Government publishes report on balance of payments between television platforms and public service broadcasters consultation.

As reported in N2K, in March 2015 the Government published a consultation on The Balance of Payments Between Television Platforms and Public Service Broadcasters.  It had two central themes: (i) supporting investment and growth in the creative industries sector; and (ii) supporting reach and discoverability of PSB content for viewers.  It focused on three particular issues:

  • whether the case had been made for the repeal of s 73 of the Copyright, Designs and Patent Act 1988;
  • whether the current “Must Offer/Must Carry” regime should be amended or removed to create freer negotiations between PSBs and platforms, and whether Ofcom should have an additional role of adjudicating any potential future commercial disputes where there is consumer harm; and
  • whether the current Electronic Programme Guide (EPG) regime is fit for purpose (in particular, whether to amend the existing framework to be technology neutral and whether to extend it to include video-on-demand and High Definition services).

The Government has concluded that, as was argued strongly by many stakeholders, the UK broadcast and production sector is a global success story that must continue.  The success is rooted in a mixed ecology that features wholly commercial broadcasters, commercial and non-commercial PSBs, a strong independent production sector and a range of platforms all of which give UK audiences an enviable choice of what content to watch and how to watch it.

Taken as a whole, the Government says, the overall regulatory regime works to support this landscape.  Therefore, the Government has decided that deregulation of the “Must Offer/Must Carry” legislation in the Communications Act 2003 is “not desirable and would risk endangering the balance of these relationships”.  Whilst arguments were advanced about the potential for money to flow from platforms to broadcasters and from there into new UK commissions, this end result cannot be guaranteed without additional regulation, the Government says.  This would not be proportionate without endangering the principle of universal availability that governs access to licensed PSB services on all major platforms and which is one of the principles of the PSB system.

The Government has also decided that s 73 of the CDPA should be repealed.  This should not result in retransmission fees flowing from cable operators to PSBs, it says.  A further technical consultation will follow, which will consider what transitional arrangements may be required while PSBs, underlying rights holders and platforms adjust to this change in legislation.  This will be carried out by the Intellectual Property Office. The Government says that s 73 should be repealed because it is harming PSBs through the revenue lost when internet­based companies exploit their content without paying them a copyright fee.  Therefore, the Government intends to bring forward legislation to repeal s 73 at the earliest opportunity.

As for the regulation of EPGs, the Government says that discoverability of content is set to become an increasingly challenging area to regulate as convergence and advanced search functions allow viewers a greater range of ways to find and explore content.  In the Government’s view, at present, there are insufficient grounds to change the regulations governing prominence for linear PSB channels or extend them to the PSB players.  However, the Government will continue to keep the area of regulation in an online context under close review as technology continues to evolve, particularly in light of the fact that some stakeholders raised wider concerns relating to the challenges of the current regulatory system posed by the online world and technological development, but which were not the focus of the consultation (e.g. the impact of ad-skipping software on broadcasters’ revenues).

On the question of Standard Definition and High Definition channel access, the Government does not think regulation is necessary, but expects the industry to work to ensure that providers switch SD for HD feeds in the most prominent EPG slot where the channel is placed, as it is clearly in the viewer’s interests.  To read the Government’s response in full, click here.