EC Decision

RM PLC
31 October 2003

31st October 2003



   RM welcomes European Commission Decision on BBC Digital Curriculum scheme



RM plc, the leading supplier of information and communications technology (ICT)
and educational services to the UK education market, today welcomed the Decision
of the European Commission (Commission) on the BBC Digital Curriculum scheme
(the Decision).

As expected the Commission's Decision gave the BBC the go ahead. However the
Commission has taken into account the concerns of the educational software
industry, and, as a result, has introduced a number of significant
clarifications, which RM supports:

•        The Decision states (i) that the Digital Curriculum constitutes state
aid that should have been notified to the Commission for approval before taking
effect and (ii) that this state aid is new aid because 'the Digital Curriculum
is a digression from the various markets within which the BBC is active'(1).

•        The Commission requires that any funding of the Digital Curriculum in
excess of £150m or any funding beyond 5 years must be the subject of a new state
aid notification by the UK authorities.

•        The Decision states that the distortion of competition caused by the
Digital Curriculum in England is only mitigated by the existence of eLCs(2) at
their current level, underlining the need for eLCs to continue for the entire
duration of the Digitial Curriculum. This gives greater visibility on funding.
The Decision also clarifies that eLCs are to be used exclusively on genuine
educational software.

•       The Commission will require the BBC to publish a fixed 5 year
commissioning plan for the Digital Curriculum, 15 months in advance of the
launch of the Digital Curriculum, which will indicate areas where the BBC is
excluded from producing - the plan must have 'explicit criteria for the
exclusion providing clarity for users and commercial providers of the subjects
and learning outcomes that will not be provided by the BBC.' This will give
greater certainty on opportunities for RM and other alternative suppliers within
the UK educational software market.  The Commission states that this
commissioning plan must provide the parameters within which the BBC will be
allowed to operate and that any divergence from the scope of the plan will be a
breach of the DCMS approval given in January 2003(3).

•        The Commission states that the BBC must not use the publicly funded
Digital Curriculum to cross subsidise its commercial operations in any way and
that the BBC must comply with the Transparency Directive.

RM believes that this decision brings the matter to a close, and RM looks
forward to working constructively with the BBC and others within this framework
for the benefit of UK education.

The full Decision will be available in the next few days and can be found by
clicking on the following link:

http://europa.eu.int/comm/competition/state_aid/oj/index.html

                                    - Ends -



For further information, please contact:
Tim Pearson/Mike Greig RM plc                                 08709 200200
Andrew Fenwick/Fiona Laffan, Brunswick                        020 7404 5959





Notes to Editors:

1.      In the Judicial review brought by a group of commercial providers in
2002, one of the main grounds for the action was that the funding of the Digital
Curriculum constituted state aid.

2.      eLCs are Electronic Learning Credits  - funds distributed by the DfES to
schools. According to the Commission, eLCs are to be used exclusively on proper
educational software, 'strictly for material which is certified as eligible for
the Curriculum Online programme; the programme comprises of products that have
been designed and produced to deliver the Curriculum as taught in England.'

3.      On 9th January 2003, the DCMS gave approval to the BBC Digital
Curriculum subject to 18 conditions.




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