m COMMISSION OF THE EUROPEAN COMMUNITIES 
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•Ht* C0M(91) 242 final - SYN 350 
Brussels, 9 July 1991 
Proposal for a 
COUNCIL DIRECTIVE 
on the adoption of standards for satellite broadcasting 
of television signals 
(presented by the Commission) 
mm 
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EXPLANATORY MEMORANDUM 
The current situation 
1. Direct broadcasting by satellite of television programmes is currently regulated by 
Council Directive 86/529/EEC of 3 November 1986.1 This lays down the 
obligation to use the MAC/Packet system for broadcasts transmitted from high-
power satellites (BSS satellites). 
2. The text of that directive is the result of a series of transformations of the original 
idea as it had been clearly expressed in the Communication from the Commission 
to the Council of 24 May 1985.2 This aimed to have the MAC/Packet system 
adopted as the exclusive European standard, without any distinction between 
different satellites and avoiding the use, even for a transitional period, of other 
standards in the different Member States. 
3. By contrast, the legal position resulting from the combined application of the 
dispositions contained in articles 1 and 2 of the same Directive, has produced a 
dual regime for satellite broadcasts: one regime regulated by the Directive for 
high-power satellites and another regime, with no restrictions, for the other 
satellites which lie outside the field of application of the Directive. 
1 O J. n° L 311,6 November 1986, p. 28 ff. 
2 COM (85) 264,24 May 1985. 
Th» dual regime has led in turn to a double market. Technological development 
has created favourable conditions for medium-power satellites, which have started 
transmitting using the PAL and Secam standards. 
Substantial investments have been made in the different systems over the same 
period On the one hand, the European industry has invested in the development 
of MAC wkh HDTV as the aim; on the other hand, a good number of 
feroajdeastcra and operators have invested in satellite broadcast»! using 
PXL/Seaan. 
I. Gives the sftaatSo* described above, it has become very difficult for the 
Community to achieve the objective it has set itself - the development of HDTV 
using die European HD-MAC standard, passing through the intermediate step of 
the D2-MAC standard, following the approach of the EUREKA-95 pepiect. This 
afiows a transition to HDTV following the principle of compatibility with existing^ 
systems, a clear advantage for consumers. 
This objective was considered as being of strategic interest for Europe in two 
decisions adopted unanimously by the Council, on 27 April 1989 (89/337/EEC) 
and 7 December 1989 (89/630/EEC).3 
5. The concrete problem posed now is that of working out how to pass from the 
divergent evolution resulting from the 1986 Directive to a convergent evolution. 
» OJ. *0L 142,25 May 19», p. 1 ft; OJ. L3S3, 13 December 1989, p. 30 ff. 
In the present situation, characterized by a double market with seriously differing 
interests, it is not sufficient to draft and to adopt a legislative decision which seeks 
on its own to replace the Directive which expires on 31 December 1991. That is 
certainly a necessary condition, but not a sufficient condition. 
It is necessary in parallel to work out and make a reality of a credible scenario for 
this decade, by means of a firm commitment by all the economic players 
concerned. 
6. This overall strategy can end a period of uncertainty which has had its effect on 
the path towards European HDTV. Furthermore, it will allow the Community to 
carry out its regulatory duty in the area of norms and standards more effectively in 
market terms. 
As stressed in the Communication from the Commission to the Council of 16 
November 1990 on industrial policy in an open and competitive environment,4 
standards promote competitiveness by: 
lowering costs for producers; 
shaping customer preferences for products by their familiarity; 
enabling the emergence of new markets, particularly for developing 
technologies, where they are becoming a pre-condition for industrial 
production or marketing. 
4 COM (90) 556,16 November 1990. 
7. The specific characteristics of the television sector display very strong 
interdependence between the various players. 
On the one hand, the market for TV receivers cannot develop without an 
adequate supply, in both quantitative and qualitative terms, of programmes using 
the new standards, as well as enough hours of transmissions, while on the other 
hand it would not make sense to start up transmissions without the existence of 
enough receivers. Moreover, neither of these two operations can take place unless 
one can count on sufficient satellite capacity. 
8. All the considerations expressed above led the Commission to take the initiative 
of bringing together around a table the different categories of actor, to solicit their 
active participation in the development of an overall strategy. This strategy 
includes both the legal and standards aspects (clear definition of the new regime 
from 1 January 1992, with a guarantee to preserve the rights legitimately acquired 
during the current situation of a dual regime), as well as the aspects more directly 
relating to the area of activity of enterprises (essentially a programme setting out 
dates and figures with the aim of progressively developing a market for television 
in D2-MAC and HD-MAC). 
9. In order to implement the strategy described above, the Commission has 
undertaken consultations of the parties concerned: industry, private and public 
broadcasters, satellite and cable operators, programme producers. Two plenary 
meetings were held on 28 February and 27 March 1991, prepared and followed up 
by many bilateral and multilateral contacts and meetings. 
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The instruments 
10. On the basis of the above considerations, which h•-- "Vom the start enjoyed a wide 
consensus among the operators consulted, the Commission has identified a double 
instrument to reach these objectives. 
This double instrument consists of the combination of the new Directive with a 
"Memorandum of Understanding" (MOU). Under this MOU, the operators 
concerned take on reciprocal commitments in the framework of a coordinated 
action aimed at the development and promotion on the market of equipment and 
services in the D2-MAC standard and with the 16:9 format. 
11. The inseparable link between the Directive and the MOU will be established by 
the insertion into the recitals of the Directive of an explicit reference to the 
existence of the MOU and to its content. 
Additionally, the participation of the Commission in the MOU and the projection 
of incentives from the Community budget will make it possible to ensure 
consistency between the standards-setting dimension, which lies within the 
competence of the Community institutions, and the operational dimension, which 
pertains to the enterprises concerned. 
12. In the course of the many contacts between the parties concerned, major elements 
of consensus have emerged. There is a common desire concerning the basic 
content of the MOU. The specific points which are still open can be resolved 
taking into account the common interest in achieving agreement on such an 
important matter. 
13. The Commission presented the main lines of its strategy to the 
Telecommunications Council on the occasion of its meeting in Luxembourg on 3 
June 1991. Though in the presence of views which were still divergent, the 
Commission was unanimously encouraged to carry on with its approach; stress was 
laid in particular on the great importance of and the intimate association between 
the two instruments - the Directive and the MOU. 
The conditions therefore exist to start the procedure which should lead to the 
adoption of the new Directive by Council before the end of the year 1991, in 
parallel with the formal completion of the MOU. 
The Directive 
14. The draft Directive proposed for examination by the Commission is based on five 
key points: 
a. HD-MAC is defined as the sole European standard for HDTV. This 
objective will be reached by means of an intermediate standard, D2-MAC, 
especially in 16:9 format. 
b. All new services and all new satellites, which become operational after the 
date of implementation of this Directive, must use the D2-MAC standard 
exclusively. 
c. Services in PAL/Secam which are in operation by 3.1 December 1991 may 
continue, without any date being set directly or indirectly for the end of 
their transmission, and notwithstanding the points set out in item b. above. 
The MOU, at the same time, will provide for incentives for the 
simultaneous transmission in D2-MAC of the services in question 
('simulcast'). 
d. Equipment (satellite receivers and TV sets above 52 cm) put on sale in the 
EC from 1 January 1993 onwards, will have the obligation to contain the 
mechanisms necessary to give them the capacity of receiving D2-MAC. 
e. The duration of the Directive will be ten years. The Commission will 
provide an evaluation report every two years, to be sent to the Council and 
the European Parliament. 
The Memorandum of Understanding (MOU) 
15. The MOU forms the indispensable second pillar of the Commission's present 
strategy. It originates from the Council Decision of 27 April 1989 (89/337/EEC)5 
which provides for an action plan in the area of HDTV. 
16. Signature of the MOU is open to all interested parties (industrialists, private and 
public broadcasters, satellite and cable operators) as well as the Commission. The 
MOU will constitute a legally binding agreement for all the parties involved, 
including to this end an arbitration clause to allow its interpretation and a choice 
of jurisdiction in case of disputes. 
17. The MOU is based on five key points: 
a. A coordinated action to promote the D2-MAC standard in 16:9 format 
with a view to the introduction of HDTV. 
b. Reciprocal, quantified and legally binding commitments of the signatories 
laying down, for example, the minimum number of TV sets of each type to 
be produced, the number of hours of programmes to be broadcast, the 
availability of satellites. (This agreement will not in any way include 
5 O J. n° L142,25 May 1989, p. 1 ff. 
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agreements concerning selling prices or market shares and, in any case, it 
is obliged to respect the competition rules laid down in the Treaty.) 
c. A system of incentives, financed notably by the Community, and aiming in 
particular to facilitate 'simulcast' and to support the start of broadcasts in 
D2-MAC. 
d. The creation of a consortium between the signatories, with the 
participation of the Commission realized in the most appropriate way. 
The role of the consortium will be to coordinate the promotional action, to 
administer the Community incentives and to supervise the respect of the 
commitments undertaken by the parties involved. 
e. The duration of the MOU will be five years, renewable. 
Implementation 
18. The Commission aims to achieve, before the end of this year, the adoption of the 
Directive and, in the same context, the signature of the MOU, the text of v.h-«. 
will be communicated to the European Parliament and the Council. 
19. This will make it possible to achieve a double result: on the one hand, it will 
definitively confirm the Community strategy aimed at the introduction of the HD-
MAC standard as a common European standard; on the other hand, it will provide 
the equipment makers, the broadcasters, the satellite and cable operators, the 
programme producers as well as consumers with a reliable basis to guide their 
decisions on the market. 
20. Subsequently, the aspect concerning the financing of the system of incentives will 
be addressed. The Commission envisages the commitment to this purpose of a 
sum of the order of about 100 MECU per year over a five-year period. The 
informal discussions around the MOU have taken this direction. As far as 1992 is 
concerned, the PDB already foresees a sum of this order of magnitude under 
several lines. 
21. In parallel with the reinforcement of the 'broadcasting standards' side of the 
European HDTV strategy, implemented through the joint effect of the MOU and 
the Directive, the development of the programmes side is also a priority both for 
promotion of the 16:9 format and for the effective introduction of HDTV services 
from 1995 onwards. 
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Proposal for a 
COUNCIL DIRECTIVE 
on the adoption of standards for satellite broadcasting 
of television signals 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic Community, 
and in particular Article 100a thereof, 
Having regard to the proposal fro» the Commission, 
In cooperation with the European Parliament, 
Having regard to the opinion of the Economic and Social Committee, 
Whereas Council Directive 86/529/EEC1 made provision for review; 
Whereas the Community, through Council Decision 89/337/EEC2 and Council 
Decision 89/630/EEC3, recognized the strategic importance of High 
Definition Television (HDTV) for the European consumer electronics industry 
and for the European television and film industries, and established the 
strategy framework for the introduction of European HDTV; 
Whereas Council Directive 86/529/EEC, in particular in Article 2, 
established a dual regime by a limitation of the application of the 
Directive to only one type of satellite, and as a consequence a dual market 
appeared with the use of MAC standards in Broadcasting Satellite Service 
(BSS) and mainly PAL and SECAM in Fixed Satellite Service (FSS); 
1 OJ No L 311, 6.11.1986, p. 28. 
2 OJ No L 142, 25.5.1989, p. 1. 
3 OJ No L 363, 13.12.1989, p. 30. 
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Whereas in order to reach Community goals as set out in the Decisions 
mentioned above and in order to contribute to the achievement of a single 
market in satellite broadcasting of television signals as provided for in 
Article 8(a) of the Treaty, it is necessary to undertake steps to create a 
convergence of standards, using in parallel a regulatory instrument, and an 
agreement between major actors in the market; 
Whereas it is in the best interest of European consumers to follow a path 
towards HDTV based on the criteria of compatibility and evolution, in order 
to avoid discontinuities and duplication of investments; 
Whereas HD-MAC has been developed as the European transmission standard for 
HDTV services based on those criteria of compatibility and evolution and 
D2-MAC offers the best available path towards the development of HDTV with 
wide-screen 16 : 9 D2-MAC as the main step in that direction; 
Whereas there is a need to establish common standards for satellite 
transmission as an enabling element for effective free market competition 
taking into account that standards promote competitiveness by lowering 
costs for producers, shaping customer preferences for products by their 
familiarity, and enabling the emergence of new markets, particularly for 
developing technologies, where they are becoming a pre-condition for 
industrial production or marketing*, 
Whereas services established during the period of application of Directive 
86/529/EEC according to its provisions should not be forced to a compulsory 
stop or change; however, incentives may be provided in order to support, in 
addition, the use of MAC standards, in particular through simultaneous 
transmissions ('simulcast'); 
Whereas in the interests of the consumer it is necessary to establish a 
common standard for conditional access systems for D2-MAC and HDTV 
services; 
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Whereas cable TV and Small Mister Antenna TV (SMATV) networks ?ire H 
reieva.it feature i.i the television infrastructure of many Member Stater r> 1 
will bo very important to the future of HDTV services; 
Whereas Decision 89/337/EEC called for an action plan for the Introduction 
of HDTV to be prepared in close coordination at Community level between ths 
Commission, the Member States and the European industry; 
Whereas broadcasters, satellite operators, equipment manufacturers, and 
cable operators are fully committed to the earliest possible introduction 
of 16 : 9 D2-MAC services, in conformity with the objectives set out in 
Decision 89/337/EEC and, accordingly, have declared their intention to 
enter into a Memorandum of Understanding to which the Commission will also 
be a party; 
Whereas the Memorandum of Understanding will set out the obligations of the 
respective parties for the development and promotion of 16 9 D2-MAC 
services in Europe in accordance with the terms and provisions of this 
Directive and will constitute an integral part of the overall strategy for 
the introduction of HDTV; 
Whereas European research efforts must stay in the forefront of all new 
significant developments such as a trend towards digital television 
broadcasting emissions and Europe has to consolidate its research efforts 
through collaboration; 
Whereas in view of the foreseeable technical progress in this sector, 
account should now be taken of any subsequent developments of the existing 
systems and provision made for an eventual review of this Directive; 
Whereas it is in the general interest as well as in the interest of the 
major actors in the market that this Directive should be implemented at the 
earliest possible date, 
HAS ADOPTED THIS DIRECTIVE: 
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ARTICLE 1 
Member States shall take all measures to promote and support the 
introduction and development of advanced satellite broadcasting services 
for television programmes, using the HD-MAC standard for High Definition 
Television transmission and the D2-MAC standard for other transmission in 
the 16 : 9 aspect ratio format. 
ARTICLE 2 
1. For any transmission of a television service in the High Definition 
Television format only the HD-MAC standard may be used. 
2. For any transmission of a 625 line satellite television service 
receivable by viewers using domestic satellite receiving equipment, 
even if such transmissions are intended to be redistributed by cable 
networks, only the D2-MAC standard may be used: 
in respect of any service in 16 : 9 aspect ratio format; 
in respect of any service carried by a satellite using the BSS 
frequency band (11.7 to 12.5 GHz ); 
in respect of any satellite transmission of a service, starting 
after the date of implementation of this Directive, or using a 
satellite brought into operation after the date of 
implementation of this Directive. 
ARTICLE 3 
Satellite services in operation on 31 December 1991 and using D-MAC, PAL or 
SECAM standards, may continue to use the same standard for 625 lines 4:3 
format transmissions after the date of implementation of this Directive, 
notwithstanding the provisions set out in the third indent of Article 2(2). 
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ARTICLE 4 
dumber States sfr&ll take al! measure."- to ensure thzt <-? frrn *! .!*?-;!;..* rv 
1993, ali new television sets with a scroon size grea*^?' than 52cn a'id i!! 
new sateSNt© receivers, for sale within the Community have jnefuded within 
them the necessary means to receive D2-MAC signals. 
ARTICLE 5 
Member States shall take all measures to ensure that 
any new terrestrial redistribution system, or any existing 
terrestrial redistribution system having the necessary technical 
capability, shall be configured in such a way that HD-MAC signals can 
be transmitted through the network from head-end to individual homes: 
in the case of cable TV and SMATV systems channels in the hyperband 
(300-450 MHz) each having 12 MHz bandwidth shall be allocated for 
this purpose; existing terrestrial redistribution systems not having 
the necessary technical capability, shall be configured as indicated 
above when their operators decide on a technical upgrading of the 
network; 
if cable operators decide the redistribution by cable of programmes 
received by them in the 16 : 9 aspect ratio format and the D2-MAC or 
HD-MAC standard, operators shall redistribute these programmes also 
in the 16 : 9 aspect ratio format and the D2-MAC or HD-MAC standard. 
ARTICLE 6 
In the case of all services using the D2-MAC standard, which are encrypted 
and employ a conditional access system, Member States shall take all the 
necessary measures to ensure that only a conditional access system fully 
compatible with D2-MAC and standardized as such by a European 
standardization organization by the date of implementation of this 
Direct ive, is used. 
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ARTICLE 7 
This Directive shall apply until 31 December 2001. Every two years, the 
Commission shall submit to the European Parliament, to the Council and to 
the Economic and Social Committee a report on the application of this 
Directive and, if necessary, make further proposals to adapt it to 
developments in the field of satellite television broadcasting. 
ARTICLE 8 
1. Member States shall bring into force the laws, regulations and 
administrative provisions necessary to comply with this Directive no 
later than three months after the date of its notification. They 
shall forthwith inform the Commission thereof. 
When Member States adopt these provisions, these shall contain a 
reference to this Directive or shall be accompanied by such reference 
at the time of their official publication. The procedure for such 
reference shall be adopted by Member States. 
2. Member States shall communicate to the Commission the texts of the 
provisions of national law which they adopt in the field covered by 
this Direct ive. 
ARTICLE 9 
This Directive is addressed to the Member States. 
Done at Brussels, For the Council 
The President 
ISSN 0254-1 
CQM(91)242fïf I 
DOCUMENT 
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Catalogue number : CB-CO-91-3Q4-EN-C 
ISBN 92-77-74180-5 
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