Trying to Explain the Debate around Television in the Digital Single Market

Frequent Netopia-readers may have noticed a sudden peak in guest opinions recently. 21 MEPs published a joint statement. A group of film producers wrote an open letter to the Estonian presidency. I interviewed one of the signatories of this letter.

Let me try to explain why this comes now (to myself as much as you, dear reader!): it all is to do with the copyright reform policies that have made their way through the complex system of law-making in Europe and now arrive to votes and negotiations. In this particular case, it was the so-called Satellite and Cable-directive which allows exceptions from territorial license contracts for satellite and cable television broadcasters (whose signals may not always follow country borders exactly, so it’s a compromise of legal contracts and the limits of this particular technology). The principle of copyright is that it belongs to the creator, who can grant licenses to others to use the copyright content on agreed terms (for example, one country but not another). Now, the European Commission sees territorial licensing as an obstacle for the Digital Single Market and has proposed various restrictions to territorial licensing, sometimes successfully as with the Portability Regulation which allows subscribers to bring their content services when they travel to other member states. However, the creative industries see many of the proposed restrictions as violations of their freedom of contract and the exclusivity of the creator.

The 21 MEPs made two points: firstly, while territories are often discussed as a business interest of the creative industry, there is also a strong demand from consumers for localized content and adjustment to local purchasing power (and currency) for example. Ergo the consumers and businesses have the same interest in this case. Secondly, that the Commission should not attempt to influence the decision-making process of the other institutions, as several sources say is the case in this issue. The film producers made a different point: because territorial licensing is available in all other parts of the world, banning it in Europe would give European films a disadvantage in the global perspective.

Now dear reader, maybe you think “Interesting points, but why would expanding this cable TV-regulation jeopardize territorial licensing?” Good question! That is because the internet is a different technology than satellite and cable, and not in nature restricted to a certain area (those who can pick up the satellite signal or are connected to the cable network). Quite the opposite, the internet is characterized by its de-centralised, open-ended structure. Thus making a broadcast available on the internet, means making it available to the whole internet (unless its restricted, which is precisely what the Commission wants to ban).

Now, maybe you think “okay, but if all these smart people think it’s is such a bad idea, why is the EU Commission pushing for it?”. Good question! That is because it sees the so-called Digital Single Market as the logical next step for the European Union. The Single Market is great, so why not make a digital version? Of course, no one can argue with that. It is a great idea! Except what is a digital single market, really? Would you agree that the United States is a digital single market? I think so, and it’s often mentioned as a benchmark for the European digital single market. Except, in the US there are all kinds of territorial licenses for television, only not around the borders of states or counties, but any kind of territory. It’s possible to license content for television broadcast in one city for example by a local TV-station. I’m told the competition authorities in the US think this licensing flexibility is a good thing. That it increases competition!

What if Europe’s question is not about borders, but audiences? What if the digital single market can be achieved, not by banning certain types of licensing contracts, but by allowing all kinds of licensing contracts: global, pan-European, national, regional, local and everything in between? I know, I know: it’s preposterous of me to think that I can come up with a better solution than all the smart people who work on this all the time. But the great news is that this very flexible licensing model is possible without any intervention at all. No need for votes or trialogue negotiations. It works in the current system! There’s no need to fix it, because it’s not broken. Instead, the policy around the digital single market can focus on other things: digital skills, payment systems, access to risk capital, anti-trust, cyber-security. Of course, a lot of smart people already work on these issues. That’s great, because a lot of those need a lot of fixing!

What happens now, you ask? Good question! There was a vote in European Parliament earlier this week that protects territorial licensing, with the exception of “news and current affairs” broadcasts. The Council of Member States will decide their final position maybe already this week. I’m told they’re leaning the same way as the Parliament. After that, the so-called trialogue negotiations will begin, where the three institutions try to come to an agreement. Stay tuned as this unfolds.

Dear reader, I hope this post helps explain this issue. Thanks for reading all the way through. If you’re still confused, at least I hope you’re confused on a higher level.

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