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Conference on Convergence in European Digital TV Regulation at Warwick (UK), April 20, 1998
Christopher T. Marsden
Keynote Speaker
Paul Bolt, Head of Broadcasting Policy Division, Department of Culture Media and Sport
The UK Presidency and the Future of Content Industry Policy: A View From Birmingham
Paul Bolt:
Currently Head of the Broadcast Policy Division, at the Department for Culture, Media and Sport, having headed the Broadcasting Bill Unit in 1995-6. Mr Bolt has worked within the Department since its formation as the Department of National Heritage in 1992, and previously occupied varied managerial and administrative posts within the Home Office. He joined the Civil Service in 1975, having read economics at Cambridge.
Communications Convergence: The Green Paper
by Bernard Clements
Bernard Clements: Bernard Clements is with the EC's Telecommunications Policy Directorate in DG XIII. He has over 25 years experience in the sector with manufacturers, operators and users, in the Americas, Europe, the Middle and Far East. Prior to joining the European Commission in 1993, he spent some ten years as a consultant, latterly based in Paris and Madrid. In DG XIII he works on regulatory policy, particularly in the digital television and convergence areas. He worked previously on the regulatory reforms for the post-1998 competitive environment for telecommunications, and has supported EU assistance programmes in telecommunications regulation in Latin America and Eastern Europe.
Abstract:
In December 1997 the European Commission published a Green Paper on the regulatory implications of the convergence of telecommunications, media and information technology sectors. It came on the eve of the full liberalisation of the telecommunications sector. In assessing the regulatory consequences, the Green Paper takes the approach of identifying actual and potential barriers to convergence (Chapter III), and of suggesting ways in which these may be overcome (Chapters IV and V). Existing barriers identified include access restrictions (to users, to networks and to content), currently high prices for telecommunications services and EU market fragmentation. Among the potential barriers are market entry and licensing restrictions, In examining the impact of barriers identified in the preceding chapter, Chapter IV considers first whether certain features of convergence create new challenges for regulation. It suggests that there could be problems of inconsistent regulation of essentially similar services based on the underlying infrastructure used to deliver them. Globalisation is also seen to be a major problem, with the attendant risks of side-lining national regulation and arbitrage of domestic markets. After a discussion of the principles to be applied to a future regulatory environment, the final chapter identifies options for the transition to a new regulatory environment.
Panel 1: Content Regulation and Convergence Policy
Stefaan Verhulst (PCMLP, Oxford - Chair), Damian Green MP (House of Commons Select Committee on Media, Dr Beth Noveck (Yale University), Julian McGougan (Secretariat, ITC)
Damian Green MP: Damian Green has been the Member of Parliament for Ashford since 1997, serving on the Culture, Media and Sport Select Committee. He is Director of the European Media Forum, Vice-President of the Tory Reform Group and Vice Chairman of the Future of Europe Trust. From 1992-4, he worked on media policy in the Prime Minister's Policy Unit. He was previously a financial and business journalist in public service and commercial television and radio, and in print with The Times of London. His most recent pamphlet is 'Regulating the Media in the Digital Age' (1997).
Damian Green MP will argue that the European Commission Green Paper on Media Convergence is in danger of encouraging policy makers to become infatuated with new technology. He argues that if policy makers simply assume that what is technically possible will prove attractive, they will change regulation in ways which will do damage to traditional broadcasting. He argues that Europe should base future media regulation on two principles: (1) The need for stronger competition between networks, and between service providers; (2) The need for Europe to retain a strong production base. It is vital that these two principles should be regarded as being equally relevant.
Julian McGougan: Joined the ITC's Secretariat from Oftel in 1997, as the Senior Policy Assistant with the primary role of providing analysis and advice on convergence. He arrived at Oftel in 1996 from the Treasury, to provide policy advice, primarily on mobile telephony. First entered the Civil Service in the Ministry of Defence in 1984, transferring to H.M. Treasury in 1988 to undertake economic forecasting (as part of the Government's public forecasting responsibilities) and then the government's privatisation programme in 1990.
Dr Beth Noveck: Beth Simone Noveck, a Fellow of the Yale Law School Project on the Information Society (http://www.law.yale.edu/infosociety/), is a graduate of Harvard University and the Yale Law School where she received an Olin Foundation Fellowship for research on Convergence and the Limits of Regulation. She completed a doctorate at the University of Innsbruck and did postgraduate research at the University of Oxford. She serves as a member of the Telecommunications Law Committee of the Association of the Bar of the City of New York. Her research interests focus on comparative media and telecommunications law and policy. In addition to various articles on German, Austrian and Swiss politics and culture, she is the author of recent pieces on: "Fahrvergnügen on the Datenautobahn: Germany Confronts the Information Age"; "Programming Transparency in an Electronic Democracy: Are Computer Screens Windows or Mirrors?"; "Information Economy as Information Society: Educating the Business Leaders of a Wired World."
Convergence and Dialogue: Re-regulating Content in the Public Interest (Abstract)
Convergence is less about conflating technologies (and merging conglomerates) than it should be about bringing people together in open public dialogues and meaningful private conversations. In a digitally networked environment, the new "information appliances" of the future might portend access to vast riches of information and new sources of robust communication. Digital, multimedia, on-demand television might provide us with 500 channels, but the quality, content, interactivity, interoperability and reliability of those stations will be a function, less of the technology, than of the regulatory framework in which it is allowed to develop. As we move away from outdated, Procrustean models of speech regulation, divided into broadcast, telephony and print, toward content regulation independent of the form of the medium, it is vital to reassess from a cross-cultural perspective the expressly political, teleological goals of content regulation in the public interest. With public policy objectives currently focused on creating competition through reregulation in order to promote economic growth, there is a danger that the political consequences will be neglected. This talk will suggest that Europe should not abandon its unique legacy of media, in particular broadcast, serving the democratic public interest but should satisfy its goals with new forms of regulation beyond traditional rules of legal liability, including: technological solutions, such as the "V-Chip" filter. It should also encompass architectural approaches relating to spectrum allocation and structural strategies, aimed at proactively creating spaces for public conversation free from the Scylla of the centralised state or the Charibdis of the unaccountable free market.
EC Green Paper on the Convergence of the Telecommunications, Media and Information Technology Sectors and the Implications for Regulation: The Independent Television Commission's view
General Points
1.) Digital systems will change fundamentally the technology which delivers television to viewers. However, viewers are less interested in the system which delivers television to the screen, than in the programme and related services which are available. For television viewers, technology is a means to an end, not an end in itself.
2.) The ITC is concerned that the convergence debate has so far been too technology driven. Technological advance is certainly opening up a vast array of new possibilities for service provision, indeed the ITC is directly involved in a number of such developments. However advances in technology are adopted by consumers only where they provide desirable enhancements at an acceptable price. It is highly likely that the adoption of digital technology and many of the services that will be made possible will be a lot slower than the Green Paper appears to take for granted.
Overcoming the barriers to convergence
3.) Much will depend on whether new products and services are developed as a result of convergence which the public wants at prices which it is willing to pay. Key considerations for regulators will be the ability of service providers to gain access to viewers and to the content necessary to provide the services and the extent of interoperability between different networks and services.
4.) To the extent that PCs are required to access some of the new services, PCs would have to become much cheaper, more reliable and easier for non-technophiles to set-up and use before penetration increases so that such services become an option for most consumers. However, it is more likely that interactive services and aspects of the Internet which are appealing to consumers may appear on television sets and be more readily accessible there to more people than broadcast television on a PC.
5.) Regulation need not be a barrier to convergence. For example in the UK at present, regulation is not acting as a barrier to the development of new services.
The impact of convergence on regulation
6.) We have no doubt that the launch of digital television and new services like interactive television will raise new issues of interpretation under existing regulation. However, it will be impossible for some time to come to determine how far or how fast these developments will go, and to what extent they point to a new broadcasting environment for which the current regulatory arrangements will prove to be inadequate.
7.) It is likely that the key functions of broadcasting regulation will be of continuing relevance in an all-digital future, which includes converged services. The ITC sees those key functions as being:
8.) Rapid change alone is not sufficient reason to justify throwing away a successful regulatory structure. Indeed, rapid change in the television market is nothing new. The ITC, aided by frequent and timely revisions to UK broadcasting legislation, has been able to anticipate the introduction of new services and to apply its proven skills to them, providing the regulatory certainty for the investment in those new services to be made.
9.) Any reforms which are needed in existing regulatory structures should be evolutionary, not revolutionary. This would involve the adaptation of existing national regulation, which would build on its service-specific strengths. It is important that television continues to be regulated by a body whose interests are the services that viewers receive and the terms on which those services are made available, irrespective of the means of delivery.
10.) There is no need for the introduction of new EU-level regulation. Broadcasting reflects cultural identity and convergence will not change this. Each State will largely remain a television (and, indeed, radio) market to itself.
Content regulation
11.) The regulation of television content will continue to have an important place. Indeed, viewers demand that it does. Consumer protection regulation and the maintenance of public service programming obligations remain valid, realistic and effective. However, it is likely that the nature of content regulation will change. As the number of channels available to viewers by subscription or on a Pay-Per View basis increases and the means to control access to certain types of content is provided, it is important that content regulation remains appropriate.
Economic regulation
12.) Economic regulation will increasingly need to address, in the interest of viewers, the issues raised by broadcasters who are active in the provision of delivery systems as well as the supply of programme services. This applies to the three major platforms: terrestrial, satellite and cable.
13.) A crucial element of the ITC's ability to regulate commercial television competently on behalf of its viewers, is the fact that our roles as the issuer of licences, economic regulator and content regulator do not operate in isolation from each other. Decisions on content have and always have had economic implications. Both economic and content regulation are essential components in the award of licences and subsequent regulation. The links between these activities will not weaken as a result of the new services that technology is making possible.
Public service obligations
14.) For as long as viewers' expectations support public service obligations on free-to-air television, they will continue to have a place. The ITC, from its regular canvassing of viewers' opinions, detects no desire for a weakening of these obligations which have contributed to the high quality of diverse programming available on UK television. These obligations should ensure that the free-to-air channels continue to dominate viewing time, irrespective of which delivery platform they are viewed on.
Universality and analogue switch-off
15.) Television has a special place in the hearts of viewers: it reflects, and shapes, society. Analogue switch-off will not occur for ten years from the start of digital terrestrial services, and it is likely to take much longer. No Government is likely to be prepared to pay a high price in political terms (disruption to existing services, depriving the poor of access to television) to speed up this process.
16.) For as long as there is significant variation between Member States in the penetration of digital television, a co-ordinated EC switch-off for analogue television transmission is impractical. A co-ordinated strategy for the future use of the spectrum is, however, essential.
17.) The basis of a sound democratic society is informed citizens and it is via television that most citizens are informed of the society in which they live. The new services that are becoming available will enable citizens to be informed about, and potentially active in, society to an unprecedented degree. However, Government must be vigilant to ensure that society does not become split into information haves and have-nots. Analogue switch off, and the cost of providing a digital alternative to those who cannot otherwise afford one, will be a key consideration.
Panel 2: Multinationals, Regulation and Convergence
John Whalley (Co-Director, Globalisation Centre, Warwick - Chair), Robert Pepper and Jonathan Levy (Federal Communications Commission), Andrew Sharp (Interactive Media, WCRS)
John Whalley: Professor John Whalley is Professor of Economics at the University of Warwick, and Co-Director of the ESRC-funded Centre for the Study of Globalisation and Regionalisation. He is also Managing Editor of World Economy.
Robert Pepper:
Robert Pepper has been Chief of the Office of Plans and Policy (OPP) at the Federal Communications Commission (FCC) since December 1989. Under Pepper's leadership, OPP is responsible for policy questions that cut across traditional industry and institutional boundaries, especially those arising from the development of new technologies. At OPP, Pepper's responsibilities have included:
Before joining the FCC, Pepper was Director of the Annenberg Washington Program in Communications Policy Studies. He also has been Director of Domestic Policies and Acting Associate Administrator at the National Telecommunications and Information Administration, and developed a program on communications, computers, and information at the National Science Foundation. He is a graduate of the University of Wisconsin-Madison, where he also received his doctorate.
Jonathan D. Levy: Jonathan D. Levy is a senior staff economist in the Office of Plans and Policy at the Federal Communications Commission in Washington, DC. His primary activities include analysis of competition in broadcasting and multichannel video programming distribution markets and review of proposed changes in government regulation of the mass media, in particular broadcasting, cable television, and satellite television. Dr. Levy has had principal staff responsibility for a number of Commission reports and notices on home satellite dish issues. He has also participated in the design and implementation of FCC spectrum auctions in the Direct Broadcast Satellite and other services. Prior to joining the F.C.C. in 1980, he taught economics at the University of Wisconsin-Milwaukee. He holds a Ph.D. in economics from Yale University. In 1993, Dr. Levy was a Fulbright Senior Scholar in the School of Humanities at the University of Technology Sydney studying US-Australian trade in television programming and film. He has written several papers on Australian media policy.
Andrew Sharp: Andrew has since 1996 been the Research Director of Initiative Media, the media buying arm of WCRS, one of the largest international advertising agencies. Initiative bought more TV advertising airtime in 1996 than any other advertising agency in the UK. He was formerly an economic consultant with Hydra and London Economics, and co-author of the ADMEDIA report for DG XIII on the future of electronic publishing. In addition to researching and contributing to policy fora in domestic and European on- and off-line media, Andrew is a contributor to multinational fora, including the International Telecommunications Union 'Telecom Interactive' event in September 1997.
Convergence: Public Benefits and Policy Challenges (Abstract)
by Robert Pepper, Chief and Jonathan Levy, Senior Staff Economist Office of Plans and Policy, Federal Communications Commission
The convergence of voice, video, and data services, driven by rapid technological change, promises enormous benefits to the public, but these benefits will be diminished or delayed if regulators fail to meet the policy challenges of convergence. This paper examines these benefits and challenges by analyzing the US transition to digital terrestrial television and the impact of the Internet on US video distribution.
Convergence should benefit consumers by increasing competition and diversity in existing services, creating synergies or economies of scope from common provision of formerly separate services, and generating exciting new services. The preeminent policy challenge for regulators is to refrain from stifling convergent services by applying excessive regulation, such as "legacy" rules, to convergent services merely because they share some characteristics of traditional services.
In the broadcast context, legacy rules include limitations on what service can and must be provided (e.g., analog video with specific programming obligations) and entry and ownership restrictions. Digital television and convergence will challenge regulators to relax regulations no longer justified in an environment with many more providers and lower entry barriers than before. Indeed, the very market definitions on which some structural regulation is based will become increasingly irrelevant. One implication is that traditional industry specific regulation will no longer be appropriate or viable.
Government will retain important responsibilities as convergence progresses. It will need to create an environment in which firms are free to respond to consumer demand for the bandwidth and connectivity necessary to access convergent services, to ensure that no gatekeeper, whether it be a set-top box proprietor or an Internet browser, can block consumer access to convergent services, and to implement social policies (e.g., programming obligations and universal availability of a basic level of service) in a competition-friendly way.
Panel 3: Vertical Integration, Industrial Policy and European Competitiveness
Stefaan Verhulst (PCMLP, Oxford - Chair), Carole Tongue MEP (Media Committee, European Parliament), David Levy (BBC European Affairs)
Carole Tongue MEP: Carole Tongue MEP is Labour's member of the European Parliament for London East, representing East Ham and the London Boroughs of Havering, Redbridge and Barking & Dagenham. She is spokesperson for the Socialist Group on Culture, Youth, Education Sport and the Media. First elected in 1984, Carole has written reports on the European car industry, animal experimentation and the EU Urban Programme. In September 1996, her report 'The Future of Public Service Television in a Multi-channel Digital Age' was adopted by the European Parliament resulting in the addition of a protocol on public service broadcasting to the Amsterdam Treaty in June 1997. Between 1989 and 1991, Carole was deputy leader of the European Parliamentary Labour Party. She is a member of the GMB and MSF trade unions and a council member of Charter 88. http://www.poptel.org.uk/carole-tongue/
David Levy: David Levy is Head of European Policy and Chief Adviser, Policy Development, in the Policy & Planning Directorate of the BBC, where he works on broadcasting policy and digital regulation in the UK and Europe. Prior to his current post he worked for BBC News, both as a reporter on Newsnight and File on Four and as Editor of the Analysis programme on Radio 4. He spent the academic year 1996-7 at Nuffield College, Oxford, researching on broadcasting regulation. His forthcoming book is entitled Europe's Digital Revolution (Routledge).
Public Service Broadcasting and Convergence (Abstract)
by David Levy
What is the role of public service broadcasters in the converging communications environment? Some have argued that convergence renders public intervention in broadcasting is either unnecessary, impossible or undesirable, or indeed all three. Yet most of the existing public policy objectives in broadcasting remain valid under convergence. Increased concentration, the growth of new threats to competition, and the decline of the prohibitive approach to regulation, means that public policy will rely ever more on positive intervention via public broadcasters that ensure the universal availability of diverse, high quality and impartial content. As technologies and consumer behaviour change public service broadcasters need to adapt, producing new kinds of content, in new ways, and making it available across a range of new delivery systems.
Excerpts from Speech, Voice of the Listener and Viewer Conference, 6 March 1998
by Carole Tongue
The reason that I question what we mean by the term 'Convergence' is this. Some say that these changes mean that we will have to reduce regulation. They say that, as a fax and a film can be transmitted and received in the same way, they must be regulated in the same way. They argue that there is no such thing as broadcasting, just individual interaction. They argue that technology decrees that everything that we can receive on the screen must be treated the same for regulatory purposes.
For this reason, they see technological convergence as an excuse for regulatory convergence. Clearly, this approach would be very welcome from the point of view of telecoms companies. It is understandable that they would like the profits of broadcasting without any of those responsibilities that go with it. But this approach does not have, at its heart, any concept of the public interest. Outside of wish fulfillment for certain lobbyists, the issue of regulatory convergence bears very little examination. Yet astonishingly, it is the understanding that has been adopted by the European Commission's Green Paper on Convergence.
We need to be creating the material that appears on our TV screens - not importing. In economic terms, we will need to create to compete in a future in which everyone agrees that 'content will be king.' Our economic success or failure will be based upon our ability to create and export. In the UK, we have a role model for the rest of the world. The BBC currently invests £850m in programming. This is more than the whole European film industry combined. It is the largest investment from any broadcaster in Europe.
Public service broadcasting has only one servant - the citizen. Everything it does is for the benefit of its audience, which is everybody. Its remit is to put quality first. Commercial broadcasters however, have a legal obligation to satisfy shareholders before anyone else. In technical terms, I have already argued that Digital TV is progress. But if it is to be judged as progress in the real sense, it is essential that we maintain the kind of broadcasters who will play a active role in supporting the citizenship of a modern democracy. The kind of market-led fragmented free-for-all envisaged by the European Commission's Green Paper is inimical with these public service requirements.