By Chris Jones - 19th September 2006
Proposals to extend EU rules on the content of audiovisual services to new media platforms could stifle innovation, the British regulator Ofcom has warned.
The plans, unveiled by media commissioner Viviane Reding in December 2005, would see the current Television without Frontiers Directive extended to cover new media formats, including online IPTV and mobile phones.
But Ofcom is concerned that Reding’s proposals make no distinction between platforms.
New media formats such as Flash games, mobile telephone video clips and online streaming video would be subject to the same content and advertising rules as traditional TV broadcasts - even though they are used in a different way.
Tim Suter, Ofcom’s partner responsible for contents and standards believes that the ‘one-size-fits-all’ approach taken by the commission could have adverse effects.
“The commission’s ‘platform neutral’ approach is very seductive, but it is also deeply wrong,” he told theparliament.com.
“Reding argues that this is the best way to keep the regulations ‘future proof’ – to ensure that they do not become obsolete as technology progresses.”
“But we believe it could have the opposite effect – by forcing every new technology to comply with such rigid rules, the commission could seriously hamstring innovation in the EU.”
Suter stressed that all previous regulations of this sort had focused on the use, not simply the content itself.
“A film is not regulated in the same way when it is shown in the cinema, on a DVD or on TV, so why should this rule be applied to new media content?”
Companies could move offshore
Ofcom has commissioned a report from the consultancy used by the commission to carry out an impact assessment of Reding’s proposals to look more closely at the likely effects.
“Our report focuses on three key areas – IPTV, mobile multimedia and online games – and its findings are worrying,” Suter said.
“Perhaps our greatest concern is that the definition used by the commission to define the services covered by the directive is too vague, leaving considerable regulatory uncertainty for many companies.”
Ofcom’s fears that many innovative companies may think twice about basing their operations in the EU if they are worried that their services may be subject to the new regulations – effectively stifling innovation in the EU.
For example, creators of online games, which are not subject to any formal regulations anywhere else in the world, could easily be tempted to move out of Europe to avoid regulations there.
“The worst case scenario is that Europe will miss out on significant numbers of jobs and economic growth as companies move to the US and the Far East,” said Suter.
Concerns shared widely
Ofcom’s concerns about Reding’s proposals are now more widely shared, Suter said.
“Six months ago, we were worried that we were the only ones who seemed concerned by this issue of scope,” said Suter.
“Other countries seemed more concerned with other issues such as protecting European content quotas or whether or not to allow product placement.”
“But we believe that there is now a growing consensus, in the council [of EU ministers] and the European parliament, that the issue of scope needs to be dealt with as the top priority because of the real risk to innovation and growth.”
“MEPs are beginning to understand that all the other issues covered by the directive will become almost an irrelevance if this issue of what is or is not affected is not cleared up,” said Suter.
There is also growing support for the UK’s stance among other member states, helped by impetus from the Finnish EU presidency, which has given more importance to the dossier than its predecessor Austria.
“There is even a growing understanding that some kinds of audiovisual content can best be regulated by the industry themselves – which is very much our approach – even among those countries that have traditionally shunned self regulation.”
Self regulation works
Suter said that there were many examples of self-regulation that showed that the EU industry was taking such issues seriously – and that this had helped persuade sceptics that the commission’s heavy-handed approach was not necessarily the best way to proceed.
“There was perhaps a fear that no-one was regulating things such as mobile multimedia or online television, and that the EU had to act to protect consumers.”
“But these services depend on the goodwill of their users for survival, so they have to respond to consumer demands for safe and controlled content.”
Parliament will vote on the proposals in early December, but Ofcom is hopeful of progress before then, at November’s meeting of EU culture ministers.
“The member states won’t be able to take an official position until after parliament’s vote, but we hope to reach an agreement on where everyone wants to be, and on how we can get there,” Suter said.
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