate: Dees), Berceanu, Mrs Bilic, Bojovic, Braga, Buzatu (Alternate: Ionescu), Mrs Castro, MM. Colombier (Alternate: Kucheida), Cubreacov, Dalgaard, Mme Damanaki, Mr Debono Grech, Mrs Delvaux-Stehres, Mr Devinski, Mrs Dromberg, Mrs Eymer, Mrs Fernßndez-Capel, MM. Gadzinowski, Goutry, Grachev (Alternate: Chernyshenko), Gross, GŘndŘz I, GŘndŘz S, Gunnarsson, Mrs Hadziahmetovic, MM. Hegyi, Henry, Howlin (Alternate: Mooney), Huseynov R, Iannuzzi (remplašant: Gaburro), Jakic, Jarab, Mr Kocharyan, MM. Legendre Lengagne, Letzgus, Libicki, Livaneli, Mrs Lucyga, MM. Malgieri, Marxer, McNamara, Mrs Melandri, MM. Melnikov 5Alternate/ Fomenko), Mestan, Mezihorak, Mrs Milotinova, Mrs Morganti, Mrs Muttonen, MM. NazarÚ Pereira (Alternate: Medeiros Ferreira), O’Hara, Mrs Ohlsson, Mrs Papadimitriou, Mrs Pericleous Papadopoulos, MM. Rakhansky, Randegger, Mrs Reps, MM. Ribera Ambatlle, Rockenbauer, Mrs Rugate, Mr Rybak, Mrs Samoilovska-Cvetanova, MM. Schneider, Shybko, Šileikis, Mrs Skarb°vik, MM. Skoch (Alternate: Korobeynikov), Stojadinovic, Sudarenkov, van Thijn, Vakilov, Mrs Westerlund Panke, MM. Wodarg, ZZ  (Austria), ZZ (Georgia).

N.B. The names of those present at the meeting are printed in italics

Head of secretariat: Mr Grayson

Secretaries to the committee: Mr Ary, Mrs Theophilova-Permaul


[1] Gennaro Malgieri (Italy, EDG) requested that his opposition to the text of the explanatory memorandum be recorded in accordance with Rule 49.4 of the Rules of Procedure.

[2] In ź The Dark Heart of Italy ╗, Tobias Jones, London, Faber, 2003

[3] ”Italy media boss quits in protest”, BBC News, 4 May 2004, http://news.bbc.co.uk/2/hi/europe/3683843.stm

[4] Resources are defined according to a specific selection defined by art. 2 of law no, 249/97, in particular para 8, a) "those to whom television concessions are issued in a national context including for the public service, authorisations for the encrypted transmissions in a national context, or for both purposes, may raise revenues for a share not superior to 30% of the resources of the television sector in a national environment as regards encrypted and terrestrial broadcasting. The revenues with respect to the foregoing sentence are those deriving from the financing of the public service net of the fees due to the treasury, and from national advertising" Revenues and resources are not identical concepts: revenues derive from the typical activity of broadcasters, while resources are gross costs, inclusive of VAT and taxes.

[5] AutoritÓ per le Garanzie nelle Comunicazioni (AGCOM), Annual Report on activities carried out and work programme, Rome, June 30th 2003.

[6] Decision 226/03/CONS of AGCOM. A study of the distribution of economic resources in the television sector 2001 – 2003 will be officially published by AGCOM  shortly but data of the study revealed by Repubblica on 23 April 2004 confirm the findings.

[7] “Media Diversity in Europe”, Report prepared by the AP-MD, (Advisory Panel to the CDMM on media concentrations, pluralism and diversity questions), Strasbourg, December 2002.

[8] “Italy outraged by “trash TV” attack, BBC News World Edition, 20 January 2003.

[9] “Leading Italian editor forced to quit”, 30 May 2003, The Guardian.

[10] ”Italy since 1989 ; events and interpretations”, by Vittorio Bufacchi and Simon Burges, Macmillan Press, UK 1998.

[11] “Italy aims to end broadcast crisis”, BBC News World Edition, 4 March 2003, http://news.bbc.co.uk/2/hi/europe/2817001.stm

[12] ”A grave state of intimidation”, John Hooper, The Guardian, 5 February 2004.

[13] ”Top Italian TV news reader quits”, BBC News Europe, Wednesday, 28 April, 2004, http://news.bbc.co.uk/2/hi/europe/3666821.stm

[14] , AutoritÓ per le Garanzie nelle Comunicazioni, Comunicato stampa :Decisioni Dell'AutoritÓ per "SciusciÓ" , Tg4, "Excalibur" http://www.agcom.it/comunicati/cs_160503.htm