Examination of Witnesses (Questions 340-351)
Mr Gregory Paulger and Mr Jean-Eric de Cockborne
6 NOVEMBER 2006
Q340 Chairman: This does apply to
non-linear services as well?
Mr Paulger: No, not yet. Some people want it
to but it does not.
Q341 Baroness Eccles of Moulton: Not
even to the TV look-alike?
Mr Paulger: No. That has not been requested
by the 13 and so we are certainly not going to request it.
Lord Haskel: They could broadcast by
satellite.
Q342 Chairman: Can I just be right
on this? I am looking at Chapter II, Article 3, which refers to
only a provider of a television broadcast, not on-demand broadcasting?
Mr Paulger: That is right. That is the case.
Q343 Chairman: So if I have right
Baroness Eccles' basic point and question to you, is this not
in danger of restricting the Country of Origin Principle?
Mr Paulger: This is a measure that would weaken
the Country of Origin Principle. As I said, the Commission is
deeply attached to the Country of Origin Principle; therefore
we do not like it.
Q344 Chairman: As we are too.
Mr Paulger: We do not like it, and we think
also that it is a little bit over the top because we are talking
here about a tiny percentage of the total volume of broadcasting
in the European Union. This must be under 5 per cent, so it is
perhaps a slightly disproportionate measure, but for the Member
States in question it is very important and we have to take account
of that political reality and so the Presidency has gone down
that road.
Q345 Baroness Eccles of Moulton: Can
I ask whether there have been concrete examples of when the tiny
number of Member States who are affected have seriously had to
receive material that has been offensive to their public that
would not be offensive in other Member States?
Mr Paulger: I would not use the word "offensive".
One has to distinguish between the rules in the directive and
the stricter national rules. A stricter national rule can ban
advertising to children. An advertisement for teddy bears is not
necessarily offensive but it does contradict the stricter national
rule. There are cases of broadcasters operating under the regulatory
regime that applies in their country of origin who target other
Member States which have stricter rules, and advertising aimed
at children is one of the classic examples. One of the longstanding
examples of this is TV3, which is a company that broadcasts from
the UK to Norway, Sweden and Denmark under the UK advertising
rules which are in conformity with the directive but not in conformity
with Sweden's stricter rules. The Danes do not mind at all. They
think this is good for their public because they have another
channel and there is more pluralism, but the Swedes object very
strongly to what they consider to be something that undermines
one of the fundamental elements of their broadcasting system,
that you do not advertise to children, so they complained. The
Irish have a big problem because they have banned advertising
for alcohol on television. The UK has not. Of course, in Ireland,
given the proximity and the language, this is a ban that is rather
difficult for the Irish to sustain if broadcasters coming from
Britain have lots of advertising for alcohol. You can understand
their position but from our point of view we are prepared to go
so far but no further because the Country of Origin Principle
is the cornerstone of this directive. We think that this proposal
goes as far as the Commission is prepared to go. It weakens the
Country of Origin Principle but we do not think it seriously undermines
it.
Q346 Baroness Eccles of Moulton: It
is not seen as a chink in the edifice of not giving way too much
to Member States' sensitivities that it applies far too severe
rules across the board? I am not talking just about this directive
but of the Commission principle that on the whole you have to
be very careful not to be too responsive to minority sensitivities.
Mr Paulger: Indeed. As I said, the Commission
does not like this provision. It does not consider that it undermines
the Country of Origin Principle to the extent that it would no
longer be effective and, if faced with a qualified majority, the
Commission would have to live with it. There will be no unanimity
for it.
Chairman: It is helpful to know why it
is in here and what the Commission feels.
Q347 Lord Fearn: Can we move on to
impact assessment? How did the Commission seek to quantify the
likely costs and benefits of the proposal? Is it even possible
to predict these costs and benefits? What groups did the Commission
consult? Was there too little consultation of new media players
and too much of established "traditional" broadcasters?
Do you agree with the findings of the RAND Europe study for Ofcom,
which suggested that the proposal would drive EU-based content
providers offshore?
Mr Paulger: May I ask Jean-Eric de Cockborne
to respond to this question?
Mr de Cockborne: The Commission did not attempt
to quantify the actual evolution of the market because this is
impossible to do. We could have asked a consultant to do it as
Ofcom has done it. The consultant would come with figures, but
it is very difficult to have accurate figures and we would only
know after about a year if those figures were accurate. We have
rather had a very broad public consultation. There are about 1,500
pages of comments which are available on our website from all
interested parties. It was an open consultation and we have had
a lot of comments from new entrants. We have looked at trends.
We identified nine groups of stakeholders: the public sector broadcasters,
the free-to-air broadcasters, pay-TV, the written press, transmission
companies, including cable, telecommunication, ISPs, the IPTV
linear service providers, video on-demand providers, including
mobile video on-demand, independent producers, consumers, national
authorities, the Commission itself, and we have also looked at
the effect on fundamental rights. For each of these nine groups
of stakeholders we have looked at whether the proposal would have
a negative, a positive or a neutral effect. We have looked at
five possible options. The first one was to repeal the directive,
the second one you are familiar with, so we looked in detail at
three options which were only a clarification of the terms, a
comprehensive change in order to cover also non-linear services,
or full harmonisation, and the impact assessment prepared with
the help of RAND, which is available on the web, shows that the
option chosen is the one which has the most favourable effect
on the largest number of providers. Another important point is
that the Ofcom approach was to say, "What is the cost of
regulating?". We thought there were two problems with this
approach. The first is that it is not really a choice between
regulating and not regulating because most Member States are already
regulating for the objective of general interest for the new services;
the second is, whether the cost of complying with one harmonised
set of rules at European level is higher than with 25 or 27 different
rules?
Q348 Lord Fearn: Does that mean you
agree with RAND?
Mr de Cockborne: RAND actually worked successively
for the Commission and for Ofcom and came up with opposite conclusions.
The other question is that in regulation for general interest
there are some elements which are very difficult to quantify.
The cost of regulation is relatively easy to quantify. Benefits
are more difficult if you take, for instance, ensuring that there
is appropriate protection of minors, what are the benefits and
how do you quantify those benefits? We think it is very difficult,
and that is why we had this approach with trends.
Q349 Lord Haskel: In view of the
revised proposal are you going to do any more work on the impact
assessment?
Mr Paulger: That is a good question because,
strangely, the system provides that the Commission must do an
impact assessment before it produces its proposal but there is
no obligation on the Council, that is, the Member States, or the
European Parliament to provide any assessment, impact or otherwise,
of their proposals during the legislative procedure, so the answer
is no.
Chairman: That is something on which
we ourselves on a number of occasions have expressed concern,
but as of today I think we must push on to the last question.
Q350 Lord Haskel: On the matter of
implementation, you have told us about self-regulation. Does the
revised draft mean that there is going to be a change of emphasis?
The earlier document seemed to be against self-regulation but
this document seems to be much more in favour of self-regulation
so does that mean that, for instance, self-regulation can continue
in the UK under Ofcom as we have it today?
Mr Paulger: Mrs Reding, as Commissioner responsible
for this area, is very much in favour of self-regulation as a
means of achieving objectives set down by the public authorities,
and she believes that the media world is becoming a world where
everything goes faster, it is more complex and the media operators
are themselves best placed to organise themselves through codes
of conduct or whatever in order to respond to the need to respect
the general objectives set down in Community directives or in
national laws, so we are very much in favour of co- and self-regulation
as a regulatory technique. This was our position at the outset.
The reason why in the initial proposal self-regulation is not
mentioned, but co-regulation is mentioned in the Articles and
co- and self-regulation were only mentioned in the recitals, was
that there may be a legal obstacle, and that is the existing inter-institutional
agreement on better law-making which has a section on current
self-regulation. Our lawyers were not sure that we could mention
self-regulation in the body of the directive so it was in the
recital. However, thinking has moved on. The Parliament has shown
itself to be very favourable to the development of co- and self-regulation,
and the Council too but with different emphasis. Of course, self-regulation
is more developed in some Member States than in others as a regulatory
technique, so regulatory traditions vary, but in the Council generally
there is a favourable approach to self-regulation. It is the first
time a proposal for a Community directive has mentioned self-regulation
even if only in the recital, and then co-regulation in the Article,
so that is a bit of an innovation. Now the negotiations in Council
have put self-regulation back into the Article, so it is stronger;
you are quite right, my Lord, and the mechanism whereby we would
see such a system working is where a Member State wants to use
self-regulation to achieve the results of the directive because
the Member State is bound by the results to be achieved but is
free as to the means that can be used. Where a Member State wants
to entrust a self-regulatory body with the achievement of those
objectives that is fine as long as the entrustment mechanism is
clear and there is a link between the entrustment and the results
to be achieved, because, of course, if the results are not achieved
then the system is not working. We believe that with the right
entrustment mechanism Member States could make much greater use
of self-regulatory bodies to achieve the objectives set out in
this directive in their daily operations.
Q351 Lord Haskel: And who will decide
whether the objectives have been achieved or not?
Mr Paulger: There is a monitoring provision
where the Commission reports regularly on the basis of input from
Member States.
Chairman: Mr Paulger, you have been beyond
the course of duty. We are quite exceptionally in your debt for
the time you have given us. I find typically with the Commission
that you are frank, positive and helpful in your discussions with
us. We are grateful to you and to your colleague for your time
today.
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