1. the position of the government is not necessarily the same as the position of the parties that compose it;
2. the position of the government is not necessarily the same as the position of the largest party in the government;
3. the position of either the government, or the largest party therein, is not necessarily the position of the leader of either of those two groupings

We’ve seen this on electoral reform, where the government (and Vannino Chiti) have a proposal, but Prodi doesn’t want to endorse it until it’s locked-down, and the Democratici have no firm position on it.

Now we see it on reform of Rai. The government, through Paolo Gentiloni, has issued a draft of a reform of Rai, which establishes a foundation appointed by Parliament, the regions, and certain other cultural bodies, which then appoints a “proper” executive board. Prodi’s heir-apparent Walter Veltroni now argues that this is not enough:

“mi chiedo se non possiamo fare un ulteriore passo avanti: abolire il cda della Rai visto che e’ un duplicato della commissione di Vigilanza, in cui esistono le stesse componenti politiche

I wonder whether we might not take a further step, and abolish the board of Rai, given that it’s a copy of the oversight commission, where the same political groupings exist”

The intent – abolish political-broadcaster parallelism – is admirable; the response is a bit stupid. I don’t normally agree with Sandro Curzi, but he’s right to say that a single MD, without board, would hinder Rai. Given that Veltroni explicitly invokes the link, a better response would be to abolish the oversight commission, the Vigilanza. But of course, that would interfere with the dogma of “the centrality of parliament”, and undoubtedly piss off the parliamentarians Veltroni needs in his campaign to become leader of the Partito Democratico.

The headline figure cited by Gentiloni – “uno stanziamento per il triennio 2007-2009 per complessivi 300 milioni per la promozione digitale” [a subvention of 300 million for digital over the three-year period 2007-2009] – sounds good; although not all of that goes to Rai, it’s more than the £200m given to the BBC to help them switch over to digital in a much more geographically dispersed country.

What isn’t good is the way these extra sources of funding are announced. Drip-feeding PSBs extra discretionary funds prevents them from using the money to plan strategically, and makes them more subject to subtle or not-so-subtle government pressure.

This comes after an interview in the Corriere a couple of days ago, where Gentiloni gave his interpretation of the Gasparri law, according to which the Treasury nominates a member of Rai’s administrative council:

Dal mio punto di vista, avrei considerato normale che nel momento in cui cambia il titolare del Tesoro, il rappresentante nel Consiglio avesse rimesso il mandato nelle mani del nuovo ministro: probabilmente Padoa-Schioppa lo avrebbe confermato

From my point of view, I would have considered it normal if the representative in the Council had returned his commission to the Treasury; Padoa-Schioppa would probably have confirmed him in his post

This would be completely the wrong precedent to set for any new system of nominations. The new law on Rai should make clear that a change in the nominating body is not grounds for recalling its nominees.

• political appointees will now have an oversight role, not an executive one. The Foundation shall appoint the consiglio di amministrazione (managing board), which, if the name means anything, will have executive responsibility. This is a great improvement over the current system, where the consiglio di amministrazione is nominated by the Parliament, but shares executive power (and cedes executive initiative) with the Director-General.
• foundation members’ time in office will allow for strategic thinking. Foundation members will be appointed for six year terms; one-third of the membership may be replaced every two years. The six year term should allow for members to plan ahead without being shackled by a biennial appointments circus. Partial renewal should ensure that the Foundation’s collective intelligence isn’t destroyed after each term.
• division between public- and advertising-financed content will help Rai’s image. At the moment, the quality of Rai’s programming – of Italian television in general – is low. Consequently, Rai is often hostage to licence-fee strikes, as irate consumers renege on their licence fees in protest at low quality. If the (popular, sometimes entertaining) lowest-denominator crap moves to the advertising financed channel, then it should reduce the grounds for licence fee strikes. There is a risk that public service content will rapidly become a cultural ghetto – but some parts of Rai – i.e., Rai 3 – have become quite good at winning ratings with public service content.

At the same time, there are some unclear aspects:

• the appointment mechanism has yet to be decided. There are two options: the Spanish and the German. In the first model, six members are nominated by the regions, and appointed by the Parliament with a two-thirds majority; the President is nominated by the Presidents of the two Chambers, and appointed by the Parliament with a two-thirds majority. In the German model, the board is larger, and is drawn from civil society groups.
• the financing mechanism is unclear. According to the guidelines, the value of the licence fee will be set every three years by the Government on the basis of a proposal by the Foundation, which will reflect the cost of producing Rai’s public service content. It would be nice to see some mention of automatic inflation-uprating there; I don’t put it past future right-wing governments to starve Rai of funds by freezing the value of the licence fee in real and nominal terms.

If you ask me for my recommendations, then:

• appointments should not be made by civil society groups. Although it sounds desirable to free such an exquisitely political body from political appointments entirely, that’s to ignore the fact that much of Italian civil society is also exquisitely political. Who can imagine a nominee from CGIL (the leftist trade union) acting as anything other than a left-wing activist? This model – the German – failed pretty badly when exported to Hungary; I have no reason to suspect that Italian civil society is markedly more independent from parties than Hungarian civil society.
• the licence fee settlement should be made for six years, and uprated in line with inflation: if the contract between the Ministry and Rai for public service programming is to last six years, why shouldn’t the licence fee? This would aid planning, and put the issue beyond the range of any single legislature.

Significance:
Public broadcaster Rai and private corporation Mediaset – owned by former Prime Minister Silvio Berlusconi – enjoy a de facto duopoly over Italian television. Each has three of seven national terrestrial channels, and their advertising affiliates control over 90% of all television advertising. The law requires each organisation to move one channel to digital terrestrial television (where no organisation may own more than 20% of the market), and sets a limit of 45% on advertising sales. Mediaset’s advertising arm, Publitalia, currently enjoys a 62% share (source: RepubblicaRadio).

By attacking the commercial interests of Mediaset, the government opens up a political debate with Silvio Berlusconi’s party Forza Italia and his centre-right coalition, the House of Liberties. Berlusconi has attacked the law as “banditry”.

Timetable:
The design of the law approved yesterday forecasts the transfer of one Rai and one Mediaset channel within ‘fifteen months’ of the law’s passage. Passage through Parliament, however, may be difficult for the government, which enjoys an extremely narrow majority in the Senate. Whilst the government is unlikely to face significant problems within its own ranks, it may be vulnerable to procedural obstacles placed by the opposition.

Obstacles to implementation:
This is not the first time that Rai and Mediaset have been ordered to move channels to digital. A previous reform, which also set limits on publicity, was over-turned by a 1995 referendum. Berlusconi has already called for a referendum should Parliament fail to block the bill.

Beneficiaries:
Should the law pass, and should two analogue channels become vacant in spring 2008, it is unclear who would wish to take up two national channels with only four years before digital switch-over and the shut-down of the analogue network. The most immediate and significant impact of the law would be to damage commercial prospects for Mediaset and Rai. Mediaset shares have dropped 1.5% this morning; their performance over the past three months has been dismal.

• One unit running two ‘public service channels’, with less advertising, funded by an increased licence fee
• One unit running a ‘commercial’ channel, with more freedom to sell advertising space, not funded by the licence fee
• One unit running the television transmitter network

The reorganisation is justified since necessary: “The EU has imposed separate accounting (of state aid to profit-making companies) on us. After much hunting, I found this requirement in the Commission’s Communication on the Application of State Aid Rules to Public Service Broadcasting, para. 49. Of course, what Gentiloni fails to note is that this requirement has been incumbent on Rai since 2001.

Gentiloni’s scheme seems comically awkward. How will Rai – no stranger to internecine battles – be able to avoid either (a) cross-subsidisation or (b) poaching of resources between wings of the company?

The potential for conflict even now is noted in Il Giornale, which comments on the appointments rumour-mill in Rai. Paolo Ruffini, currently director of RaiTre, moves to RaiUno; Giovanni Minoli takes his place at RaiTre. Yet Giornali views Minoli as bound to cause problems at RaiTre because of his “centralising nature”, and Ruffini as bound to face problems at RaiUno, “spending 90% of his time managing the space demanded by Bruno Vespa, the autarchic pretensions of Bibi Ballandi,”, and so on.

I’ve got a lot of time for Paolo Ruffini – when I interviewed him last year he responded thoughtfully and carefully to my questions in print – and also denied a lot of the things said about him by Sabina Guzzanti.

Technorati Tags: paolo+ruffini, paolo+gentiloni, organisation, public+service+broadcasting,

Gentiloni punta alla riorganizzazione dell’assetto societario che contempli una divisione tra l’attività di servizio pubblico, l’attività commerciale e le reti [Gentiloni hints at the reorganisation of the corporation, considering a division between public service activities, commercial activities, and the network].

This division of labour may, perhaps, be appropriate. However, it is equally appropriate to remember that there are significant transaction costs in organisational restructuring, and Rai has already paid such transaction costs during two previous episodes of restructuring which were ‘inspired’ by political developments. Under Pierluigi Celli, Rai was ‘divisionalized’ in order to allow a split between the commercial channels RaiUno and RaiDue, and the public service RaiTre. That split – envisioned by the legislative proposal 1138 – never took place. Then, under Flavio Cattaneo, Rai was centralized again, as key functions – scheduling and publicity – were pulled from the individual channels.

Both these moves cost money and time. They also upset people, and led to numerous polemics about purges in Rai. Rai should ensure that any reorganisation fits Rai on its own terms; or that, if Gentiloni insists on legislating a new design, that the legislative process is carried out with due haste.

Technorati Tags: Gentiloni, Celli, Cattaneo, Rai, organisation, privatisation