Memorandum by Orange UK
23 OCTOBER 2006
1. INTRODUCTION
1.1 Orange welcomes the Committee's inquiry
into the EC's proposals to amend the existing Television Without
Frontiers Directive (TvWF). The proposals are a major concern
to Orange and we are therefore happy to provide further assistance
to the Committee, including oral evidence.
1.2 New media services are bringing significant
benefits to the UK economy. However, much of the innovation and
investment in these services has yet to come to fruition and the
market remains nascent. As with any new technology, there are
also potential public policy challenges to be addressed. Orange
recognises this and we support regulation where it is appropriate,
proportionate and necessary. However, we seek flexibility so as
not to deter new and creative services, such as Video-on-Demand
(VOD) services and mobile TV. We advocate a self-regulatory approach
to achieve flexibility whilst affording suitable consumer protection.
This approach is supported by the UK Government and, to date,
has been successful.
1.3 The UK is a leader in developing new
media and online services—in both fixed and mobile spaces.
To this extent, Orange believes the current proposals to amend
the TvWF Directive could place the UK at a significant competitive
disadvantage in a global marketplace. We believe the EC's proposals
could severely hinder the delivery and development of innovative
digital audio visual content services in the UK before they have
even got off the ground.
1.4 We also believe current proposals could
have a negative impact not only on new and nascent digital content
services but also to existing and well established business models
as many of the activities that are currently regulated by the
E-commerce Directive may also be captured by the proposals.
2. ORANGE AND
THE UK MARKET
2.1 Orange is no longer just a provider
of mobile communications in the UK. We are now able to offer consumers
and business a wide range of communications services in the home,
in the office and when on the move: broadband, fixed telephony
(including voice calls over the Internet), interactive "on
demand" TV and the mobile communications services we already
provide to 15 million people across the UK (these four services
banded together are often known as "quad play").
2.2 Bringing all of these services together
under one banner—Orange—is as a result of our integration
with our sister company, Wanadoo, one of the UK's largest Internet
Service Providers (ISPs). It is part of our parent company France
Telecom's global strategy to offer a unified customer experience
and is an effort to adapt to consumer needs and an increasingly
competitive environment, particularly in the UK.
2.3 Orange is therefore able to offer consumers
a "one stop shop" for all their communications needs.
By converging our operations and services, we can combine convenience
with simplicity. For example, a single point of contact for assistance,
one bill for all services and an integrated fixed/mobile answer
phone service.
2.4 We believe there is huge opportunity
to capitalise on the power of the Internet—whether mobile,
in the office or at home—as a delivery mechanism for services,
many of which do not even exist yet. And, as the distinction between
the various media platforms continues to blur, so the consumer
is showing an appetite to want to access his or her content wherever,
however and whenever. As a result, "on demand" content
is becoming increasingly popular with consumers.
2.5 As such, music and video entertainment
continue to be popular in both the fixed and mobile spaces. And
so called "non-linear" services (whereby consumers "pull"
content) are growing to meet consumer demand. Orange has a streamed
mobile television service for its customers offering a choice
of over 18 channels of news, entertainment, sport, weather and
comedy. Each channel selected by the customer is streamed over
Orange's high speed Third Generation (3G) mobile network. Channels
include Channel Four, ITN, CNN, Smash Hits, Bloomberg, Kerrang
and Bravo. We are looking to add further channels to this service,
but television via a mobile handset (whether using 3G or other
developing technology) is just one of the ways people can watch
television and audio visual content today.
2.6 Orange will shortly launch a home broadband
television service offering customers a wide range of exciting
programming and content to complement existing digital terrestrial
television services. A set-top box connected to the Orange wireless
broadband network will offer interactive and on demand services
allowing the customer to watch the content he or she wishes at
a time and convenience to them.
2.7 We are also witnessing a rise in popularity
of interactive user-generated content. Social networking websites
such as YouTube, Bebo and MySpace allow users to publish their
own content, interact with others and watch what they want when
they want to. User-generated content is also increasingly popular
on mobile handsets and is set to grow. This will significantly
impact the way in which content is created and consumed.
3. AUDIOVISUAL
MEDIA SERVICES
(AMS) PROPOSAL (AMENDMENT
TO THE
TVWF DIRECTIVE)
3.1 The proposed AMS Directive seeks to
update existing broadcasting regulation under TwWF to cover all
audiovisual media services. In particular, it seeks to extend
regulation into "non-linear" services. It does not clearly
define the boundary between "linear" services (ie scheduled
broadcasting via traditional TV, Internet or mobile which "pushes"
content to viewers) and "non-linear" services (ie "pull"
or on-demand content). It therefore makes it very difficult to
assess the impact on current and future services. Orange believes
that if "non-linear" services are to be included in
the new Directive, a clear boundary definition between "linear"
and "non-linear" will be pivotal.
3.2 However, we believe including "non-linear"
services in the new Directive would place additional burdens on
electronic communications services for fixed and mobile operators.
For example, obtaining an audiovisual licence from national authorities
as well as compliance with detailed rules that are not technologically
neutral and are therefore not possible or enforceable in an Internet
environment (such as contextual rules, watersheds etc). Orange
believes this is disproportionate as audio visual media services
that are akin to TV offerings are currently only subsidiary and
complementary services. These only account for a small proportion
of electronic communications services provided by Orange (fixed
and mobile).
3.3 Furthermore those services that are
not akin to TV services but are within the scope of the Directive
that are either provided by Orange (or that are accessible to
users via the Internet provided by Orange) are already regulated
by the E-commerce Directive as well as other legislation in the
UK (for example the Anti-Terrorism, Crime and Security Act 2001,
Protection of Children Act 1978, Racial and Religious Hatred Act
2006, Protection of Children Act 1999, Obscene Publications Act
1959 and 1964 , the Sexual Offences Act 2003).
3.4 The E-commerce Directive itself provides
for the "country of origin" principle. The AMS Directive
would therefore lead to double-regulation and a lack of legal
certainty for electronic services providers. This approach is
both disproportionate and unnecessary.
3.5 It is likely that there will be higher
entry costs in the EU for new distribution platforms and this
will place UK content providers at a disadvantage. This means
that services provided from outside of the EU (but still accessible
within the EU) will have a lower or non-existent regulatory burden
and therefore this will place EU and UK business at a severe competitive
disadvantage (eg US content may prevail in the UK and unnecessarily
harm a very successful UK content industry).
3.6 Orange believes that lower barriers
to entry to the audiovisual market will promote the emergence
of new business models creating a competitive market and high
demand from European content, in particular with the surge in
user-generated content.
3.7 Orange understands the need to protect
consumers, and in particular children. Over and above those requirements
of national legislation, Orange—in conjunction with other
industry members, charities/consumer groups and with the Government—have
worked on a large number of voluntary initiatives to protect children.
Orange participated in the Home Office taskforce for the protection
of children that led to the creation of safe search guidelines
and safe online guidelines. Orange is also a founding member of
the Internet Watch Foundation (IWF). Working with all UK mobile
network operators, Orange has implemented a self-regulatory Code
of Practice to help protect children from inappropriate content
and block illegal content on mobile handsets. Orange has in place
an age verification scheme to ensure users of 18 years and over
only can access adult material over their mobiles. We are currently
working with the Home Office to put in place guidelines for the
safe use of social networking sites.
4. RECOMMENDATIONS
4.1 Orange supports the UK Government's
and Ofcom's position on this issue. We welcome their support,
as well as the support from other Orange companies in the EU.
4.2 We make the following recommendations
to the Committee:
— The new AMS Directive should only
apply to services that look and feel like TV services and that
are aimed at replacing a TV service exclusively. They should not
apply to non-linear services, such as on-demand services, which
place a disproportionate regulatory burden on fixed and mobile
providers.
— The E-commerce Directive (as well
as other UK legislation) already regulates non-linear services.
The AMS Directive would therefore lead to double-regulation of
these developing services. To this extent, we believe it is inappropriate
to re-cast the regulatory framework for these services.
— If non-linear services are to be
included in the new Directive, a clear boundary between these
and linear services will be essential to assess the impact on
current and future services.
— In the UK, self-regulation has played
a significant role in ensuring a suitable balance between consumer
protection and the need for flexibility to develop innovative
new services. Fixed and mobile operators have an excellent track
record for developing self-regulatory initiatives, particularly
those aimed at protecting children.
— Introducing new regulatory measures
to existing and developing Internet and mobile services will risk
placing the UK (and EU) at a significant disadvantage to global
competitors in the USA and the Far East. In particular, UK business
and content providers will face higher barriers to entry.
October 2006
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