A Bruising Brexit for British Broadcasting?

With just six months left on the clock for the UK’s hitherto shambolic exit from the European Union, the various arms of the British Government have been busy issuing guidance notes on, well, just about every aspect of human endeavour should the deadline pass without a transition deal in place.

Containing caveats reminiscent of the language of T&Cs in pharmaceutical or financial services advertising, the guidance notes stress, “A scenario in which the UK leaves the EU without agreement (a ‘no deal’ scenario) remains unlikely given the mutual interests of the UK and the EU in securing a negotiated outcome.

“Negotiations are progressing well and both we and the EU continue to work hard to seek a positive deal. However, it’s our duty as a responsible government to prepare for all eventualities, including ‘no deal’, until we can be certain of the outcome of those negotiations.”

Recent guidance notes have included topics such as:

  • The government’s guarantee for EU-funded programmes if there’s no Brexit deal;
  • Labelling tobacco products and e-cigarettes if there’s no Brexit deal;
  • Ensuring blood and blood products are safe if there’s no Brexit deal;
  • Passport rules for travel to Europe after Brexit;
  • Data protection if there’s no Brexit deal;
  • Driving in the EU if there’s no Brexit deal;
  • Mobile roaming if there’s no Brexit deal; and, of course,
  • Broadcasting and video on demand if there’s no Brexit deal.

Published under the aegis of the UK Department for Digital, Culture, Media & Sport, Guidance – Broadcasting and video on demand if there’s no Brexit deal, details how the rules for broadcasters and providers of video on demand services would likely change if the UK leaves the EU with no deal.

Prior to 29 March 2019, UK-based broadcasters and video-on-demand providers are covered by the EU’s Audiovisual Media Services Directive (AVMSD) (Directive 2010/13/EU) which sets out a “country of origin principle”. This means audiovisual media service providers are only subject to the jurisdiction of one EU country. A broadcasting licence issued by Ofcom, the UK communications regulator, is valid in the whole of the EU. The provider therefore need only comply with Ofcom rules, regardless of where the licensed service is received within the EU.

There are a number of criteria for determining which country has jurisdiction over a broadcast or VOD provider. These include “establishment criteria”, i.e., where the head office and/or editorial decisions for a service are taken, and “technical criteria” relating to the location of satellite uplinks employed by the provider, or the use of satellite capacity related to an EU country.

The AVMSD is in the process of being revised, a process which began in 2016. A new version is expected to be adopted by December 2018 and implemented by EU countries by August 2020.

The revised rules are expected to strengthen the country of origin principle and extend the European audiovisual rules to video-sharing platforms (such as Youtube). They are designed to ensure better protection of minors against harmful content, and include stronger rules against hate speech and public provocation to commit terrorist offences. They also seek to enhance the promotion of European works, ensure more flexibility in television advertising and reinforce the independence of audiovisual regulators.

The strengthened Country of Origin Principle states that providers only need to abide by the rules of a Member State, rather than those of multiple countries, and stresses more clarity on which Member State’s rules apply in each case. It introduces the same procedures for both TV broadcasters and on-demand service providers, as well as possibilities for regulatory exemptions in the event of public security concerns and serious risks to public health.

The new rules envisage that video-sharing platforms will put appropriate measures in place to protect minors. The revised Directive will also apply to user-generated videos shared on social media platforms where providing audiovisual content is an essential functionality of the service. New rules will also apply to video-sharing platforms to protect people from incitement to violence or hatred and content constituting criminal offences.

VOD providers will be expected to promote European works in on-demand catalogues with at least 30% of their inventory being European content (an EU ‘Notice to Stakeholders’ for audiovisual media services has confirmed works originating in the UK will continue to be classed as European Works after exit).

More flexibility will be allowed to television advertising. While the overall limit of 20% of broadcasting time will be maintained between 06:00 to 18:00, the revised rules will give broadcasters will be able to choose more freely when to show ads throughout the day.

Lastly, the independence of audiovisual regulators will be reinforced in EU law by ensuring that they are legally distinct from their respective governments and functionally independent from the government and any other public or private body.

So, where does this leave UK broadcasters and VOD operators?

Well, the UK Government is hoping a 25-year-old convention will provide some certainty.

Back in 1993, the UK, along with 20 other countries, signed up to the Council of Europe Convention on Transfrontier Television (ECTT). Signatories to the ECTT include Austria, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Finland, France, Germany, Hungary, Italy, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia, Slovenia and Spain.

Today, the Council of Europe operates as a human rights body, advocating “freedom of expression and of the media, freedom of assembly, equality, and the protection of minorities.” This is distinct from the European Commission, the European Union’s executive arm, which takes decisions on the Union’s political and strategic direction; and the European Council, which has no formal legislative power, but is a strategic body that acts as a collective presidency for the Union; and the Council of the European Union, which is part of the EU legislature (the other legislative body being the European Parliament), and represents the executive governments of the EU’s member states.

Unlike the EU, the Council of Europe cannot make binding laws, but it does have the power to enforce select international agreements reached by European states on various topics. The best-known body of the Council of Europe is the European Court of Human Rights, which enforces the European Convention on Human Rights – an area slightly outside the remit of UK communications regulator Ofcom.

The original ECTT guaranteed freedom of reception between the parties and set out that parties to the Convention must not restrict the retransmission of compliant programmes within their territories.

However, for EU signatories and their dealings within the single market, the current AVMSD takes precedence over the ECTT. Also, the ECTT does not have the same enforcement mechanisms as the AVMSD. There was a standing committee to resolve disputes, but this has not met since 2010.

In February 2011, the then vice-President of the European Commission, Ms Neelie Kroes, confirmed the position of the European Commission with regard to a draft second amended protocol to the ECTT. The letter underlined that the European Union has exclusive competence for the issues covered by the draft revised Convention and that EU member States are not allowed to become party to the Convention on their own. The letter furthermore indicated that the EU did not intend to become a party to the Convention as this would constrain the speed and scope of any future policy response in the areas covered.

As a statement on the Council of Europe website explains, “For its part, the Committee of Ministers of the Council of Europe endorsed proposals by the Secretary General for priorities in 2011 which included, in particular, to discontinue work on trans-frontier television following the termination of the negotiations of the Convention. This was confirmed by the Committee of Ministers when adopting the Programme of Activities and budget for 2011.”

Despite this, the guidance from the UK’s Department for Digital, Culture, Media & Sport states, “In the absence of the AVMSD regulatory framework, the ECTT framework continues to apply and may have increased relevance. The 20 EU countries that have signed and ratified ECTT will be required to permit freedom of reception to services under UK jurisdiction (how this right is given effect in each country may depend on national law and how the ECTT has been implemented locally). In turn, the UK would be required to permit freedom of reception for services which originate from EU and non-EU countries that are parties to the ECTT.”

The guidance says that details will be “confirmed in due course” regarding the seven EU countries (Belgium, Denmark, Greece, Ireland, Luxembourg, The Netherlands and Sweden) that are not signatories to the convention.

Even if it eventuates that its signatories are bound by the quarter-century old framework (with none of them contesting its validity), the ECTT does not cover on-demand operators – the first commercial VOD service in the UK, rolled out by Kingston Communications, was not launched until 1998.

According to the UK Department for Digital, Culture, Media & Sport guidance, in the event of a no-deal Brexit, “The ECTT does not provide for freedom of reception for video-on-demand services, and so providers of these services will need to comply with the requirements of AVMSD for jurisdiction. The regulation and authorisation of video-on-demand service is determined locally and providers should seek local legal advice with regard to the status of their service.”

For both broadcasters and VOD operators, if there is no Brexit deal before March 2019, “… the country of origin principle will no longer apply to services under UK jurisdiction that are broadcast into the EU, as the UK would be classified as a third country.”

This would mean that EU countries would be free to take whatever measures they see fit with regard to UK-originated media services, provided the measures comply with Union law and the international obligations of the Union.

The advice from the UK Government is that, prior to Brexit, operators would need to “assess on a case-by-case basis” whether their current licence would continue to be accepted in the EU countries where the service is made available, and seek independent local advice if necessary.

“It is your responsibility to take measures to ensure that you can obtain a valid licence or authorisation to ensure compliance if it is required,” states the guidance. “You should assess if a service you provide is available in the EU. If it is a UK service, and not receivable in the EU, you would not need to take any action. The Ofcom licence would still be valid on exit.”

The UK Department for Digital, Culture, Media & Sport also acknowledges that, should ECTT continue to apply (as it insists it will), operators may need to have two or more licences – an Ofcom licence for services receivable in the UK (which it says should apply in other ECTT countries), and licences for those EU countries not party to the ECTT.

So, will all of this ‘not quite certain’ certainty lead to a flight of media operators from the UK? Well, the domestic broadcasters will stay, but for companies like A+E Networks, Discovery, Disney, Fox and Turner, who broadcast channels into the EU via Ofcom licences, the question of relocating or restructuring will have to be considered.

The Commercial Broadcasters Association (COBA), which represents these broadcasters (among others), has accused the UK Government of providing “little detail on the type of arrangements the UK is seeking in its negotiations with the EU on broadcasting”.

In a statement, it said, “International broadcasting needs access to EU markets to continue to broadcast. Under current law, the UK grants a broadcasting licence which is recognised by other EU Member States. Without alternative arrangements, this recognition will no longer be granted once the UK leaves the EU, and broadcasters would reluctantly be forced to restructure their European businesses in order to obtain a licence in a remaining EU Member State.

“Furthermore, like many sectors, international broadcasting cannot wait until the March 2019 ‘cliff edge’ to undertake any restructuring that may be necessary as a result of the UK’s withdrawal from the EU. Businesses need several months to put contingency plans into place, as this may involve significant changes to their operations.”

The Department for Digital, Culture, Media & Sport guidance does say that companies can retain their head offices in the UK and, at the same time, qualify for jurisdiction in an EU state thereby obtaining an AVMSD licence. This would be contingent on a company having a significant part of its workforce is located in an EU country, but “technical” criteria could apply if a service is provided via an uplink in an EU country. In most cases, the guidance acknowledges, “… this would either be Luxembourg or France, as the majority of EU broadcasting satellites are operated by these two countries.”

While relocation scenarios are yet to play out and arguments between Westminster and Brussels are ongoing, the countdown to Brexit continues.

In what seems a rejoinder to the famous “Keep Calm and Carry On” slogan, the UK’s Department for Digital, Culture, Media & Sport’s guidance concludes:

It is in everyone’s interests to secure a good deal for audiovisual media services for both sides, but we have a duty to plan for the alternative. The government has taken a responsible approach to prepare for all eventualities.

This notice is meant for guidance only. You should consider whether you need separate professional advice before making specific preparations.

It is part of the government’s ongoing programme of planning for all possible outcomes. We expect to negotiate a successful deal with the EU.

For more, see https://www.gov.uk/government/publications/broadcasting-and-video-on-demand-if-theres-no-brexit-deal/broadcasting-and-video-on-demand-if-theres-no-brexit-deal


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