DCMS consultation on revision of television without frontiers directive: BECTU response

3 August 2006

1. BECTU is the trade union for workers, other than performers and journalists, in the audiovisual and live entertainment sectors. We have had a sustained interest in the Television Without Frontiers Directive (TVWF) since its inception and have contributed to previous debates on TVWF revisions. We therefore welcome the opportunity to participate in the DCMS consultation on the current TVWF revisions proposed by the European Commission.
2. We recognise that the DCMS has set out a number of indicative questions in the consultation document but has also made clear that respondents should make 'any other observations..whether these are related to the questions or not'. Since the specific questions do not relate to issues of primary interest to us, we will therefore address our own main areas of concern arising from the debate on TVWF revision.

   Broad policy options for addressing TVWF

3. Before addressing specific points, we recognise that the European Commission (EC) identified 5 policy options for addressing the review
   • Option 1: repeal the whole TVWF Directive
   • Option 2: no change
   • Option 3: limited and specific amendments (UK Government's stated preference)
   • Option 4: Extension of TWVF to cover both linear (traditional broadcasting) and non-linear services, but with non-linear subject only to basic regulation (EC's own preference).
   • Option 5: extension of detailed regulation to both linear and non-linear services
4. Our own preference is for a mix of options 4 and 5 ie the extension of TWVF to non-linear services with some detailed rather than basic regulation of non-linear services. We express our disappointment that the Government has rejected the EC's approach so early and so aggressively, with an agenda that appears to be set by corporate interests rather than the more general interests of stakeholders. We note that Ofcom has predictably taken the same early view as the Government - which appears to be well in line with their light-touch, pro-corporate approach in other areas.
5. In the light of Government and Ofcom's already strongly expressed views, we question the extent to which this consultation is a genuinely open-ended process of policy-formation as opposed to a trawl for corporate-sourced ammunition to resist the EC's proposal.
6. We recognise and support the EC proposal that in the light of the recommended extension of TVWF regulation, the Directive itself should be renamed the Audiovisual Media Services Directive (AVMS).

   Scope: Extension to 'non-linear' services

7. We note and accept both the EC's broad identification of linear and non-linear audiovisual services and the proposed extension of scope of AVMS to cover both categories.
8. We note that 'non-linear service' is defined in Article 1 of the draft revised directive as 'an audiovisual media service where the user decides upon the moment in time when a specific programme is transmitted on the basis of a choice of content selected by the media service provider'. We take these to be on-demand services such as video on demand and broadcasting via broadband internet/mobile phones.
9. We accept that EC's underlying justification for the extension of scope. We specifically accept that 'broadcasters have to compete increasingly with non-linear (on-demand) services that offer the same or similar audiovisual media content but are subject to a different regulatory environment. This creates a non-linear playing field in the way content is delivered... therefore, a fresh approach is required.' (EC Explanatory Memorandum).
10. We note that the EC's Impact Assessment of the draft revised directive identified both economic aims and broader 'cultural and social aims' such as 'protecting European cultural heritage and diversity, promoting European content and cross-cultural exchange as well as supporting the development of independent producers'. We agree with this and believe that audiovisual services are at the same time both cultural and economic goods contributing to EU cultural diversity and democracy. This combined cultural and economic role of the audiovisual media makes AVMS the appropriate means of regulation across this sector rather than the alternative, and exclusively economic, e-commerce directive.
11. There have been widely inaccurate claims, from opponents of AVMS, that it will seek to regulate all forms of more detailed interpersonal electronic communication. This is not the case. It excludes all services where audiovisual content is incidental rather than the primary purpose. It does not seek to regulate the internet as such. It excludes, for example, emails, weblogs, electronic versions of newspapers and most on-line games. This undercuts the ludicrous and hysterical claims of opponents, such as the comment of an Ofcom official that the regulator did not want 'to police the internet like Chinese censors' (FT 3.6.06).
12. We reject the argument that the extension of scope will lead to the 'diversion of innovation, investment and employment from the EU to other countries' (UK Government, Partial Regulatory Impact Assessment). This is exactly the argument used by deregulators against any increase in regulation - even within the traditional, linear audiovisual sector. In fact, the EU already has, in some respects, a tighter regulatory regime than applies in competitors such as the US. This has not led to a migration of companies from the EU - partly because the audiovisual industry is a cultural as well as a commercial sector.
13. We also reject the argument, again by UK Government, that the extension of scope will extend TVWF coverage to 'a large number of small companies' who will feel 'disproportionately' the 'additional compliance burden' (Partial Regulatory Impact Assessment). This completely overlooks one of the key characteristics of the linear audiovisual sector - which is that it already includes a large number of small companies in independent production - many of which have prospered under such 'burdens'. This is, essentially, an argument against regulation per se rather than just the extension of scope. It should be rejected out of hand.
14. In summary, we support the proposed extension of scope to cover non-linear services, which in our view are cultural as well as economic services which should be regulated by AVMS rather than the e-commerce directive. We fear that, once excluded from scope, they would always be so and would exert growing pressure for future deregulation within the linear sector as well. We believe that this approach is contrary to the interest of viewers in access to audiovisual services of broad range and high quality and should therefore be avoided.

    Scope: Basic tier regulation for non linear services

15. We note that the EC proposal is for an extension of scope in respect only of 'basic tier' regulation for the non-linear sector. Such regulation would be restricted to areas such as protection of minors; prohibition of incitement to hatred; identification of the service provider; product placement and sponsorship; and some restrictions on advertising.
16. We accept that all of such basic tier regulation should apply to the non linear sector. We note the additional proposed requirement that this sector should 'promote, where practicable and by appropriate means, production of and access to European-produced work'. This relates to the issue of the TVWF European production quota, which is discussed below.

    European production quota

17. We welcome, in principle, the EC's retention of the European production quota for linear services. We believe the quota has proved to be a strong and effective stimulus for the production of European works. We further believe that the underlying justification for the quota remains valid. The cultural justification - that Europeans should be able to make and view programmes reflecting their own interests and values - is unchanged. The economic justification - that without counteracting regulation, market forces drive broadcasters to import a large and growing amount of American programming - remains compelling.
18. We take the view, however, that the European quota now needs to be strengthened:
    • We have, from the inception of the quota, argued that the qualification 'where practicable' should be deleted. The main function of this term sometimes appears to be as an opt-out clause. We retain the view that it undermines the aim of the quota and should be deleted.
    • We believe, in the light of the continuing structural imbalance with the US that there is a case for revising the quota from a 'majority' to 60%.
    • We acknowledge the arguments for a quota based on investment in European works (set at a minimum proportion of company turnover) rather than just programme hours and believe this should now be introduced as a complementary requirement, through not a replacement, for the existing hours-based quota.
19. Relating back to the previous section on extension of scope, we believe that consideration should be given to applying a quota approach within the non linear sector ie the proposed non linear requirement to promote production of European works should be implemented by means of a quota. This would translate a general principle into a more meaningful and specific requirement.

    Independent production quota

20. We support the retention of the 10% quota but believe that AVMS should give clear criteria for the definition of an 'independent'. In particular, we believe that an independent producer should not have significant ownership links with a broadcaster.

    Advertising

21. We note that the revised TVWF would remove some quantitative limits on advertising and aims to simplify the rules in this area. For example, in some programme areas, broadcasters would not be obliged, as they are now, to allow at least 20 minutes between advertising breaks. AVMS would also allow new forms of advertising including split-screen, virtual advertising and interactive advertising and would allow, for the first time, product placement.
22. We oppose excessive deregulation in this field, especially if it leads to a reduction in transmission time for original programming. We further believe that basic principles should be applied to all new advertising techniques:
    • Precise identification of advertising/sponsorship and clear separation from editoral content
    • A ban on surreptitious advertising and subliminal techniques
    • Avoidance of advertiser/sponsor influence on editorial decision

    Omission: creators' rights

23. We believe AVMS should acknowledge the rights of individual creators. Disputes between independent producers and broadcasters on the distribution of rights between their respective corporate interests omit completely the prior rights of individual creators.
24. We take the view that AVMS should acknowledge the rights of individual creators - who are often effectively compelled to assign rights to independent producers in just the same way that independents complain they are compelled to assign rights to the broadcasters.
25. The audiovisual sector ultimately relies on the contributions of individual creators and we therefore believe that their interests in intellectual property should be protected.

    Omission: promotion of employment

26. We note that AVMS acknowledges the employment dimension of the audiovisual sector. Recital 4 acknowledges that 'Traditional audiovisual media services and emerging on-demand services offer significant employment opportunities in the Community...and stimulate economic growth and investment.'
27. We believe, however, that the promotion of employment should be added as an underlying objective of AVMS. Pending the development of concrete proposals to promote employment in the sector, we believe that employment trends should be monitored and included in the regular reports on the application of the Directive.

    Omission: media ownership

28. We regret that media ownership again fails to be addressed within AVMS. Current EU policy, under which media ownership is regulated simply by EU competition law on a case by case basis is in our view, insufficient. Media pluralism and the need for limits on commercial media concentration are widely recognised as necessary for the democratic and cultural well-being of member states - and therefore cannot be regulated purely on the basis of economic criteria.
29. We believe AVMS should build on the earlier good work within the European institutions, including the EC Green Paper on Pluralism and Concentration (1992) and the various reports of the European Parliament. We believe the long-standing omission of this vital issue from TVWF should now be remedied by the inclusion, within AVMS, of specific clauses setting out an EU regulatory approach to the promotion of media pluralism and to the restriction of commercial media concentration.

    Conclusion

30. We hope the Government will take note of our views - especially on scope, on the European quota and on rectifying omissions (on creators' rights, employment, media ownership). We look forward to the outcome of the consultation and believe the test of its value as a genuine consultative exercise will be whether the direction of government policy in this area is amended.