Select Committee on European Union Third Report

CHAPTER 9: The Conclusions and recommendations of the Committee

The scope of the proposal

184.  We recognise that changes have taken place in the sector, and are continuing to take place, and we accept, as do all those that gave evidence, that reform of the regime is needed. The witnesses also generally supported the view that now is a good time to be reassessing the existing regulation. (Para 53)

185.  We share the concern of witnesses about the proliferation of multiple and overlapping regulatory schemes. We call upon the Commission to work to make the regulatory boundaries as clear as possible for business and to enhance legal certainty. (Para 58)

186.  We agree that the original scope of the proposal was too broad and too ill-defined to operate without risk of great harm to new media businesses. We welcome the reduction in scope in the revised proposal. (Para 69)

187.  We welcome the apparent intention to exclude entirely electronic versions of newspapers and magazines but believe that in a rapidly changing communications world, the above distinction may well prove difficult to make in practice. (Para 75)

188.  The implementation and enforcement of this Directive, particularly when many of the services covered are 'a moving target', may be fraught with difficulties in the absence of sufficient legal certainty over its exact scope as the range of new media services continues to develop and expand. (Para 76)

189.  It would seem more sensible to seek to liberalise the provisions on advertising for established broadcasters, as discussed below, than to seek to extend similar provisions to the new media services. (Para 80)

190.  In our view, it is neither the role of regulation nor the role of any regulator to protect those with established market positions from threats by new market entrants operating under different business models. (Para 81)

191.  We are concerned that the identification of some of media services as "television-like", may lead some to conclude that eventually "like-services" should be regulated in a "like-manner", i.e. a perfectly "level playing field". (Para 82)

192.  If these services are to be included at all we agree that they must be regulated differently, but the wording and definitions in the latest versions of the text may encourage the idea that they can and should be regulated in the same way as television. We would consider such a move now or in the future to be a grave error. (Para 83)

193.  Given the practical difficulties in defining, regulating and enforcing a Directive based on "television-like" services, we believe that any further incursion into the internet and other new media services will be fraught with even greater difficulties and is unnecessary in order to secure a single internal market. (Para 85)

The Country of Origin principle

194.  We share the considerable concern of the majority of our witnesses over the apparent dilution of the Country of Origin principle. We understand that the opposition to the principle has gained momentum in many quarters of the European Union, but view this as an obstacle to the consolidation of the internal market. (Para 108)

195.  We hope that the proposed monitoring system will work effectively to prevent Member States from obstructing audiovisual media service providers for any grounds other than those strict public interest grounds set out. (Para 109)

Quantitative rules on advertising

196.  We are unconvinced by the case made for any of the proposed quantitative rules on advertising. We believe that in an increasingly competitive environment, consumers will be able to influence for themselves the volume of advertising which they find acceptable. (Para 125)

197.  We are concerned about the likely implications of these rules for free to air programming, particularly children's programming, of the proposed 30 minute rule. (Para 126)

Advertising content rules

198.  There was general acceptance that current qualitative advertising rules were satisfactory and did not require reform. We agree with this view. (Para 130)

199.  As there was little appetite for quotas to be imposed, we are pleased that the revised text leaves it to Member States to define where action is needed to promote European and independent works, and where such action is practical. (Para 132)

200.  We also support the 'lighter touch' on quotas for on demand services, where the imposition of quotas would have placed unreasonable burdens on operators. (Para 133)

201.  We believe that concerns over harmful and illegal content, particularly as relate to children, remain valid and paramount. (Para 135)

202.  We are persuaded that the rules on harmful and illegal content will not pose a significant threat to freedom of speech in the United Kingdom, particularly in light of the reduced scope of the Directive. (Para 141)

Product placement

203.  We fully understand that were product placement to be permitted, there would be concerns about the danger of it interfering with editorial content. (Para 156)

204.  At the moment, product placement is only a very small part of advertising revenue. The figures appear to show that television advertising is currently stable, thus product placement cannot be considered necessary to the viability of television companies. If this were to change in future, we believe that the issue of product placement must be revisited. (Para 157)

Self-regulation

205.  We strongly welcome the inclusion of co- and self-regulation in the body of the revised text, and hope that it will allow such regimes to continue to flourish in the United Kingdom and other Member States where they already operate. (Para 168)

206.  We are persuaded that self-regulation is the best means of operation in principle, especially for rapidly developing technological markets such as broadcasting. (Para 169)

Impact Assessment

207.  We accept the Commission's argument that there are practical difficulties in quantifying how many companies will be affected by this Directive, partly because the proposal is designed to regulate according to the type of service, rather than the type of provider. (Para 177)

208.  We do however believe that it is possible to obtain cost estimates in respect of specific provisions within the proposal. As an example, the quantitative rules governing the timing of advertising slots, the so-called '35- (now 30-) minute rule', has direct measurable consequences in terms of a reduction in the amount of revenue that can be expected to be obtained by broadcasters. (Para 178)

209.  Many of our witnesses, particularly those representing new media service providers, felt that the Commission's impact assessment failed to give appropriate weight to the impact of regulation on a rapidly evolving and expanding media services sector with fundamentally different business models from traditional television broadcasters. We recommend to the Commission that they discuss this difference of opinion with the new media service providers as soon as is practicable. (Para 179)

210.  It is a matter of some concern to us that no impact assessment will be carried out on the revised proposals. Currently neither the Council nor the European Parliament have either the obligation or the resources to carry out an impact assessment, nor does the Commission after its initial proposal. With the scope and regulatory burden for non-linear services very significantly altered from the original proposal, we call for a further impact assessment to be made.

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