3RD REPORT: TELEVISION WITHOUT FRONTIERS
Letter from Shaun Woodward MP, Minister
for Creative Industries and Tourism, Department for Culture, Media
and Sport to the Chairman
I am pleased to enclose the Government's response
to the EU Select Committee's report on the Commission's proposal
to amend the EU's Television Without Frontiers Directive.
I was very pleased to have the opportunity to
explain to members of the Committee, in both written and oral
evidence, the Government's thinking on the proposal; and I am
delighted to see that the Committee and the Government are substantially
in agreement on the issues arising from it.
I and my officials stand ready to assist the
Committee in its further consideration of this important issue.
29 March 2007
GOVERNMENT RESPONSE
The Government welcomes the Committee's report.
In view of the importance of the Directive and the issues it raises,
and the discussions currently in progress in the Council, the
report is a timely contribution to the debate about the future
of regulation in the broadcasting and new media sectors.
Our responses to the specific conclusions and
recommendations of the Committee are set out below. We particularly
welcome the Committee's support for the reduced scope of the revised
proposal, and its strong support for the Government's stance on
the Country of Origin principle.
We stand ready to provide such further information
as the Committee and the House require to proceed with their scrutiny
of the proposal.
THE CONCLUSIONS
AND RECOMMENDATIONS
OF THE
COMMITTEE
The scope of the proposal
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)
The Government agrees that the existing
Directive requires revision in order to reflect developments and
progress in the broadcasting sector.
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)
The Government shares the concern of the
Committee and other witnesses about the number of different regulatory
schemes which could potentially apply to some audiovisual media
services. We are working to ensure that the regulatory framework
is as clear and straightforward as possible.
We agree that the original scope of the proposal
was too broad and 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)
The Government welcomes the Committee's
support for the reduction in scope from the Commission's original
proposal. This change resulted from a proposal by the United Kingdom.
While the Government would prefer not to extend the scope of the
Directive beyond television broadcasting (as in the existing Directive),
we recognise that most other Member States support at least a
limited extension to on-line services which provide content similar
to television broadcasting. We believe that the proposal as it
now stands (as outlined in paragraphs 70-74 of the report) represents
an acceptable way forward.
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)
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)
The Government recognises that there may
be some difficulties in determining whether certain services fall
within the scope of the Directive, and that the continuing development
of new media services is likely to raise questions about its implementation
and enforcement. This was an important consideration in our case
against extending the scope of the Directive. We are working to
ensure that the definitions in the Directive are as clear as possible
so as to provide as much certainty as possible about whether or
not any particular service is within the scope of the Directive.
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)
The Government agrees that EU rules on
television advertising should be liberalised. We consider that
it would be impractical to attempt to extend similar provisions
to new three media services, and neither the Commission, nor the
European Parliament nor the Council of Ministers has proposed
doing so.
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)
The Government agrees with this view.
We are concerned that the identification of
some media services as "television-like" may lead some
to conclude that eventually "like-services" should be
regulated in a "likemanner", ie a perfectly "level
playing field" (Para 82).
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)
The Government believes that a lesser degree
of regulation is appropriate for on-demand services, where people
can exercise greater choice and control over the content they
view. We recognise the risk of greater regulation of such services
to bring them more into line with the regulation of television
broadcasting. We will continue to argue against such a move.
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 Government believes that existing EU
legislation on the internet and other new media services delivers
adequate regulation at the European level. As noted above, we
would have preferred not to extend the scope of this Directive
beyond the current television broadcasting. We can accept the
proposed extension to cover new media services which provide content
similar to television broadcasting, but we do not believe that
any further regulation is either necessary or desirable.
The Country of Origin principle
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)
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)
The Government welcomes the Committee's
strong support for the Country of Origin principle. We have made
it clear to our EU counterparts that we cannot agree to any proposals
which would undermine the principle. The current proposals, (outlined
in paragraphs 98-103 of the report) which introduce new procedures
for Member States who are concerned about the content of television
broadcasts received from other Member States, are at the limit
of what we can accept.
Quantitative rules on advertising
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)
The Government believes that the quantitative
rules on advertising should be liberalised, and agrees with the
Committee that consumers themselves are the best regulators in
this matter. We therefore support the Commission's proposal to
remove the daily limit on the amount of advertising a television
channel is allowed to carry and attempts to simplify and rationalise
the rules governing the insertion of advertising within and between
programmes.
We are concerned about the likely implications
for free to air programming, particularly children's programming,
of the proposed 30-minute rule. (Para 126)
The Government shares the Committee's concern.
Content rules
There was general acceptance that current qualitative
advertising rules were satisfactory and did not require reform.
We agree with this view. (Para 130)
The Government agrees that the qualitative
advertising rules in the Television Without Frontiers Directive
do not need reform and welcomes the fact that only minor modifications
are currently proposed to them.
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)
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)
The Government agrees that decisions on
when and how to promote European and independent works are best
left to Member States. We also agree that imposing quotas on on-demand
services would be both impractical and unreasonable.
We believe that concerns over harmful and illegal
content, particularly as they relate to children, remain valid
and paramount. (Para 135)
The Government agrees that protecting people,
particularly children, from harmful and illegal content is of
the utmost importance. However, we believe that effective self-regulation,
such as the successful Internet Watch Foundation, combined with
access controls, such as pin numbers and passwords, and improved
media literacy are the best way to protect people from such content.
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)
The Government agrees that the rules set
out in the current proposals from the Council and the European
Parliament do not pose a threat to freedom of speech in the United
Kingdom.
Product placement
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)
The Government recognises this risk and
fully supports proposed provisions in the revised Directive which
would prohibit product placement in situations where it could
be perceived as influencing the editorial content.
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 the future, we believe the
issue of product placement must be revisited. (Para 157)
The Government agrees that it will be important
to keep product placement under review, in terms both of its possible
contribution to the revenues of programme-makers and media service
providers, and of the way in which the provisions regulating product
placement in the revised Directive will operate.
Self-regulation
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)
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)
The Government welcomes the Committee's
strong support for co-and self-regulation and agrees that self-regulation
is to be preferred as a means of regulating the broadcasting and
new media sectors. The Government's objective in negotiating the
text of the revised Directive is to ensure that co- and self-regulation
can be used to implement and enforce the Directive and that, wherever
possible, existing co- and self-regulatory regimes are able to
continue.
Impact Assessment
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)
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)
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 new media service providers
as soon as is practicable. (Para 179)
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.
The Government agrees that a more detailed
impact assessment at EU level would be desirable, in view of the
significant changes to the proposal which the Council and the
European Parliament have proposed. The Government has kept in
close contact with stakeholders in the United Kingdom in order
to try to assess the impact of the proposals on UK businesses,
and has encouraged stakeholders to speak directly to the Commission,
where appropriate, and to work with their counterparts in other
Member States to ensure that their views are heard in the EU institutions.
The Government will produce a full impact assessment of its eventual
proposals to implement the revised Directive in the United Kingdom.
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