Examination of Witnesses (Questions 200-219)
Mr Hamish MacLeod and Mr Dario Betti
30 OCTOBER 2006
Q200 Chairman: Your members would
then be subject to regulation for some part of your content that
you offered, which you will presumably offer, if not now, ultimately,
the ability to pull down TV content off schedule that has previously
been scheduled. Am I right?
Mr MacLeod: Yes.
Q201 Chairman: I would not say your
members are happy with it, but they understand and would live
with the situation where you were regulated for some of the things
you did but not regulated for other things that you provided.
Is that correct?
Mr MacLeod: Correct.
Q202 Lord Roper: Would you be regulated
or would the people who actually produced the material which is
then pulled down over your broadband?
Mr MacLeod: Again, that is a very good question.
Principally, it will be the content producers, the audiovisual
media service providers, that will be regulated, but in as much
as we are not only platform operators but also audiovisual media
service providers, we would also be regulated, yes.
Q203 Lord Swinfen: On that surmise,
you would be responsible for content that emanated from outside
the European Union that you then distributed?
Mr MacLeod: I do not think so, no. If you were
just the mere conduit/platform that was giving access to that
content, no.
Q204 Lord Swinfen: But surely you
are just a platform giving access to content that is generated
within the European Union. You are in exactly the same position.
Mr MacLeod: Not always, no. There are services
that, as an operator, you provide as a content provider.
Q205 Baroness Eccles of Moulton:
Could you give us an example?
Mr Betti: We do have a TV service in Germany
as part of T-Mobile International. We have a TV platform where
the content is sourced from the broadcasters for public and private
broadcasts in Germany and we then deliver that straight to our
users. That also includes some channels that we commission to
independent producers to package for us. So for certain channels
we simply simulcast, we present what is available or a large amount
of what is available on traditional TV, and on the other side
we do commission directly certain programmes. But all of those
are done within the country itself.
Q206 Baroness Eccles of Moulton:
Like a soap opera?
Mr Betti: That is one. We do have a soap opera
channel and we also have a comedy channel.
Q207 Chairman: Can I just press you
on this issue of practical working definition? When the Minister
was before us, he went further than your interpretation of "TV-like".
I think I am right in saying that he suggested that if somebody
offered a catalogue of programmes or films, which may never have
appeared on television before, these would be regarded as TV-like
services. So if someone offered a catalogue of films, for example,
I think I am right in saying that would come under TV-like services.
Mr MacLeod: Again, we cannot answer any of these
questions with bounding enthusiasm but yes, I think the position
the Government is developing seems to be within the bounds of
what is possible and sensible. What they are seeking to exclude
are the amateur-type products that are uploaded on to the internet
and are somehow commercialised, which within the current definition
would fall within the scope, but there seems to be quite a lot
of support for actually recognising that we really do not want
to be regulating every bit of amateur, user-generated content.
So let us just concentrate on professionally produced.
Q208 Chairman: I want to just finish
this line, because when we come to read your evidence and come
to write our report, it is extremely important to get clear what
the industry understands by what the Government has in mind. One
of the criteria for TV-like services delivered over mobile phones
and internet was services where the user reasonably expects regulated
protection within the scope of the Directive. Do you think users
of your service reasonably expect downloaded films that are nothing
to do with the television to be subject to the Directive? It is
a test of "the user reasonably will expect" regulated
protection. Do you think that is the case?
Mr MacLeod: I must admit, that is an extremely
difficult question to answer definitively, but if it has been
professionally produced for public consumption, and the public
does at the moment have expectation that their TV content is regulated,
and anything that has the look and feel—and I agree it is
not a hard and fast definition—of professionally produced
content, we think that is what the Government means.
Q209 Chairman: I hope you re-read
the evidence that you are giving today. In your own written evidence
to us in paragraph 20 you say that "although many people
have concerns over the content available, as they do with TV,
the great majority want to take responsibility for what they and
their children access." That seems at odds with what you
have just said. I say again, do you think your users will expect
a package of TV film choices to be equated with TV-like services,
and that they should therefore be regulated in the same way as
television? We are very near, as I understand it, to potential
agreement being reached, so these are important questions for
clarity, are they not?
Mr Betti: I will probably step away from the
regulatory side, but if I look at what we have seen from the user,
what I would like to say is a minimum element of decency, for
instance, and request for laws to be met by the users. Also, as
a mobile operator, we are very much interested in protecting our
brand and our users. With the on-demand, however, we also see
that automatically the user is actually starting to make a decision
on what they want to see, and is being more active. I believe
that there is a different world in the non-linear than in the
linear world, where there is more editorial control by the channels.
Hence, so far we have seen the user reaction. I also see how partly
there is the awareness that they are making the choice on non-linear
to watch something at a certain time, and also to go in search
of something else, because the choice is so much wider. So I do
see a bit of a distinction between the necessity of regulation
of the two from looking at the consumer side.
Chairman: Can we go on to content, because
they clearly merge, service and content issues and so on.
Q210 Lord Geddes: On advertising,
on the content side, you have a number of bits of evidence on
your written evidence, and if I could just quote from paragraph
6 and paragraph 41, you begin paragraph 6 by saying "Further
measures could be taken to liberalise the rules on advertising.
All rules relating to the quantity of advertising should be relaxed...
The quantitative rules are not suitable for other platforms such
as linear content supplied over mobile platforms." That is
pretty clear: further measures could be taken. Then in paragraph
41 you say you welcome the measures being introduced to relax
the rules. So, number one, is there enough relaxation in the draft
or do you want more relaxation?
Mr MacLeod: Paragraph 41 refers to product placement
and sponsorship.
Q211 Lord Geddes: I was going to
bring that up. It does not say anything about advertising as such,
what I understand as advertising—linear advertising, dare
I say it?
Mr MacLeod: Yes. At the moment there is what
is in shorthand known as the 20 per cent rule, where you have
a maximum of 20 per cent of advertising content in any hour's
broadcasting, and that is one rule which we think could be relaxed.
There is now so much choice. Those are rules that were made up
when there were very few channels, and now there is such a huge
choice for customers to watch, and there are technical techniques
of actually skipping through the advertising, that we think the
regulators should basically have a bias against intervention.
When they can see that the market will do its stuff, then they
should step back. This is one area where they could step back
further. The second reason is that in the fullness of time the
market for linear content over mobiles will develop strongly and
we are not convinced that the rules that were invented for domestic
broadcasting read comfortably across to the mobile TV type of
situation, where people use the service in a completely different
way.
Q212 Lord Geddes: The nub of my question—and
your answer may be delightfully short to this—is: do you
consider that the proposed rules adequately address the emerging
business models for content provision over those new platforms?
Mr MacLeod: No. I think we could be given more
flexibility.
Q213 Chairman: So the draft Directive
as it stands, applied to some of the services you will offer,
it appears that—I would not use the word "happy",
but you would go along with. Some of the services you offer potentially
will be subject to some regulation regarding advertising, so rules
around advertising—the amount, the frequency and so on—you
are content with. That would apply to some of your services but
not to others.
Mr MacLeod: Where it relates to advertising
on the linear services which are transmitted over mobile, no,
I think we could do with more relaxation of the rules around quantity.
Q214 Chairman: But would TV-like
services, e.g. films, be regarded as coming under those quantitative
advertising?
Mr MacLeod: That is not my understanding, no.
Q215 Chairman: You are positive about
that?
Mr MacLeod: The non-linear. The 20 per cent
rule I do not believe refers to the non-linear.
Lord Roper: The 20 per cent? Are we talking
here about the amount that is European in content?
Lord Geddes: No, it is timing.
Lord Roper: No more than 12 minutes.
Q216 Chairman: I have just checked
with my adviser. He thinks, as I do, that when the Government
is talking about "TV-like" services on internet, for
example, or delivered through mobile phones, including, as I say,
for example, a catalogue of films, not just television services
that you can access by chance or design, that they would not be
called non-linear. That was widening the definition of linear.
Mr MacLeod: Again, that is not my understanding.
The Government's compromise move is to keep linear as it is, but
if you must bring non-linear into scope, let us try and tightly
define which non-linear services will be subject to regulation.
Q217 Chairman: But they would not
be subject to the current regulation, advertising and so on, at
all.
Mr MacLeod: The quantitative aspects of it,
is my understanding, no.
Q218 Chairman: Under the draft Directive
as it currently stands, what would be regulated for in this narrowly
defined non-linear service?
Mr MacLeod: There are things like the protection
of minors and human dignity.
Q219 Chairman: What else?
Mr MacLeod: There is the quota stuff.
Chairman: We will come to that. I did
not want to discuss them. I just wanted to understand from you
the answer.
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