Select Committee on European Union Fortieth Report


Letter from the Chairman to James Purnell MP, Minister for Creative Industries and Tourism, Department for Culture, Media and Sport

  Sub-Committee B considered this document and your Explanatory Memorandum at its meeting on 6 February 2006 and agreed to maintain the scrutiny reserve, pending receipt and examination of the Regulatory Impact Assessment which you mentioned will be forwarded to us under a Supplementary Explanatory Memorandum.

  We noted, and shared, the serious misgivings of UK industry in relation to this document. We are minded to revisit this matter more fully in the forthcoming weeks.

  In paragraph 39 of your Explanatory Memorandum you mentioned the UK-based stakeholder group. It would be helpful to have a brief summary of areas of concernthat this group has considered.

  In paragraph 48 and 49 of your Explanatory Memorandum you explained that the UK Government had serious reservations about aspects of these Proposals. Are you able to expand further on these reservations?

9 February 2006

Letter from James Purnell MP to the Chairman

  Thank you for your letter of 9 February about the European Commission's proposal toamend Council Directive 89/552/EEC, otherwise known as the "Television without Frontiers" (TVWF) Directive.

  You asked about the UK-based stakeholders group. The group met three times last year andhas met once so far this year, with another meeting imminent. Represented on it is a wide range of interests including broadcasters, satellite and cable operators, Internet Service Providers, new media providers, content producers, co and self-regulatory organisations, trade unions and civil society groups.

  The major concern for stakeholders has been the scope of the Directive. An overwhelming majority are not in favour of the scope being extended to on-line services. Many have expressed concerns that the Commission's proposals could lead to increased regulatory burdens and legal uncertainty. They also believe that the Commission's definitions do not make it clear which services the revised Directive will cover, or where exactly the proposed dividing tine between "linear" and "non-linear" services would be drawn.

  The Government shares these views. Aside from the important issue of tack of clarity in the proposed definitions, our key concern is that the concepts of "audio-visual media" and "non-linear" services in the Commission's text appear to bring in a very wide range of new media services which have little in common with broadcasting. This is a fast growing and converging area, and we should take great care before imposing controls which might discourage particular business models or encourage providers to move outside the EU.

  Harmonisation of minimum standards of the kind proposed across all the services which fallinto the scope of the current draft Directive would pose a threat both to their growth and to national traditions of free speech. We consider that the case for such harmonisation in this way at this time has not been made.

  In particular, the impact assessment prepared by the Commission offers no convincing case for harmonisation across all the services falling within the scope of the Directive. It is based upon a theoretical projection of what might happen if Member States were to take advantage of derogations available under the e-commerce Directive to impose burdensome national controls that would distort the working of the internal market, or if there were to be serious distortions (in terms of legal certainty or market advantage) as between the types of regulation that applies to different platforms.

  It concludes that there would be an overall—albeit essentially unquantified—loss of business. But there are very few figures in the assessment to back this assertion up.

  We see no sign that Member States are in fact imposing burdensome, damaging controls in these areas, although the assessment claims that no less than 23 already have controls of some sort. Our own extensive discussion with UK and pan-European businesses and trade associations has not revealed any evidence of concern that lack of harmonisation is stifling business opportunities.

  Rather, discussion has revealed severe concerns that these proposals could increase business uncertainty and regulatory risk. Without more evidence of potential harm to business, it seems to us that proceeding with these measures in their current form would run counterto the Commission's own stated aim—endorsed by Member States—of better regulation.

  If evidence of undue interference in the single market for such information society services did come forward, we believe that the question would be best resolved in the forthcoming review of the Electronic Commerce Services Directive.

  Our overall concern, therefore, is that the imposition of controls of the sort suggested onnon-linear services could itself cause just the kind of damage to growth and development inthese sectors which the Commission quite rightly seeks to avoid. They could themselves lead to market distortions and to a net outflow of jobs and development in the new media industries from the EU area.

28 February 2006

previous page contents next page

House of Lords home page Parliament home page House of Commons home page search page enquiries index

© Parliamentary copyright 2007