The Audio-Visual Media Services Directive underpins the single market in broadcasting. It covers both traditional broadcast and on-demand services. It sets minimum regulatory standards that states and national regulators must implement. It aims to
- preserve cultural diversity;
- protect children
- protect consumers;
- safeguard media pluralism;
- combat racial and religious hatred; and
- guarantee the independence of national regulators.
The Directive employs the country of origin principle. The broadcaster who obtains a licence and complies with the regulatory standards in any EU state may offer services in other EU states. without being subject to additional requirements. EU states cannot restrict what broadcasts the public receive or what broadcasters from other states can retransmit to their state.
The Directive requires broadcasters to promote the production of and access to European works. European works are audiovisual works that are either originated in an EU state or in states part of the European Convention on Transfrontier Television Works which are co-produced between EU and third countries.
In the case of television services, the Directive requires states to ensure that broadcasters, where practicable, reserve a majority proportion of the transmission time for European works including the time allotted to content such as news, sports events, and broadcasting. The broadcaster should reserve at least 10 percent of their time or alternatively allocate at least 10 percent of their programming budget for European works created by independent producers.
States are given flexibility as to how to promote European works. The Directive is to be reformed as part of the Digital Single Market Strategy.
The European Commission has promoted a digital agenda for Europe. It proposes to better exploit the potential of information and communications technologies in order to foster innovation, economic growth, and progress.
The Digital Market Strategy was adopted in 2015. It has initiatives in a range of areas including e-commerce, consumer protection copyright, VAT, audiovisual media, data protection, cybersecurity, and e-government.
The strategy seeks to provide better online access to digital goods and services and promote an environment for digital networks and services can prosper.
The Audio-Visual Media Services Directive covers broadcasting. It includes provisions for a quota of works by independent European producers. It makes provision
- for controls on advertising and sponsorship including a prohibition on sponsoring news and current affairs;
- provisions for the protection of minors;
- a right of reply for persons with legitimate interest.
The Commission has identified certain key issues in its proposal for the revision of the Audio-Visual Media Services Directive.
- promoting European audiovisual content;
- strengthening the single market;
- ensuring a level playing field;
- providing an optimal level of consumer protection;
- strengthening media freedom and pluralism
- access to information and accessibility to content for persons with disabilities.
The consultation has proposed extending services under the directive to TV-like services in the online field. An amending directive, adopted in May 2016, seeks to create a fair environment and follow the above principles.
EU Initiatives in Sector
There is a significant body of European law that underpins the day-to-day operations of the technology sector. It underpins the single market and reduces non-tariff barriers to trade. It facilitates compliance with the single set of standards rather than in multiple standards in each jurisdiction at multiples of regulatory cost.
The Digital Market Strategy includes 16 legislative and other measures to create a single market for digital services. It seeks to harmonise copyright, consumer protection and VAT laws for digital goods and services.
The Connectivity Package seeks to reform competition and consumer protection rules for telecommunication business.
The EU has announced plans to update EU Copyright Law in December 2013. It has adopted a legislative proposal on cross-border portability, to ensure that subscribers to online content can continue to use them while temporarily present in another state.
The EU guarantees freedom of reception and retransmission of broadcasts. It seeks to facilitate a single market for audiovisual services and to increase choice and competition. Media service providers regulated in one EEA state may broadcast in any other EEA state.
EU rules on media provide for minimum standards and obligations. This includes prohibitions of broadcasting on inciting hatred based on religion, sex, race or nationality. It provides for minimum quotas for independent production companies. Sports events of major national importance are to be available to watch for free on terrestrial television.
UK Trade in Telecommunication and Information Services
UK exports in creative services amount to nine percent of all exports of non-financial services £13.9 billion, while imports are £11.3 billion euro. The UK is a leading international hub for global media groups. Trade in creative services may take the form of the cross-border supply of services electronically. It may involve establishment in another state.
A significant amount of UK export services comprises telecommunication computer and information services. This includes
- news agency and other information related services;
- telecommunication services;
- the broadcast transmission of sounds, data, and images.
The EU is the destination of 43 percent of exports and 56 percent of imports in the sector.
It is estimated that digital services amount to over five percent of the UK’s gross value added in 2015 with a turnover of £151 billion pounds.
The UK has been described as a pre-eminent hub for international broadcasting in the EU. It has double the nearest state’s number of channels. At least 1,100 channels are licensed by Ofcom.
The EU has abolished roaming charges by telecommunication, operators within the EU. Wholesale prices that networks charge each other must be capped accordingly. The Commission has proposed to achieve this through secondary legislation to be enforced by national regulatory authorities.
Trading under WTO rules has been described as a regulatory cliff edge. It is a highly unattractive option. The WTO rules and schedules provide no ready mechanism for securing and enforcing freedom to provided services. Generally, they may be enforced on a state-to-state basis only.
Audiovisual and other cultural services were excluded from negotiations during the WTO Uruguay Rounds. EU sought to exempt any product or service related to culture from WTO agreements. There is no cultural exception. Member countries may use flexibility in determining their schedules and not commit to liberalisation in cultural goods and services.
Trading in the audio media sector under WTO rules is extremely unattractive. The EU schedule of commitment, GATS commitments on audiovisual and other cultural services are excluded due to the cultural exception. EU states could apply discriminatory provisions in relation to the UK in relation to the audio-visual sector. This situation would be unlikely to be improved by the Trade in Services agreement as the EU has indicated it shall continue to exclude audiovisual and other cultural services.
The Council of Europe Transfrontier Television Convention establishes rules for the free circulation of television programs between signatory states. It follows a country of origin system for television broadcast. It has significant limitations including that several states including Ireland, Luxembourg, Sweden are not signatories. It does not apply to on-demand services. Its implementation relies on mutual assistance and cooperation between the state parties.
In common with other services sectors, access to skills is critical in the digital services sector. The EU regulation on access to skills is critical in creative services. In principle, skills are prioritised through Tier 2 immigration rules. However, this introduced an amount of inflexibility.
Although the percentage of EU work is relatively small, the foreign-born workforce, in particular, the EU workforce, has disproportionately assisted growth in the digital sector. Seventy-five percent of U.K. cross-border data flows are with EU countries. This includes communications, search audio and video transactions and data flows.
Creative services are dependent on intellectual property preservation. This includes copyright, trademarks, and design rights. The WTO Trade-Related aspects of Property Rights seeks to promote the effective protection of intellectual property rights by setting standards for their protection. The agreement is weak in providing enforcement and falls much short of the protection effort by EU Law.