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French broadcasting authority proposes cultural exception to net neutrality

France’s broadcasting and telecommunications regulatory authorities recently delivered to the French government their recommendations in connection with the future reform of audiovisual and telecom regulation in France.  The reports address the controversial question of whether the two authorities should merge into a single authority, similar to OFCOM in the United Kingdom.  What follows is an English version of an article published in the French media journal “Edition Multimédia.” 

The broadcasting authority’s (CSA’s) report is a reminder of the complexity of audiovisual regulation in France.  The Conseil Supérieur de l’Audiovisuel (CSA) must apply a dozen different principles that go from assuring the plurality of opinions to the protection of motion picture exhibitors and local newspapers.  In contrast to these cultural objectives, the objectives pursued by the telecommunications regulator ARCEP are based on competition law and economic efficiency principles: competition between services and networks, efficient investment, development of broadband in rural areas, efficient management of numbering and frequency resources.  These regulatory silos are under pressure because distinctions between linear and non-linear programs, audiovisual services and telecommunication services, publisher, distributor and hosting provider are disappearing.  The CSA recommends that France’s audiovisual regulations be revised to take into account the new over-the-top (OTT) players.

The CSA’s and ARCEP’s reports highlight the existence of two kinds of regulation in France that in some cases conflict: economic regulation applied by the ARCEP, and cultural regulation applied by the CSA.  The CSA does not recommend a complete merger between the ARCEP and the CSA because of fears that the merged regulator would emphasize economic regulation at the expense of cultural regulation.  If there were a merger, the CSA recommends that there be two separate regulatory boards:  one board would be in charge of questions linked to the plurality of opinions, protection of youth, protection of the French language and culture.  The other board would deal with economic questions such as access to radio frequencies, access to networks, pricing of services within a multiplex or bouquet of channels, and disputes relating to the numbering of programs.

Both authorities agree that a merger between them would permit a better regulation of radio frequencies, although the CSA cautions against a “purely economic” approach to spectrum policy.  The CSA cites a recent super Wi-Fi experiment using vacant television spectrum as an example of increased cooperation between the two regulators.  Having the audiovisual and telecom regulator under the same roof would facilitate cooperative uses of spectrum.

France’s two regulatory authorities also believe that closer cooperation between them would help develop a coherent regulatory framework to deal with over-the-top (OTT) service providers who currently fall outside both telecom or audiovisual regulation.  The ARCEP and the CSA both want to regulate OTT players, but for different reasons.  ARCEP wants to find a way to get OTT service providers to contribute more to the development of fiber access networks.  The CSA wants to find a way to get OTT service providers to contribute more to the financing of French audiovisual production.

The CSA makes an audacious proposal to create a cultural exception to net neutrality, which would encourage French Internet access providers to give preferential bandwidth to service providers that contribute financially to audiovisual production in France.  For France’s broadcasting regulator, a positive discrimination of this kind would offset the supplemental burden borne by program providers who choose to accept French regulatory constraints.    The CSA proposal would raise a number of problems, and may not be possible to implement legally.  Under the European Audiovisual Media Services Directive, France may not discriminate against a program provider duly authorized in another European Member State, even if that other Member State applies a lighter form of audiovisual regulation.  Discrimination in the form of preferential bandwidth would likely violate these European rules.

The real challenge for French audiovisual regulation is that it is more burdensome than audiovisual regulation in certain other European countries. Until now, France was able to apply its heavier form of regulation because major broadcasters needed a licence for over-the-air broadcasting.  In exchange for the right to use broadcasting spectrum in France, the broadcaster must enter into a detailed agreement with the CSA.  The detailed agreement permits the CSA to implement the various cultural objectives contained in the law. Some of the objectives pursued by the CSA are fundamental, such as ensuring that television services reflect a plurality of opinions.  Other rules aim at protecting narrower interests, such as the rule prohibiting the broadcast of  motion pictures on Wednesday evenings, a rule intended to protect motion picture exhibitors.  Thanks to the French government’s control over radio spectrum, lawmakers and the CSA have been able to impose regulatory constraints that go beyond those of their European neighbours.

What will happen when over-the-air broadcasting disappears? Terrestrial over-the-air broadcasting remains significant in France, but it will eventually decrease as viewers migrate to other forms of connected television.  Uptake of connected TV is slow, but it is possible that over-the-air terrestrial broadcasting will one day cease to be a major factor.  In a world where there will be no or negligible over-the-air broadcasting and therefore no detailed agreements with the CSA, the task of regulators will become more difficult.  Major program providers will be tempted to establish their headquarters in other countries of the European Union, as is permitted under the Audiovisual Media Services Directive.  The over-the-air broadcasting license remains the last “hook” through which regulators can apply heavy-handed audiovisual regulation.  If it is no longer possible for regulators to use radio spectrum as a hook for cultural regulation, lawmakers will try to fill the void by creating a form of cultural regulation of other networks.  The CSA’s proposal for a cultural exception to net neutrality is the first step toward an “audiovisualisation” of telecom regulation, a tendency that Eli Noam identified six years ago in his article “When TV regulation will become telecom regulation.”