Public Service broadcasters face stiff competition as a result of an increase in the number of broadcasters in the digital era. Further falls in their advertising revenue are the likely result. This will make it harder for them to finance their Public Service obligations. The EC concerned at the impact of US imports has promulgated the Television Without Frontiers Directive. This requires member states to impose cultural diversity obligations on broadcasters with their jurisdiction. The legality of these measures has been questioned by the US. Their effectiveness is thrown into doubt by the convergence phenomenon. The article examines these challenges. It also looks at the programming requirements imposed on public service broadcasters by the Communications Act 2003. |em|At a broadcaster level, the authors argue, the Directive provides a further illustration of the difficulty of achieving a workable balance between free trade and other social policy goals (such as cultural diversity).