OPINION OF ADVOCATE GENERAL

Poiares Maduro

delivered on 25 October 2007 ( )

Case C‑250/06

United Pan-Europe Communications Belgium SA

Coditel Brabant SA

Société Intercommunale pour la Diffusion de la Télévision (Brutele)

Wolu TV ASBL

v

État Belge

(Reference for a preliminary ruling from the Conseil d’État (Belgium))





1. The Court of Justice is asked to give a ruling in order to enable the Conseil d’État (Council of State) (Belgium) to assess the compatibility with Community law of national measures imposing must-carry obligations on operators of cable distribution networks in the region of Brussels-Capital. Although the reference for a preliminary ruling relates to competition law and freedom to provide services, I shall, for reasons that I shall set out below, address the problems raised by the referring court mainly in the light of Article 49 EC.

I – Facts, national legal framework and reference for a preliminary ruling

2. The applicants in the main proceedings are cable operators. Through their networks they distribute television channels in the bilingual region of Brussels-Capital. They have lodged an action before the referring court for the annulment of two orders issued by the Minister for Economic Affairs and Scientific Research on 17 January 2001 and 24 January 2002 respectively. Both orders are based on the Law of 30 March 1995 concerning the distribution networks for broadcasting and the exercise of broadcasting activities in the bilingual region of Brussels-Capital (‘the Broadcasting Law’).

3. Article 13 of the Broadcasting Law outlines a must-carry obligation for cable operators in the region of Brussels-Capital. It provides:

‘Cable operators who have a permit to operate a distribution network for broadcasts in the bilingual region of Brussels-Capital must transmit simultaneously and in their entirety the following TV programmes:

– television programmes broadcast by the public service broadcasters falling under the powers of the French Community and those falling under the powers of the Flemish Community;

– television programmes broadcast by any other broadcasters of the French or Flemish Communities, as designated by the competent minister.’

4. The Ministerial Order of 17 January 2001 sets out the reasons for the must-carry rules and grants eight broadcasters must-carry status. Its wording is as follows:

‘Whereas the must-carry regime is part of an audiovisual policy designed to enable television viewers to have access to both public service broadcasters and private broadcasters which assume public service obligations;

Whereas the aim of the must-carry regime is to safeguard the pluralistic and cultural range of programmes available on television distribution networks and to ensure that all television viewers have access to that pluralism;

Whereas this regime is unquestionably justified in the public interest;

Whereas the choice of private stations enjoying must-carry status has been made in the interest of harmonising the audiovisual landscape in Belgium;

Whereas the French Community and the Flemish Community have been consulted;

Whereas must-carry status should be granted to designated broadcasting organisations in return for significant obligations being imposed and to which they have agreed;

Whereas certain designated broadcasting organisations are entrusted with a public service task;

Whereas must-carry status must be conferred on asbl Télé Bruxelles and vzw TV Brussel with a view to promoting the development of local television, broadcasting local news aimed at the local public;

Whereas the consequence of withdrawing must-carry status would be to jeopardise the very existence of those television broadcasting organisations which could not bear the high costs of distribution,

It is hereby ordered:

Article 1

A distributor which is authorised to operate a television distribution network in the bilingual region of Brussels-Capital is required to transmit, simultaneously and in their entirety, the television programmes of the following broadcasters:

1. Vlaamse Media Maatschappij n.v.

2. TV Brussel v.z.w.

3. Belgian business television n.v.

4. Media ad infinitum n.v.

5. TVi s.a.

6. A.s.b.l. Télé Bruxelles

7. Canal+ Belgique s.a.

8. Satellimages s.a.

… ’

5. The order of 24 January 2002 amends the order of 17 January 2001 and grants must-carry status to two more broadcasters: Event TV Vlaanderen NV and YTV SA. I shall refer to the orders of 17 January 2001 and 24 January 2002 collectively as ‘the contested measures’.

6. The applicants have argued before the Conseil d’État that the award of must-carry status to certain television broadcasters constitutes a grant of special rights within the meaning of Article 86 EC, which is likely to distort competition in breach of Articles 3(1)(g), 10, 82 and 86 EC. Furthermore, the applicants have argued that the contested measures restrict the freedom to provide services by reducing the number of available channels and by exempting broadcasters with must carry-status from negotiations with the cable operators. According to the applicants, this amounts to a breach of Article 49 EC.

7. By order of 17 May 2006 the Conseil d’État referred the following questions to the Court of Justice:

‘(1) Must the obligation imposed on undertakings which distribute television programmes by cable to distribute certain pre-determined programmes be interpreted as conferring on the programmes’ authors a “special right” within the meaning of Article 86 EC?

(2) If the first question is to be answered in the affirmative, must the rules referred to at the end of Article 86(1) EC (namely “the rules contained in this Treaty, in particular ... those rules provided for in Articles 12 and Articles 81 to 89”) be interpreted as not permitting Member States to require undertakings which distribute television programmes by cable to distribute certain television programmes by private broadcasting organisations, but “falling under” (within the meaning of the Belgian Law of 30 March 1995 concerning the distribution networks for broadcasting and the exercise of broadcasting activities in the bilingual region of Brussels-Capital) specified public powers of that State, with the result that the number of programmes coming from other Member States or non-members of the European Union and of organisations not falling under those public powers has fallen by the number of programmes covered by the “must-carry” obligation?

(3) Must Article 49 EC be interpreted as meaning that a prohibited barrier to the freedom to provide services exists from the time a measure taken by a Member State, in the present case the obligation to retransmit television programmes over cable distribution networks, is liable to impede directly or indirectly, actually or potentially, the provision of services from another Member State to recipients of those services in the first Member State, which will be the case where, on account of that measure, the service provider finds itself in an unfavourable position when negotiating for access to those networks?

(4) Must Article 49 EC be interpreted as meaning that a prohibited barrier to the freedom to provide services exists because a measure taken by a Member State, in the present case the obligation to retransmit television programmes over cable distribution networks, is granted only to undertakings established in that Member State in the majority of cases, owing to the place of establishment of those benefiting from the measure or the fact that they have some other link to that Member State – while there is no justification for such a barrier based on overriding reasons of public interest in compliance with the principle of proportionality?’

II – Assessment

A – The third and fourth questions

8. I shall first address the third and fourth questions raised by the referring court. These questions essentially ask whether national measures, such as the one at issue in the main proceedings, which impose on cable operators a must-carry obligation in respect of certain broadcasters, restrict the freedom to provide services and, if so, whether such measures are none the less compatible with Community law.

9. The services at issue – the transmission of television signals by cable – clearly come within the ambit of the notion of ‘services’ within the meaning of Article 49 EC. ( ) Broadcasters and cable operators have to work together in order to provide these services. In this context, they can rely on Article 49 EC to challenge national measures that treat the provision of services on a purely domestic level more favourably than the provision of services on an intra-Community level. ( ) Such measures can be upheld only if they are suitable and necessary for the pursuit of a legitimate public interest and if the disparate impact on the domestic provision of services and on the intra-Community provision of services is proportionate to objective differences between those services. ( )

Whether a restriction exists

10. A must‑carry policy such as the one at issue in the present case facilitates the distribution of the channels of broadcasters who have must‑carry status, but it also works to the detriment of broadcasters who have not been granted that status. It is common ground that the cable television distribution networks under discussion have limited bandwidth. Thus, by allocating a number of channels to broadcasters with must‑carry status, the total amount of available channels on the networks is reduced accordingly. It appears from the submissions made to this Court that the analogue distribution networks at issue in the present case have a capacity of approximately 40 channels, of which approximately 20 have to be reserved for the channels of broadcasters with must‑carry status. As a result, cable operators may not be able to distribute certain channels which they would have distributed, were it not for the must‑carry rules. By way of example, the applicants in the main proceedings have asserted that the must‑carry rules have led Coditel to remove the television channels Arte, RAI Uno and La Cinquième from its analogue network. Essentially, the beneficiaries of must‑carry status have a competitive advantage, since they do not have to negotiate with cable operators and compete with other broadcasters in order to secure the distribution of their channels via cable television distribution networks.

11. It is not entirely clear from the order for reference whether Article 13 of the Broadcasting Law requires that broadcasters have to be established in Belgium in order to be eligible for must‑carry status. Although the Belgian Government has argued that the award of must‑carry status is not necessarily limited to broadcasters based in Belgium, the beneficiaries mentioned in the contested measures are all domestic broadcasters. Moreover, at the hearing, the Belgian Government indicated that the fact that one of these broadcasters had recently changed its place of establishment to Luxembourg would be taken into account in the forthcoming evaluation of its must‑carry status, even though the contents of its programmes had not changed. In any event, since the must‑carry policy aims, in the words of the Belgian Government, to ‘guarantee that Belgian citizens [have] access to local and national information and to their cultural heritage’, foreign broadcasters are less likely than domestic broadcasters to obtain must‑carry status. In practice, therefore, must‑carry rules such as those at issue in the present proceedings render access to television distribution networks more difficult for broadcasters based in other Member States than for domestic broadcasters. Even if they do not expressly require establishment within the Member State, such rules effectively treat the provision of purely domestic broadcasting services more favourably than the provision of cross‑border broadcasting services. For that reason, they constitute a restriction on the freedom to provide services.

Whether the restriction is justified

12. The Belgian Government has emphasised that the aim of the must‑carry policy is to safeguard the pluralistic and cultural character of programmes transmitted through television distribution networks in the region of Brussels‑Capital and to ensure that all television viewers in that region can benefit from a pluralistic and diverse range of television programmes. The Court has already held that an audiovisual policy which is intended to establish a pluralist broadcasting system that aims to safeguard the freedom of expression and the different social, cultural, religious, philosophical or linguistic components in society, is indeed capable of justifying a restriction on the freedom to provide services. ( ) However, in order to be permissible under Article 49 EC, the national measures at issue must, first and foremost, be an appropriate means of ensuring that the interest of securing pluralism is attained. ( )

13. It appears to me that the must‑carry policy presently at issue has to be understood, to a large extent, against the specific background that Brussels‑Capital is a bilingual region. Within this region, each cable operator covers an area, consisting of several municipalities, in which it is the sole distributor of analogue cable television. The must‑carry rules can be applied to ensure that viewers in each municipality have access to channels that have a linguistic and cultural connection with the French Community, as well as to channels that have a linguistic and cultural connection with the Flemish Community. In such a setting, must‑carry rules constitute a suitable means of ensuring that television viewers in a particular region have access, in their own language, to local and national information and to programmes that foster their cultural heritage.

14. A must‑carry policy adopted for this purpose inevitably favours broadcasters whose programmes have a special degree of cultural proximity to the viewers in the region concerned. However, while the Treaty does not prohibit the adoption of measures that protect and promote a Member State’s national cultural and linguistic heritage, such measures must not in any circumstances be disproportionate in relation to the aim pursued and the manner in which they are applied must not bring about arbitrary discrimination against service providers established in other Member States. In other words, a policy for the promotion of national cultural and linguistic heritage does not give a Member State free rein to adopt measures which grant a competitive advantage to domestic economic operators. ( )

15. In the framework of the preliminary reference procedure, the final assessment of proportionality is often left to the referring court. ( ) None the less, it is important for the Court of Justice to draw attention to particular enquiries the referring court might need to make in order to exercise the review of proportionality with which it is entrusted. In the present case, there are, in my view, three aspects the referring court must verify in particular.

16. First, the referring court should make sure that, insofar as the award of must‑carry status is conditional on requirements that broadcasters established in other Member States are less likely to fulfil than domestic broadcasters, these requirements are indeed necessary for the purpose of safeguarding pluralism and access to local and national information. ( ) Most importantly, as the ruling in VT4 exemplifies, a broadcaster may very well provide television programmes, including news programmes, of which the contents are tailored to the public in one Member State, while being established in another Member State. ( ) The referring court must therefore make certain that, in practice, the fact that a broadcaster is established in Belgium is not a relevant factor as such for the award of must‑carry status.

17. Second, the referring court should verify whether, in the light of the total number of available channels, the number of channels that has to be reserved for broadcasters with must‑carry status does not manifestly exceed the number of channels necessary in order to achieve the aim of safeguarding pluralism and access to local and national information. In this context, it is incumbent upon the referring court to make sure that must‑carry status is not granted unreservedly in respect of all channels of a particular broadcaster, but that it is limited to those channels that indeed contribute to that aim.

18. Third, the referring court should establish whether basic procedural safeguards are in place to prevent the award of must‑carry status resulting in arbitrary discrimination. When a Member State awards must‑carry status to a number of broadcasters, it must do so pursuant to transparent and non‑discriminatory procedures, on the basis of clearly defined criteria that can be known in advance.

19. These three aspects also reverberate through Directive 2002/22/EC, ( ) which the Member States were under a duty to implement by 25 July 2003. Article 31(1) of that directive, which essentially expresses principles that flow from the Treaty, provides that ‘Member States may impose reasonable “must-carry” obligations’. It goes on to stipulate that such obligations ‘shall only be imposed where they are necessary to meet clearly defined general interest objectives and shall be proportionate and transparent’ and ‘shall be subject to periodical review’.

20. Thus, Article 49 EC does not preclude national measures which impose a must‑carry obligation on cable operators in a particular region in order to ensure that viewers in that region have access to local and national information and to programmes that foster their cultural heritage, provided that such measures are proportionate in relation to the aim pursued and that the manner in which they are applied does not bring about arbitrary discrimination against service providers established in other Member States.

B – The first and second questions

21. I do not propose an answer to the first and second questions. By these questions, the referring court asks whether must‑carry status must be regarded as a ‘special right’ within the meaning of Article 86 EC and, if so, whether that provision, read in conjunction with other Treaty provisions, precludes the award of must‑carry status. The applicants in the main proceedings have argued that the must‑carry rules distort competition between operators of cable distribution networks and operators of other types of distribution networks. They have also argued that, by awarding must‑carry status to certain undertakings, the Belgian State effectively places these undertakings in a dominant position which they are liable to abuse.

22. The order for reference, however, does not contain any indication regarding, in particular, the definition of the relevant market, the calculation of the market shares held by the various undertakings operating on that market, and the supposed abuse of a dominant position. In those circumstances, the questions of the referring court concerning the Treaty rules on competition must be held to be inadmissible. ( )

III – Conclusion

23. In light of the foregoing considerations, I suggest that the Court give the following answer to the questions referred by the Conseil d’État:

Article 49 EC does not preclude national measures which impose a must‑carry obligation on cable operators in a particular region with the aim of ensuring that viewers in that region have access to local and national information and to programmes that foster their cultural heritage, provided that such measures are proportionate in relation to the aim pursued and that the manner in which they are applied does not bring about arbitrary discrimination against service providers established in other Member States.

It is for the referring court to establish whether the measures in question comply with the principle of proportionality. In particular, it is incumbent upon the referring court to verify that:

– in so far as the award of must‑carry status is conditional on requirements that broadcasters established in other Member States are less likely to fulfil than domestic broadcasters, these requirements are necessary in order to achieve the abovementioned aim;

– the number of channels that has to be reserved for broadcasters with must‑carry status does not manifestly exceed the number of channels necessary in order to achieve that aim;

– the award of must‑carry status takes place pursuant to transparent and non‑discriminatory procedures, on the basis of clearly defined criteria that can be known in advance.