Explanatory memorandum on European Community
Legislation
"Proposal for a Directive of the European
Parliament and of the Council amending Council Directive 89/552/EEC
on the coordination of certain provisions laid down by law, regulation
or administrative action in Member States concerning the pursuit
of television broadcasting activities".
"Annex to the Proposal for a Directive of
the European Parliament and of the Council amending Council Directive
89/552/EEC on the coordination of certain provisions laid down
by law, regulation or administrative action in Member States concerning
the pursuit of television broadcasting activities. Impact Assessment,
Draft Audiovisual Media Services Directive".
"Statistical Annex"
Submitted by the Department for Culture, Media
and Sport
25 OCTOBER 2006
19 January 2005
SUBJECT MATTER
This document is the Commission's proposal for
the revision of the "Television Without Frontiers" Directive
(TVWF).
2. TVWF Dates from 1989 (Directive 89/552/EEC).
It was revised in 1997 by Directive 97/36/EC.
Scrutiny history
3. The 1997 Directive was the subject of
Commission proposals 7942/95 (COM(95)86) and 7233/96 (COM(96)200).
These documents were the subject of Government explanatory memoranda
dated 13 July 1995 and 8 January 1997.
4. In the House of Lords, the European Union
Committee did not report on the proposal and cleared it from sub-committee
B on 4 February 1997. In the House of Commons the European Scrutiny
Committee reported on the first EM in their 25th and 26th report
for 1994-95 and recommended a debate in European Standing Committee.
5. That debate took place on 31 October
1995. The second EM was reported on in the Committee's 9th report
for 1996-97.
The Television Without Frontiers Directive
6. The TVWF Directive has two purposes.
As explained in the Commission's impact assessment, these are
to ensure:
— the protection of fundamental public
interest objectives in terms of the content of TV programming;
and
— the free movement of television broadcasting
services within the EU.
7. To achieve these aims, TVWF sets minimum
standards for the rules which Member States impose on the television
services which they authorise. These rules concern public access
to coverage of major events, proportions of European and independently-produced
content, film rights, advertising, sponsorship and teleshopping,
the protection of minors and public order, and rights of reply.
8. At the same time, TVWF requires that
Member States do not restrict the retransmission in their territory
of television programming originating from other Member States,
so long as this meets the TVWF rules. This is known as the "Country
of Origin" principle. In this way, the Directive creates
a Single Market in the EU television broadcasting industry.
The Commission's proposal
9. The Commission's proposal takes the form
of amendments to the existing TVWF Directive. Some parts of the
Directive would remain unamended. Examples are Articles 4 and
5, the "quotas" which TVWF sets for European and independently-produced
TV programming. They would thus remain in force as they stand,
though their scope and thus their effect would be altered (they
would apply to "linear services", as described at paragraph
20 below).
10. One of the Commission's proposals is
that the Directive be renamed, to replace the words "the
pursuit of television broadcasting activities" at the end
of its long title with "the provision of audio-visual media
services (Audio-Visual Media Services Directive)".
The Commission's reasons for proposing changes—the
scope of the Directive
11. The Commission have set out their reasons
for proposing to amend the Directive at section 3 ("Problem
Definition") of their Impact Assessment (document ADD1).
They say that the Directive, since its 1997 revision, has been
"overtaken by technological and market developments and has
to some extent become outdated" (para 3.1).
12. Since 1997 a range of new technologies—including
PVR's (personal video recorders), IPTV (Internet Protocol TV)
and other Net and broadband offers, VoD (video on demand), and
mobile services has become available to deliver TV and TV-like
products. Some of these products are scheduled services on the
model of traditional broadcasting, in which it is the supplier
who decides what is broadcast and when. Others consist of what
the Commission call "non-linear" services, in which
it is the consumer who determines what, from among the available
programme options, is transmitted and when.
13. As information society technology has
developed, the different platforms are increasingly able to offer
the same very wide range of services (the phenomenon known as
"convergence"). The Commission's core concern—see
3.2 of their impact assessment—is that keeping the TVWF
Directive in its current form would "aggravate increasingly
unjustifiable differences in regulatory treatment between the
various forms of distribution of identical or similar content".
Scope of the Directive—the Commission's
proposal
14. At present, TVWF applies to "the
initial transmission by wire or over the air, including that by
satellite, in unencoded or encoded form, of television programmes
intended for reception by the public..." (89/552/EEC as amended
by 97/36/EC, Article 1a).
15. As mentioned above, the Commission propose
that TVWF should become an "Audio-visual Media Services Directive".
Its scope of application would become (any) "service as defined
by Articles 49 and 50 of the Treaty, the principal purpose of
which is the provision of moving images with or without sound,
in order to inform, entertain or educate, to the general public
by electronic communications networks within the meaning of Article
2a of Directive 2002/21/EC of the European Parliament and the
Council" (Article 1a of the proposed revised Directive).
16. The reference to Articles 49 and 50
of the Treaty confines the scope of the Directive, in general
terms, to services which are carried out on a commercial basis
(including the activities of public service broadcasters such
as the BBC). Directive 2002/21/EC, generally known as the "Framework
Directive", defines electronic communications networks—both
it and the current Commission proposal cover the Internet, all
mobile networks, and all broadcasting networks.
17. However, Directive 2000/31/EC, generally
known as the e-commerce Directive, regulates the provision of
"information society services". These are defined by
Directive 98/34/EC, as amended by Directive 98/48/EC, as services
"normally provided for remuneration, at a distance, by electonic
means and at the individual request of a recipient of services".
Hence, the proposed revisions to the TVWF Directive would mean
that the ambit of the TVWF Directive would overlap with that of
the e-commerce Directive as both would relate to services provided
over the Internet and all mobile and broadcasting networks.
Linear and non-linear
18. The effect of the Commission's definition
at proposed revised Article 1(a) would therefore be that the revised
Directive would cover all commercial media services whose principal
purpose was the provision of moving images to the general public,
and which provide these images over the Net, mobile networks,
telecoms networks, terrestrial, cable and satellite broadcasting
networks, or over any other electronic network. These the Commission
calls "audio-visual media services".
19. These audio-visual media services would
be divided into two categories, linear and non-linear. Within
the basic scope of the Directive, non-linear services are defined
(propose revised Article 1(e)) as those in which "the user
decides on the moment in time when a specific programme is transmitted
on the basis of a choice of content selected by the media service
provider".
20. Linear services are not specifically
defined, but would be broadly comparable to scheduled TV broadcasting.
Proposed revised Article 1(c) says "television broadcasting"
or "television broadcast" mean a linear audio-visual
service where a media service provider decides upon the moment
in time when a specific programme is transmitted and establishes
the programme schedule".
21. The Directive would not cover sound-only
services, and so would exclude radio (the existing TVWF Directive
equally does not cover radio).
The Commission's proposed rules for linear and
non-linear services
22. The Commission's proposition is that
all audio-visual media services, linear and non-linear, should
be subject to a "basic tier" of rules, whose details
are set out at Articles 3c to 3h of the proposed revised Directive.
23. As well as this "basic tier"
of rules for all audio-visual media services, the effect of the
Commission's proposal is that linear services, but not non-linear
ones, should be subject to requirements about the coverage of
major events, quotas of European and independently-produced programming,
advertising, and rights of reply which are similar to those which
the TVWF Directive already imposes upon television broadcasting
services (in Articles 3 and 3a, 4 and 5, 10 to 20, and 23 respectively).
24. The Commission's proposals would in
particular significantly simplify the rules in the TVWF Directive
that relate to commercial communications. Under the current TVWF
Directive (Article 18.1) there is a daily limit of 20 per cent
on the amount of time that television stations can devote to advertising.
Article 18.2 sets a similar hourly limit.
25. In the proposed revised Directive, Article
18 would set an hourly limit of 20 per cent, but there would be
no daily one. In the proposed revised Article 11, programming
such as films, childrens' programmes and news programmes may be
interrupted by advertising once every 35 minutes. This compares
with a limit of once every 45 minutes for films, and once every
20 minutes for news and children's programmes, at Articles 11.3
and 11.5 of the current Directive.
The Country of Origin (single market) principle—the
Commission's proposal
26. As explained at paragraph 8 above, the
existing TVWF Directive embodies a "Country of origin"
principle which creates a Single Market in television broadcasting
services. The amendments to the Directive which the Commission
propose would leave that intact, while extending its scope to
cover audio-visual media services (as defined at proposed revised
Article 1(a)).
27. At proposed new Articles 2.7 to 2.10,
however, the Commission create an exception in cases of "abuse
or fraudulent conduct". These proposed Articles would allow
a Member State to take proportionate measures against a media
service provider which was established in another Member State
if it directed "all or most of its activity to the territory
of the first Member State".
28. It would be for the Commission to decide
whether any measures taken in this way were compatible with Community
law. If it decided that they were not, the Member State in question
would have to refrain from taking them.
MINISTERIAL RESPONSIBILITY
29. The Secretary of State for Culture,
Media and Sport has responsibility for policy matters relating
to broadcasting and the implementation of the EU Directive "Television
Without Frontiers".
30. The Secretary of State for Trade and
Industry has responsibility for communication and content industries
likely to be affected by the proposed amendments to the Television
Without Frontiers Directive, and for the e-commerce Directive
and other Directives governing electronic communications networks
and services whose applicability are likely to be affected.
LEGAL AND
PROCEDURAL ISSUES
31. Legal basis—the amended
Directive is proposed under Articles 47(2), 55 and 151 of the
Treaty. Co-decision and QMV (Article 251) also apply.
32. European Parliament procedure—Assent.
33. Voting procedure—The Directive
can be approved by Qualified Majority Voting (QMV).
34. Impact on UK law—To be
incorporated within three years of adoption.
35. Application to Gibraltar—Yes.
APPLICATION TO
THE EUROPEAN
ECONOMIC AREA
36. Yes.
SUBSIDIARITY
37. The Government is content that the issues
addressed in the Commission's proposals are suitable for Community
action, and that it falls within the Commission's competence to
propose the changes which it has. But as explained below (in paragraphs
48 and 49) the Government has important reservations about what
is being proposed.
CONSULTATION
Consultation by the Government
38. The Commission published these proposals
for the first time on 13 December 2005 and the UK Government has
not yet formally consulted about them. There has however been
a great deal of informal consultation about the matters to be
covered by the Directive in parallel with the Commission's consultations.
39. We have (jointly between the Department
for Culture, Media and Sport, the Department of Trade and Industry
and the Office of Communications—DCMS, DTI and OFCOM) set
up a UK-based stakeholder group that embraces a very wide range
of interests with specific concerns about TVWF and what the Commission
are now proposing to do with it.
40. As well as broadcasters, the group includes
internet service providers, mobile phone operators, the software
industry and civil society groups. This group met several times
during 2005 as the Commission's thinking developed, and has met
again since the publication of the proposed Directive on 13 December
last year.
41. Now that the Commission has published
its proposals, we will carry out a formal consultation exercise
on them. We will use the results of that to inform the Regulatory
Impact Assessment and Small Firms Impact Assessment.
Consultation by the European Commission
42. The European Commission began their
own consultation on the proposal in 2002, when they sought comments
from Member States and others. The results of that can be found
on their website. The UK responded to this consultation.
43. The Commission produced "issue
papers" on six key TVWF issues on 11 July 2005. These papers
were discussed at a major international broadcasting conference
specifically on TVWF which the UK Presidency of the EU organised,
jointly with the Commission, in Liverpool from 20 to 22 September.
44. The UK responded formally to the Commission's
11 July papers in November 2005.
45. Earlier in 2005, OFCOM, with support
from DCMS and DTI, had commissioned an independent assessment
of the impact of the Commission's proposals, as they were then
understood to be, from Indepen, Ovum and fathom. Their report,
published in September 2005, is available on the OFCOM website
(www.ofcom.org.uk).
46. OFCOM's consultants had carried out
their work on the assumption, which was current at the time it
was commissioned and reflected discussion in the Commission's
11 July issue papers, that the Commission would be proposing to
extend the scope of the Directive to all networked audio-visual
media services rather than just to those whose principal purpose
was their "provision . . . in order to inform, entertain
or educate, to the general public". We believe the discussions
at Liverpool played a key role in the Commission including the
"purpose" of a service in its proposals.
REGULATORY IMPACT
ASSESSMENT (RIA)
47. We will develop the Regulatory Impact
Assessment in the light of the forthcoming consultation and of
the work that has been done on behalf of OFCOM and the European
Commission. Once finalised, we will forward it as a supplementary
Explanatory Memorandum.
POLICY IMPLICATIONS
48. The UK Government has serious reservations
about important aspects of these proposals. The discussions which
we have had with industry have revealed serious concerns, especially
in the online, broadband and mobile sectors, that rules of the
kind proposed could dampen the growth of these vitally important
and rapidly developing areas.
49. Especially given that these industries
are so easily portable between jurisdictions, this could prejudice
the ability of the EU as a whole to meet its i2010 targets and
the Lisbon Agenda. There is also a concern that the distinction
between linear and non-linear services in the Commission's proposal
could rapidly become redundant given the speed and dynamism with
which the new media industries are developing and deploying new
products with which to exploit the new technologies.
50. Inasfar as the proposals affect traditional
television broadcasting, the Government welcomes the deregulation
which is proposed but feels that it could go further, especially
as it remains within member States' own margin of appreciation
to impose stricter regulation of their own broadcasters if they
wish to do so.
FINANCIAL IMPLICATIONS
51. Yes. Results of RIA awaited.
TIMETABLE
52. The amended Directive will be subject
to the co-decision process involving the Council of Ministers
and the European Parliament. It may take 18 months to two years
to reach agreement, resulting in a new Directive in 2007. The
UK and other Member States would then have up to three years to
bring it into effect.
James Purnell
Minister for Creative Industries and Tourism
Department for Culture, Media and Sport
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