Proposal for a COUNCIL DECISION ON AN ACTION PLAN FOR THE INTRODUCTION OF ADVANCED TELEVISION SERVICES IN EUROPE
Date: 1992-05-05
Institutions: European Commission
Subjects: European standard, action programme, electronics industry, financing plan, high-definition television

COMMISSION OF THE EUROPEAN  COMMUNITIES 

COM(92) 154 final 

Brussels, 5 May 1992 

Proposal  for a 

COUNCIL DECISION 

ON AN ACTION PLAN FOR THE INTRODUCTION 
OF ADVANCED TELEVISION SERVICES 
IN EUROPE 

(presented by the Commission) 

CONTENTS 

A.  Explanatory Memorandum 

1) 

2) 

3) 

Background and Strategic Context. 

The aim of the Proposal for a Decision and the Approach  taken. 

Conclusion. 

B.  Draft  Proposal  for  a  Council  Decision  on  an  Action  Plan  for  the  Introduction  of 

Advanced Television Services in Europe 

C.  Annex - Action Plan Objective and Summary 

1) 

Objective 

2) 

3) 

4) 

5) 

6) 

7) 

Approach  adopted 

Outline  Description  of  the  Service  Chain  and  Preliminary  Identification  of 
Potential Sources of Costs 

Targets to be Achieved 

The Funding Approach to be Adopted 

Indicative Internal Allocation of Funds 

Principles and Criteria for  Implementation 

A.  EXPLANATORY  MEMORANDUM 

- 2-

1.  BACKGROUND AND STRATEGIC  CONTEXT 

On the  lOth February  1991, the Council  unanimously  adopted  a Common  Position  on 
a  Council  Directive  on  Standards  for  Satellite  Broadcasting  of  Television  Signals  <*> 
following a proposal from the Commission. 

The main points of the Directive may be summarized as follows: 

i) 

ii) 

iii) 

iv) 

only HD-MAC may be used for HDTV  transmissions which are not fully digital; 

only D2-MAC may be used for non-fully digital 625 line television  transmissions 
by satellite in the  16:9 format; 

all  16:9 television  receivers  must  incorporate  a  D2-MAC  decoder  and  all  other 
television receiving equipment  must  incorporate at least  a standardized  socket; 

provision  is also made for the obligatory use of D2-MAC by 4:3 services starting 
after  1  January  1995,  subject  to  the  adoption  by  Council  of  a  Commission 
proposal on financial  support for such services. 

This  Directive,  which  sets  the  regulatory  environment  of  standards  for  satellite 
television  broadcasting  in  Europe  is  one  part  of  a  two  pronged  approach  by  the 
Community  to  encourage  the  orderly  transition  in  Europe  to  advanced  television 
services including HDTV. 

The  other  element  is  an  agreement,  enshrined  in  a  Memorandum  of  Understanding 
(MOU)  between  the involved  economic  actors  in  this  field  - broadcasters,  equipment 
makers and cable and satellite  operators  - with a view  to  the  provision  in  Europe  of a 
wide range of advanced television services in the  D2-MAC  standard, particularly  in its 
16:9 format,  in the period to  1996. 

The  strategic context  is set  by the  recognition  by the  Community  that  it  is  in  the  best 
interests  of  the  European  consumers  to  follow  a  path  toward  HDTV  based  on  the 
criteria  of compatibility and evolution,  together with the  recognition  that  HD-MAC  is 
the  appropriate  HDTV  transmission  standard  in this regard  and  that  D2-MAC  offers 
the best  available path towards the  development  of  HDTV,  with wide screen  16:9 D2-
MAC as the main step in this direction. 

During its  meeting of  18 and  19 December  1991, the  Council  of  Telecommunications 
Ministers,  in giving its  assent  to  the  common  position  on  the  Directive,  expressed  its 
conviction  that  only a global  strategy  including  accompanying  measures  together  with 
appropriate financial  means, will assure the success of European  advanced  television. 

In this connection  the Council took  note  of  the intention  of  the Commission  to submit 
to  it  and  to  the  European  Parliament,  at  the  latest  by  30th  of  April  1992,  a  set  of 
measures,  financial  and otherwise,  on the  basis of  an appropriate  article  of  the  Treaty 
in order to attain the objectives announced  in articles 2 and 8 of  the  Directive. 

<»  OJ. 

- 3-

At the same meeting the Council  invited the Commission to intensify  its negotiations 
in  relation  to  the  MOU with  a view  to  having  its signature  simultaneously  with  the 
final adoption of the Directive. 

Also, at the above meeting the Council invited the Commission to take, without delay, 
the necessary  measures to  facilitate  the  immediate  implementation  of  the  numerous 
initiatives  which  had  already  been  announced  for  the  satellite  broadcasting  of 
television programmes using D2-MAC 16:9. 

The European Parliament, in its deliberations on the proposal of the Commission for 
the Directive also expressed its clear conviction that accompanying financial  measures 
would be required for the successful achievement of the objective. 

This present document incorporates a proposal for such a financial measure. 

2.  THE  AIM  OF  THE  PROPOSAL  FOR  A  DECISION  AND  THE  APPROACH 

TAKEN 

Exhaustive  consultations  over  an  extended  period  of  time  with  the  concerned 
economic actors: the broadcasters, the equipment  makers, the operators of cable and 
satellite infrastructure, and the programme makers, have identified  a clear interest by 
many  parties  to  move  at  the  earliest  time  to  the  provision  of  advanced  television 
services by satellite and cable in Europe using the D2-MAC standard, particularly in 
its 16:9 format, and the HD-MAC standard. 

The  television  service  chain  begins  with  origination  and  ends  with  reception  by 
consumers  on  their receivers.  It is  a complicated  chain  involving  many creative  and 
technical  operations  and  several  different  industries.  The  approach  must  treat  the 
whole  chain  of  operations,  not  individual  functions  out  of  context,  because  the 
consumer  commits  to the  outcome  of  the whole  process,  rather  than  any  individual 
aspect. This has led to the adoption of a service perspective, since services embody the 
sum  of  operations.  A  television  service  consists  of  a  schedule  of  individual 
programmes under the editorial control of a broadcaster. 

2.1  Additional Costs 

The above mentioned consultations have identified the additional costs to the parties 
which would be involved in the provision of these advanced services particularly in the 
start-up phase. These costs include: 

i) 

Costs  of  Broadcaster's  Operations  including  Studio  Upgrading  and  Satellite 
Transmission. 

Broadcasters, who have not  already done so, may need  to  upgrade their studio 
equipment to the requirements of the new service. 

Many operators, for commercial reasons, and in order to continue to serve their 
existing customers who have equipment working on another standard, will wish, 
at least  for an initial  period,  to simulcast  the advanced  service  in parallel  with 
the  conventional  service.  This  will  involve  additional  costs  associated  with 
satellite  transmission.  Other  sources  of  additional  costs  include  D2-MAC 
encoding  and  encryption,  conditional  access  and  subscriber  management  for 
subscription services. 

ii) 

Costs for  Cable  Redistribution. 

Operators  of  cable  TV  networks  may  wish  to  have  the  capability  to  offer 
advanced  television  services  to  their  customers.  In  order  for  cable  systems  to 
use  satellite  received  signals  in  this  connection,  the  cable  head-end  must  have 
additional  equipment  (per  channel)  which  is  capable  of  receiving  the  MAC 
satellite  signal  and  transforming 
it  in  such  a  way  as  to  be  suitable  for 
the  cable  network.  Special  facilities  for  decrypting, 
through 
transmission 
encrypting conditional  access and  subscriber  management  may  also  be  required 
at  the  head-end.  In  addition  certain  upgrading  of  the  cable  network  itself  may 
be  necessary  in  order  to  allow  the  16:9  D2-MAC  signals  to  be  distributed  to 
viewers. 

There  may  therefore  be  additional  capital  costs  for  cable  operators  wishing  to 
offer  the advanced  television  services to their  subscribers. 

iii)  Cost  of Programme  Production  and  Conversion. 

The  advanced  services  are  capable  of  offering  enhanced  picture  and  sound 
quality compared  with conventional  services as well as  the  new wide-screen  16:9 
format.  In  order  to  ensure  that  the  full  potential  of  the  new  system  is  realized 
therefore  the  advanced  services will require  to  be  fed  with  programme  material 
of a  higher  quality  in both  picture  and  sound  and  in  the  new wide screen  formal. 
In  order  to  achieve  this  higher  quality  both  for  D2-MAC  but  more  particularly 
for  HD-MAC  transmissions,  both  in-house  and  independent  production  will 
have  to  progressively  upgrade,  technically,  over  the  coming  decade,  and 
programme production  techniques will have to  develop  to  take  full  advantage  of 
the potential  of the new technical  possibilities. 

Programme  makers  and  as  a  consequence  broadcasters  will  therefore  face 
increased  costs,  at  least  in  the  early  stages,  for  original  programme  production 
or  the conversion  of existing material from  another  format. 

2.2  Proposed  Approach 

The  conclusion  reached,  following  the  above  mentioned  consultations,  is  that  (Aim  to 
the  fact  that  the  European  television  service provision  industry  is suffering  significant 
financial  pressures  at  the  present  time,  the  transition  from  conventional  to  advanced 
services  is  likely  to  happen  only  slowly  in  the  absence  of  a  measure  of  financial 
incentive to cushion  the start-up  costs. 

The  proposal  now  made  therefore  in  to  adopt  an  Action  Plan  covering  the  period  up 
to  the  end  of  1996  and  having  the  objective  of  accelerating  the  development  of  the 
market  for  advanced  television  services  by  satellite  and  cable  based  on  the  D2-MAC 
standard,  particularly  in  its  16:9  format  and  the  HD-MAC  standard.  Community 
funds,  in  the  amount  of  850  million  ECU,  would  be  made  available  to  provide 
incentives for  the achievement  of this  objective. 

The  funds  would  be  directed  towards  covering  part  of  the  costs  identified  above, 
namely: 

i) 

costs  relating  to  broadcasters's  operations  including  studio  upgrading  and 
satellite  transmission 

ii) 

costs relating to cable  redistribution 

iii) 

costs  relating to programme  production  and  conversion,  and 

- 5-

The allocation of these funds will be governed by the principle of double degressivity in 
the following sense: 

a) 

b) 

In order to encourage the early start-up of the targeted advanced services, those 
projects starting earliest will receive the greatest levels of funding. 

In  line  with  the  policy  that  Community  funding  is  to  cushion  the  economic 
consequences  in  the  start-up phase,  the  funding  allocated  to  projects  will  be 
progressively reduced each year the incentive is in place. 

The  Commission  will  be  responsible  for  the  execution  of  the  Action  Plan  and  for 
ensuring  that  Community  funds  are  correctly  spent  and  are  directed  effectively  and 
efficiently  towards the stated objective. 

In this connection the Commission will establish close collaboration with the structure 
resulting  from  the  signing  by  the  market  actors  of  the  Memorandum  of 
Understanding. 

A set  of general principles and criteria which must govern the implementation  of the 
Action Plan are included in the Annex to ensure that relevant Community policies are 
followed. 

It has also  been  considered  appropriate  to specify,  in advance,  indicative  targets for 
the impact of Community funds as a guide-line for the implementation. These targets 
which require the achievement by the end of 1996 of: 

i) 

ii) 

iii) 

a  critical  mass  of  satellite  television  services,  using  the  D2-MAC  standard, 
particularly in its 16:9 format, or the HD-MAC standard; 

a significant  and constantly  increasing  number  of  cable  TV  networks carrying 
high quality 16:9 D2-MAC services to their customers; 

a significant  and increasing volume of programming in the  16:9 format and with 
high  technical  quality  both  in  picture  and  sound.  Such  programming  to  be 
broadcast in the above mentioned services; 

are  considered  to  be  achievable  following  the  detailed  consultations  already 
conducted. 

CONCLUSION 

The attached  Decision  aims to prepare  the way for the  Europe-wide  introduction  of 
advanced  television  services  during  the  next five years.  The  proposals  are  based  on 
extensive  dialogue with all  the  relevant  actors  in this field.  The  Council  is  invited  to 
adopt the attached Proposal for a Decision. 

6-

B.  PROPOSAL FOR A  COUNCIL DECISION 
ON AN ACTION PLAN FOR THE INTRODUCTION 
OF ADVANCED TELEVISION SERVICES 
IN EUROPE 

PROPOSAL FOR A 
C O U N C IL  D E C I S I ON 

on an Action Plan for the Introduction 
of Advanced Television Services 
in Europe 

The Council of the European Communities, 

Having  regard  to  the  Treaty  establishing  the  European  Economic  Community  and  in 
particular Article 235 thereof; 

Having regard to the proposal from  the Commission; 

Having regard to the opinion of the European Parliament (*>; 

Having regard to the opinion of the Economic and Social Committee <2>; 

Whereas  the  Community,  through  Council  Decision  89/337/EEC  <3>, Council  Decision 
89/630/EEC  <4> and  Council  Directive  <5> 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  P>  set  a  regulatory  framework  of  standards  for  satellite 
television broadcasting including HDTV. 

Whereas it is in the best interest of European consumers to follow  a path  to HDTV,  based 
on  the  criteria  of  compatibility  and  evolution,  in  order  to  avoid  discontinuities  and 
duplication of investments; 

Whereas HD-MAC, which has been chosen as the European  transmission  standard  for  non 
fully digital HDTV, conforms  to 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  article  8 of  Council  Directive  
  requires  that  that  Directive  be  accompanied  by 
commercial measures based on the signing, by the parties concerned, of a Memorandum  of 
Understanding  (MOU)  coordinating  the  actions  of  the  various  signatories  and  where 

<»  O.J. 

<2>  OJ. 

<3>  O J.  N° L 142,25.5.89, p.  1 

<4>  O J.  N° L 363,13.12.89, p. 30 

<5>  OJ. 

- 8-

appropriate  by  simultaneous  measures  designed  to  support  the  creation  of  a  European 
market for the D2-MAC and HD-MAC standards; 

Whereas,  following  the widest  possible  consultation,  a number  of  economic  actors  in  the 
television  service  provision  market  intend  to  sign  a  Memorandum  of  Understanding  in 
which  they  make  commitments  to  offer  advanced  television  services  throughout  Europe 
using D2-MAC in its 16:9 format; 

Whereas  the  objectives  of  the  strategy  for  the  introduction  of  HDTV  in  Europe  are an 
integral part of the Community audiovisual policy and whereas they must take into account 
other  objectives  of  this  policy  within  the  perspective  of  the  development  of  Europe's 
audiovisual capacity, which comprise  structural objectives such as  the  development  of  the 
independent  production  sector  or the  development  of  production  in countries  or  regions 
with more limited audiovisual capacity; 

Whereas in order to ensure the introduction of European advanced television articles 2 and 
require  a  global  strategy  including  accompaning  measures 
8  of  Council  Directive 
together  with  appropriate  financial  means and  measures  to  encourage  the  production  of 
programmes; 

Whereas financial  incentives  are  initially  required  to  ensure  the  accelerated  development 
of the advanced television  service market in conformity with the strategy  indicated  above, 
by contributing to the reduction of the additional start-up costs involved; 

Whereas it is appropriate to set  targets for the impact of Community funding of the early 
market development of advanced television services; 

Whereas  it  is  appropriate  to  specify  certain  basic  principles  which  must  underlie  the 
implementation of the Action Plan including criteria to be used in the selection of projects; 

Whereas the Treaty does not provide, for the action concerned, powers other than those of 
Article 235; 

HAS DECIDED AS FOLLOWS: 

- 9-

Article 1 

An  Action  Plan  to  ensure  the  accelerated  development  of  the  market  for  advanced 
television  services by satellite  and cable based on the  D2-MAC standard, particularly  in  its 
16:9 format,  and the  HD-MAC  standard,  is adopted  for  a period  commencing  on  the  date 
of adoption of this decision and concluding on 31st December  1996. 

The targets set for the Action  Plan are the achievement  during the period  mentioned  above 
of: 

i)  A  critical  mass  of  satellite  television  services,  using  the  D2-MAC  standard, 

particularly in its  16:9 format, or the HD-MAC standard. 

ii)  A  significant  and  constantly  increasing  number  of  cable  TV  networks  carrying  high 

quality  16:9 D2-MAC services to their customers. 

iii)  A  significant  and increasing volume of  programming  in the  16:9 format  and with  high 
technical  quality both  in picture  and  sound. Such  programming  to  be  broadcast  in  the 
above mentioned  services. 

Community  funds  will  be  directed  towards  the  achievement  of  these  targets  by  means  of 
incentives  covering  parts  of  the  additional  costs  incurred  by  broadcasters,  programme 
makers and cable TV  network operators, in the provision  of the above mentioned  advanced 
television services. 

A  summary  of  the  Action  Plan  and  its  implementation  procedures  is  set  out  in  the  Annex 
which forms an integral part of this Decision. 

Article  2 

1.  The  execution  of  the  Action  Plan  will  be  undertaken  by  the  Commission.  In  this 
connection  the  Commission  will  establish  close  collaboration  with  the  mechanisms 
resulting from  the implementation  of Article 8 of Council  Directive <n. 

2.  Basic  principles  which  must  govern  the  implementation  of  the  Action  Plan  including 
criteria  to  be  used  in  the  selection  of  projects  are  given  in  the  Annex  which  forms  an 
integral part of this  Decision. 

3.  The  Commission  shall  ensure,  by means  of  appropriate  control  mechanisms,  that  the 
Community  funds  are  properly  allocated  and  are  used  to  achieve  Community 
objectives as specified  in this Action  Plan. 

<»  OJ. 

- 10-

Article 3 

An annual report will be submitted by the Commission  to the European  Parliament,  to the 
Council and to the Economic and Social Committee, evaluating the implementation  of the 
Action Plan and the allocation of Community funds. 

A  final  report,  in  the  same  terms,  will  be  submitted  to  the  above  institutions  at  the 
conclusion of the Action Plan. 

Done in Brussels, (date) 

For the Council 

The President 

C.  ANNEX  -  SUMMARY  OF  THE  ACTION  PLAN  AND  ITS  IMPLEMENTATION 

-11 -

PROCEDURES 

1.  OBJECTIVE 

The  objective  of  the  Action  Plan  is  to  ensure  the  accelerated  development  of  the 
market  for  advanced  satellite  and  cable  television  services  in  Europe  using  the  D2-
MAC standard,  particularly  in its  16:9 format,  and  the HD-MAC  standard. 

2.  APPROACH  ADOPTED 

i) 

Accelerated  development  of  the  market  for  advanced  satellite  and  cable 
television  services  requires  that  all  the  elements  necessary  to  bring  those 
services  into  consumers'  or  viewers'  homes  be  in  place.  Television 
is  a 
complicated  medium,  encompassing  and  merging  many  technical  and  creative 
functions,  with  both  and  cultural  and  commercial  outcomes.  Its  functions  are 
controlled  by  different  sectors  within  the  audiovisual,  telecommunications  or 
electronics  industries.  Their  endeavours  form  a  service  chain  stretching  from 
origination  to the receiver  in the  home. 

Consumer  commitment  - whether  of  time  or  financial  resources  -  is  not  to  any 
of  these  individual  functions  or  to  the  industries  that  support  them,  but  to  the 
end  result,  the services that  are  made possible by the chain  of  operations.  These 
will be  of  different  types,  in  the  case  of  a  general  interest  service,  or  of  similar 
type  if  the  service  is  a  specialised,  thematic  one.  They  may  be  funded  in 
different  ways: by licence fee,  advertising or  by  subscription. 

The  approach  for  accelerating  the  development  of  the  market  for  advanced 
satellite  and  cable  television  services  must  therefore  have  a  service  focus.  It 
would  be  misguided  to  adopt  a  piecemeal  approach,  addressing  individual  parts 
of  the  television  service  chain  independently  in  ad  hoc  style.  They  must  all  be 
addressed  within  a service perspective;  this will condition  the  approach  adopted 
in the Action  Plan. 

ii) 

Proposals  will  be  sought  for  offers  to  provide  on  the  market  television  services 
in the D2-MAC standard,  especially its  16:9 format,  or  the  HD-MAC  standard. 

To validate  the  service  approach, proposals  must  include  all  the  elements  in  the 
service  chain  necessary  to  reach  the  consumer.  They  should  embrace  the 
following:  satellite  distribution  means;  cable  distribution  means  (if  necessary); 
access  to  suitable  programme  material  and  receiver  availability  in  the  target 
market.  Proposals  will  therefore  be  integral  service  projects  where  all  these 
aspects have been  taken  into  account. 

It  is  expected  that  each  service  proposal  would  be  presented  by  a  project 
consortium  and  led  by  a  broadcaster,  since  broadcasters  have  editorial  control 
over  services.  Consortia  would  include  some  or  all  of  the  following  actors: 
equipment 
satellite 
manufacturers. 

operators; 

operators; 

television 

network 

cable 

Members  of  a  consortium  would  be  expected  to  have  signed  a  project  contract 
between  themselves  to  provide  the  proposed  service,  subject  to  the  availability 
of  Community  funds.  The  acquisition  or  commissioning  of  programmes  from 

-  12-

sources  independent  of  the  project  broadcaster  will  be  the  object  of  separate 
contracts  between  that  broadcaster  and  the programme  maker  or  rights  holder. 

3.  OUTLINE  DESCRIPTION  OF  THE  SERVICE  CHAIN  AND  PRELIMINARY 

IDENTIFICATION  OF  POTENTIAL  SOURCES  OF  COSTS 

The  introduction  of  advanced  satellite  and  cable  television  services  will  impose 
additional  costs  upon  participants  along the  Service  Chain.  Many  of  these  costs  relate 
to  transition.  For  instance,  broadcasters  may  for  commercial  reasons  need 
to 
simulcast  the  advanced  service  in  parallel  with  the  conventional  4:3  PAL  or  SECAM 
service  in  the  early  stages  of  market  development.  Programme  production  may 
initially  take  longer  or  become  more  complicated,  until  staff  adjust  and  improved 
equipment  reaches  the  market.  Despite  their  transitory  nature,  these  costs  are 
significant  because  they  hold  back  market  development.  The  costs  have  a  collective 
dimension  because  of  the  complexity  and  interdependence  implicit  in  the  Service 
Chain. 

The  Service  Chain  and  potential  sources  of  additional  costs are  described  under  three 
general  headings: 

1.  Broadcaster's operations  including studio  upgrading  and  satellite  transmission 

2.  Cable  redistribution 

3.  Programme production  and  conversion. 

3.1  Broadcaster's  Operations  including studio  upgrading  and  satellite  transmission 

In  order  to  provide  a  broadcast  service,  the  broadcaster  needs  to  put  together  a 
schedule  of  programmes.  These  programmes  may  be  produced 
in-house  or 
commissioned  or  acquired  externally  (see section  3.3 below). For  in-house  production, 
the  broadcaster  may decide  (if  it  has  not  already  been  done)  to  upgrade  his  studio  to 
work in components  (either  analogue  or  digital). Furthermore  he  may wish  to  upgrade 
his equipment  including cameras,  recorders, telecines, etc., to cope with  16:9  D2-MAC 
requirements. 

He  may  in  addition  wish  to  upgrade,  to  a  dual  aspect  ratio  environment,  his  signal 
processing  and  post  production  equipment  such  as  vision  mixing,  special  effects, 
editing  equipment,  "pan  and  scan"  facilities  (to  derive  4:3  from  16:9),  standards 
conversion  equipment,  etc.. 

Although  there  may well  be "learning" costs due  to  the  change  of  production  practices 
in  the  transition  from  a 4:3  to  a  16:9 environment,  the  broadcaster  may  find  that  once 
the  necessary  capital  investment  has  been  made,  his  actual  costs  per  programme  for 
in-house  production  are  no  higher  than  for  a  PAL  4:3  service.  This  situation  is 
however  unlike  to  remain  valid  for  HD-MAC  services  where  the  much  higher  picture 
quality  levels will impose additional  production  costs. 

Assuming the  existence  of a programme,  either  live or  recorded,  this  section  describes 
the  additional  processes  the  broadcaster  and  other  relevant  actor  must  employ  in 
delivering  it to the viewer. 

i) 

ii) 

The  signal  must  be  encoded  in  D2-MAC  using  a  dedicated  encoder  before 
transmission. 

If necessary,  for  instance  in  the  case  of  a subscription  service,  the  signal  is to  be 
encrypted. This will occur  at  the  encoder. 

- 13-

This  encoder/encrypter  may  be  located  either  adjacent  to  the  broadcaster's 
studios or at the satellite uplink station depending on practice. 

-  14-

iii) 

iv) 

v) 

The  acquisition  of  an  encoder/encrypter  (per  channel)  is  a  necessary  cost 
entailed  in the broadcasting of D2-MAC  services. 

For  HD-MAC  services  HD-MAC  encoders/encrypters  will  similarly  be 
required. 

Regardless  of  where  the  encoder  is  located,  in  the  case  of  distribution  by 
satellite,  there  will  be  costs  incurred  by  the  broadcaster  in  transporting  the 
signal  from  the  studio  to  the  satellite  uplinking  station  and  for  uplinking  it  to 
the satellite.  Where  the  signal is to be  distributed  directly to the viewer  by  cable 
without  the  intermediate  use  of  a  satellite,  these  costs  are  for  the  transport 
between  the studio and  the cable  head-end. 

In  the  case  of  satellite  distribution  the  next  step  is  the  access  to  a  satellite 
transponder  capable  of  delivering  the  uplinked  signal  either  direct  to  the 
viewer's home for  a  DTH  (direct  to the home)  service and/or  to  the cable  head-
ends  for  cable  redistribution  to  the  viewer's  home.  The  cost  incurred  is  the 
rental of a satellite  transponder. 

Assuming  that  he  is  not  already  equipped  to  receive  satellite  television,  the 
viewer will have to  acquire  a  suitable  dish  antenna  to  receive  the  16:9  D2-MAC 
services.  He  will  also  require  either  an  add-on  satellite  tuner  to  convert  the 
signals into  a form  that  his existing 4:3 TV  set  can  display  or  a  new  16:9 TV  set 
that  is  already  suitable  for  DTH  satellite  reception.  In  both  cases,  decryption 
facilities  and  possibly  other  new consumer  equipment  (e.g.  a  VCR)  may  also  be 
needed. 

3.2  Cable  Re-distribution 

Cable systems can  receive  D2-MAC signals at  their  head-ends  either  from  satellites  or 
in some cases directly from  the broadcasters'  studios. 

i) 

ii) 

iii) 

In  order  for  a  cable  system  to  distribute  a  signal  broadcast  by  satellite  to  its 
subscribers,  the  satellite  signal  will have  to  be  received  by  a  satellite  dish  at  the 
cable  head-end  and  normally  demodulated  from  F.M.,  which  is  the  modulation 
system  used  in  the  satellite  links,  and  subsequently  remodulated  to  A.M.  which 
is normally  used  on  cable  networks.  In  addition,  depending  on  practice,  it  may 
be  necessary  to  decrypt  and  reencrypt  a  received  encrypted  signal  prior  to 
for 
transmission 
conditional  access/subscriber  management  system  at  the  cable  head-end.  The 
acquisition  of the necessary  head-end  equipment  required  to perform  the  above 
tasks will be a cost  to the cable  operator. 

the  cable.  There  may  also  be  a  requirement 

through 

Even  when  the  television  signals  at  the  head-end  (whether  they  come  directly 
from  the  studio  or  via  satellite), are  prepared  for  distribution  through  the  cable, 
there  may  be  a  requirement  for  reconfiguring  the  cable  system  itself  in  order  to 
distribute  the  signals.  This  requirement,  if  any,  will  vary  from  cable  system  to 
cable  system  depending  on  the  practices  in  operation  and  the  technology  used 
in the system. The  costs of such  reconfiguration,  necessarily  incurred  in  order  to 
distribute  the  D2-MAC  signal, will correspondingly  vary. 

The  subscribers  to  cable  TV  networks  distributing  D2-MAC  16:9  signals  will 
have  to  acquire  either  an  add-on  adapter  to  convert  these  signals  into  a  form 
that  their  existing 4:3 TV  set  can  display  or  a  new  16:9 TV  set  that  already  has 
an  input  suitable  for  these  signals.  In  both  cases,  decryption  facilities  and 
possibly  other  new consumer  equipment  (e.g. a  VCR)  may  also  be  needed. 

3.3  Programme Production  and Conversion 

-  15-

The broadcaster  assembles a schedule  of programmes to provide  a service.  This will 
consist  of  programmes produced  in-house,  using the broadcaster's  own  facilities  and 
programmes  sourced  externally.  Externally  produced  programmes  may  be  simple 
acquisitions  of  finished  programmes  or  new  programmes  commissioned  by  the 
broadcaster. 

All  broadcasters  will  draw  on  these  programme  sources,  with  wide  variation  in  the 
balance  between  internal  and  external  sources.  Completing  a  programme  schedule 
suitable  for  a  16:9  D2-MAC service  will  present  different  cost  implications  to  the 
broadcaster,  depending on whether  the programme  is produced  in-house  or  sourced 
externally. 

3.3.1  Existing Programmes 

Broadcasters will  have  access  to certain  existing programmes  which  are  already  in a 
form suitable for a high quality  16:9 D2-MAC (e.g. post-1952 feature films made after 
effective introduction of wide screen aspect ratios in the cinema). 

The additional  costs relate  to copying the production  in the  16:9 format  on  to video 
tape using a telecine machine (this is known as the "re-mastering" process). 

3.3.2  New Programmes from External Sources 

Where a  broadcaster  commissions  an  external  (independent)  programme  maker  to 
produce  a  programme,  there  will  initially  be  some  additional  costs  incurred  by 
producing  that  programme  in  16:9  and  to  a  higher  technical  quality  specifications. 
These will be transitional and relate to production techniques and practices, currently 
adapted to 4:3 production and exploitation. 

3.3.3  New Programmes Produced In-house 

A  broadcaster  wanting  to  produce  programmes  in-house  may,  depending  on  the 
sophistication  of  his  studio  equipment,  incur  additional  costs  as  above,  on  a 
programme by programme basis. 

3.4  Framework Conditions 

It  should  be  emphasized  at  this  point  that  nothing  in  the  above  description  of  the 
Service Chain, including its production  element, should  be taken  as implying a prior 
preference,  in  the  context  of  the  Action  Plan,  between  options  available  to 
broadcasters. Broadcasters must themselves,  in preparing projects to be  incorporated 
into the Action  Plan, take their own decisions on the matter  in the  light  of  their own 
perception of requirements. There will, of course, be requirements of the Action Plan 
itself,  apart  from  the  overriding  objective  of  launching  a  significant  number  of  new 
advanced services. These include: a high and growing amount of  16:9 programmes per 
service,  and  high  technical  quality  of  picture  and  sound.  But  how  the  broadcasters 
achieve this is left to them. 

TARGETS  TO  BE  ACHIEVED 

-  16-

In  the  context  of  the  objective  stated  in  paragraph  1  above,  it  is  appropriate  to  set 
indicative  targets  for  the  impact  of  the  Community  funding  which  will  be  used  to 
accelerate  the market  development,  as  follows: 

the  achievement  during the life of the Action  Plan  of: 

i) 

ii) 

A  critical  mass  of  satellite  television  services,  using  the  D2-MAC  standard, 
particularly  in its  16:9 format,  or  the HD-MAC  standard. 

A  significant  and  constantly  increasing  number  of  cable  TV  networks  carrying 
high  quality  16:9 D2-MAC services to their  customers. 

iii)  A  significant  and  increasing volume of programming  in  the  16:9 format  and  with 
high  technical  quality  both  in  picture  and  sound.  Such  programming  to  be 
broadcast  in the above mentioned  services. 

5.  T HE  FUNDING  APPROACH  TO  BE  ADOPTED 

i) 

ii) 

iii) 

iv) 

The  funding  will  go  to  projects  which  will  provide  a  complete  service  as 
described  in  section  2  above.  In  other  words,  it  is  not  intended  to  fund, 
separately,  individual  elements  of  the  Service  Chain  in  the  case  where  such 
elements are not  an integral part  of the complete  chain. 

No  funding  will be  made  available  for  consumer  equipment,  either  for  satellite 
or cable reception. This is a  matter  for  the  market  and  it will be  in  the  interests 
of  equipment  makers  themselves  to  price  their  offerings  sufficiently  attractively 
to stimulate consumer  demand. 

In  relation  to  cable  TV  networks,  the  most  obviously  fundable  element  is  the 
necessary  head-end  equipment  as  described  in  section  3.2  above.  Certain  other 
elements  of  cost  in  the  reconfiguring  of  networks  may  also  be  included  in  the 
scope of the Action  Plan  provided  that  such  investments  are  : 

a) cost  effective 

b) specifically  required  for  the targeted  advanced  service,  and 

c) where  the  impact  of such  investments  is judged  to  be  of  major  importance  to 
the achievement  of the Action  Plan  objective 

indicated 

Broadcaster's  costs  as 
including 
in 
encoding/encryption,  signal  transport  and  up-linking  and  satellite  transponder 
rental,  are,  in  principle,  included  in  the  scope  of  the  Action  Plan.  The  amounts 
incurred  by  broadcasters 
paid  will  be  a  portion  of  the  costs,  additionally 
providing the advanced  services. 

section  3.1  above  and 

-  17-

v) 

In  the  case  of  in-house  programme  production  it  should  be  emphasized  that 
whereas  the  complete  re-equipping  of  television  studios  is  not  included  in  the 
objectives  of  the Action  Plan,  nevertheless,  certain  studio  investments  could  be 
within  its scope provided that they are : 

a) cost  effective 

b)  specifically  required  by the  broadcaster  providing  the  advanced  services  for 
the purpose of such service provision. 

c)  where  the  impact  of  such investment  is judged  to  be  of  major  importance  to 
the achievement  of the Action Plan objectives. 

Broadcasters  with  plans  for 
to  seek 
Community  funds  for  the  upgrading  of  their  studio  facilities  to  16:9  working 
must  recognize  that  this  choice  will  limit  their  scope  to  be  funded  for  making 
individual programmes. 

in-house  production  who  choose 

vi)  Concerning  independent  producers,  the  aim  is  to  ensure  they  can  respond 
adequately  to  broadcasters'  requirements  for  a  wide  range  of  attractive 
programmes  in  adequate  volume,  made  to  the  appropriate  technical  quality. 
Independent  producers  will  in  many  cases  incur  additional  costs  to  meet  the 
broadcasters'  requirements  for  quality  and  format.  These  additional  costs  are 
within  the  scope  of  the  Action  Plan  and  a  portion  of  such  costs  may  be 
reimbursed. 

Some  existing  television  programmes  and  most  feature  films  are  exploitable  in 
16:9 but  are currently available only in 4:3 versions. These  must  be converted  to 
16:9  if  they  are  to  be  acquired  for  widescreen  D2-MAC  transmissions  by 
broadcasters. These additional costs are within the scope of  the Action  Plan and 
a  portion  of  such  costs  may  be  reimbursed  either  to  the  rights  holder,  if  he 
undertakes the task, or to the broadcaster. 

vii) 

Summarizing  the  above,  the  broad  areas  at  which  Community  funding  will  be 
targeted are identified  to be: 

a)  Broadcaster's  operations 
transmission 

b) Cable  Redistribution 

including 

studio  upgrading  and 

satellite 

c) Programme Production and Conversion 

viii)  The  allocation  of  these  funds  will  be  governed  by  the  principle  of  double 

degressivity  in the following sense: 

a)  In  order  to  encourage  the  early  start-up  of  the  targeted  advanced  services, 
those projects starting earliest will receive the greatest  levels of  funding. 

b)  In  line  with  the  policy  that  Community  funding  is  to  cushion  the  economic 
consequences  in  the  start-up  phase,  the  funding  allocated  to  projects  will  be 
progressively reduced each year the incentive  is in place. 

- 18-

6. 

INDICATIVE INTERNAL ALLOCATION OF FUNDS 

The indicative percentage breakdown of Community funding is as follows: 

i) 

Broadcaster's operations including 

studio upgrading and satellite transmission 

60 - 70 % 

ii)  Cable Redistribution 

5 -15 % 

iii)  Programme Production and Conversion 
It is intended to retain a certain level of flexibility to vary these percentages should the 
requirements of the Action Plan, as it evolves, dictate it. 

25  % 

7.  PRINCIPLES AND CRITERIA FOR IMPLEMENTATION 

Project  proposals  will  be  evaluated  using  procedures  with  an  independent  element 
which will take account, inter alia, of the following general and specific conditions. 

7.1.  General Principles - Equitable Distribution 

The set of successful projects must: 

i) 

ii) 

show a spread of projects between entities to avoid undue concentration  or the 
creation of monopolies or cartels; 

have  a  wide  geographic  distribution  in  order  to  ensure  the  Community 
dimension; 

iii) 

involve,  to  a  reasonable  degree,  programme  producers  independent  of  the 
broadcasters in the projects; 

iv) 

comply with Community competition rules. 

7.2.  Specific Criteria for Selection 

Other  things  being  equal,  priority  for  Community  funds  should  be  given  to 
commercially viable projects which fulfil the following criteria: 

i) 

ii) 

a high percentage of 16:9 content; 

a large audience; 

iii) 

high technical quality levels; 

iv) 

scope for transfrontier services; 

v) 

scope for the reasonable  involvement  of  programme producers  independent  of 
the broadcasters. 

7.3  Criteria for  Programme Support 

-  19-

Both  in-house  production  by  broadcasters  and  external  production  are  within  the 
scope of the Action Plan. 

Community  support  for  programme  production  and  conversion  will  be  closely  linked 
to the new  16:9 services, but able to benefit  the whole  sector. 

To qualify  for Community support on a programme by programme  basis, producers  of 
new  programmes,  and  rights  holders  of  certain  existing  programmes  exploitable  in 
16:9 but requiring  re-mastering,  must  have  an  order  for  the  programme  from  at  least 
one  of  the broadcasters  involved  in implementing  the Action  Plan, who  undertakes  to 
broadcast  the  programme  in  16:9  D2-MAC  or  HD-MAC.  The  technical  quality  of 
these  programmes  must  be  such  as  to  allow  their  exploitation  in  16:9  D2-MAC 
services in the short term and also in HD-MAC services in the medium  term. 

Flexible mechanisms  will be  set  up to  respond  to  the  specific  needs  of  different  kinds 
of  programmes,  including  additional  production  costs  for  "stock" programmes with  an 
extended  life  (e.g. drama  series; cultural events etc.)  and conversion  or remastering  of 
existing programmes exploitable in 16:9. 

These  will  be  open  mechanisms  which  will  operate  on  the  general  criteria  set  out 
above  together  with  specialised  selection  and  funding  criteria  for  each  mechanism. 
The detail of these  specialist  criteria  remains to  be developed  and will be published  in 
the Official  Journal within  three months  of the  adoption  of the present  decision.  They 
will  function  automatically  and  without  any  value  judgements  on  the  creative 
approach.  Nothing  in  this  Action  Plan  shall  interfere  with  normal  relationships 
prevailing between broadcasters and external rights holders on these matters. 

FINANCIAL STATEMENT 

FINANCIAL IMPLICATIONS 

Hlk: 

HDTV - Action Plan for the introduction of 
advanced television services in Europe. 

Budget article 

B6-8105 (part of) 
B6-8106 
B3-3 
Part A 

3.  Legal basis: 

Article 235 of EEC  Treaty 

4.  Description 

4.1.  Objectives 

The objective of the  Action Plan is to ensure the accelerated development of the market for  advanced TV 
services by  satellite  and  cable based  on the D2-MAC  standard,  particularly  in  its  16:9 format  and  the 
HD-MAC  standard.  Community  funds  will  contribute  within  the  period  up  to  the  end  of  1996  to 
achieve the rapid  transition  from  conventional  services  to  a  fully  functioning  market  for  advanced  TV 
services by covering parts of the  additional costs incurred by broadcasters, programme makers and cable 
TV network operators in the provision of these advanced TV services. 

The general targets set for the Action Plan are the achievement during the above-mentioned  period of: 

i) 

A  critical  mass  of  satellite  television  services,  using  the  D2-MAC  standard,  particularly  in  its 
16:9 format,  or the HD-MAC standard. 

ii)  A significant  and  constantly  increasing  number  of  cable  TV  networks  carrying  high  quality  16:9 

D2-MAC services to their customers. 

iii)  A significant  and  increasing  volume of programming  in  the  16:9  format  and  with  high  technical 
quality  both  in  picture  and  sound.  Such  programming  to  be  broadcast  in  the  above  mentioned 
services. 

The quantitative targets set per annum are 

1. Cumulative number of services 
by the end of each year 

1993 

1994 

1995 

1996 

15 

20 

25 

30 

2. Cumulative hours of supported programming 

by the end of each year 

8,000 

15,500 

22,000 

26,000 

The notion of a critical  mass of services  as mentioned  above relates to the point  in the  market  development 
from  which  one may expect  rapid  self sustaining growth.  It  is estimated  that  15 services  with  wide audience 
potential could provide such a critical mass. 

4.2.  Duration  : From adoption of the present Decision to end of 1996. 

4.3.  Economic operators (to whom the funds  are directed) 

Exhaustive  consultations  over  an  extended  period  of  time  with  a  number  of  economic  actors  in  the 
television service provision  market - broadcasters, equipment and programme makers, cable and satellite 
operators  - have  identified  additional  costs to those parties  which  could  be involved  in the provision of 
these advanced services based on D2-MAC, particularly  in its  16:9 format  and HD-MAC. 

5.  Classification  of expenditure 

5.1.  Non compulsory expenditure (NCE) 

5.2.  Dissociated  appropriations (DA) 

6.  Nature of expenditure 

6.1.  Cofinancing 

Community  financial  incentives  are  intended  to  ensure  the  accelerated  development  of  the  advanced 
television service market in conformity  with the strategy set out in the Council Decision,  by contributing 
In  other  words,  Community  funding  will 
to  the  reduction  of  the  additional  start-up  costs  involved. 
compensate a part of the additional costs incurred  by the concerned economic actors to achieve this rapid 
transition from conventional services to the advanced television  services, using D2-MAC, particularly in 
its  16:9 format and HD-MAC. 

The  economic  operators  launching  new  services  will  make  large  investments  and  will  carry  the  entire 
commercial  risks  associated.  The  philosophy  governing  Community  financial  involvement  relates  to 
covering  part  of  the  additional  costs  incurred  in  connection  with  the  new  services,  up  to  a  ceiling  per 
area of expenditure (see 7.2 below).  Ceilings are judged  to be more appropriate than percentages due to 
the wide variation of potential costs which  in many cases could greatly  exceed the Community  resources 
available.  Furthermore,  the  principle  of  double  degressivity  (see  7.1.  below)  will  ensure  that  these 
ceilings will progressively be reduced each year. 

It  will  be ensured  that  in  each  contract  covering  a  project  the  amount  of  Community  fundings  will  be 
clearly established  together with the contribution of the project  members in order to provide an adequate 
basis for effective  financial  control. 

- 3-

7.  Estimate of  financial  implications  and  method of  calculation 

7.1.  The Action  Plan governing  the allocation  of  Community  funding  is  set  for  a period  commencing  on  the 
date of  adoption of this Decision  and concluding on 31st  December  1996.  Community  funds  during  this 
period  amount to 850 MECUS. 

Broad areas at which Community funding  will  be targeted are identified  to be : 

(a) 

Broadcasters operations including studio upgrading and satellite transmission 

(b)  Cable redistribution 

(c) 

Programme production and conversion 

The  allocation  of  the  funding  will  be governed  by  the  principle  of  double  degressivity  in  the  following 
sense : 

a) 

b) 

In order  to  encourage  the  early  start-up of  the targeted  advanced  services,  these  projects  starting 
earliest will  receive the greatest level of  funding. 

In  line  with  the  policy  that  Community  funding  is  to  cushion  the  economic  consequences  in  the 
start-up  phase,  the  funding  allocated  to  projects  will  be  progressively  reduced  each  year  the 
incentive is in place. 

7.2.  Indicative internal  allocation of funds 

a)  Because  of  the  expected  great  variation  in  requirements  from  project  to  project  it  is  impossible  to  be 
definitive  as  to  the  necessary  Community  contribution  required  to  meet  the  objective.  The  following 
table  provides  an  estimate  of  the  ceilings  for  the  Commission  contribution  to  each  element  of  cost 
identified. 

AVERAGE UNIT COSTS FOR  COMMUNITY 
FINANCE 

1992 

1993 

1994 

1995 

1996 

Studio upgrading  (MECU) 

Transponder  cost/year  (MECU) 

Cable network  upgrading  (KECU) 

3 

2,5 

50/ 
500 

3 

6 

3 

5 

50/ 
500 

40/ 
400 

2 

5 

40/ 
400 

2 

4 

30/ 
300 

The wide range indicated  with respect to cable is a reflection  of the very  large variation between  different 
cable systems. 

For the programming element the following  average lump sum support is relevant. 

-4 

KEY FOR COMMUNITY FINANCE 

16:9 Production/hour (KECU) 

Programme conversion/hour (KECU) 

1992 

1993 

1994 

1995 

1996 

40 

2.2 

35 

1.9 

25 

1.5 

22 

1 

18 

1 

b) 

Taking into account the quantitative targets set out in section 4.1.  above and the ceilings  identified 
in  7.2  a),  together  with  the  operation  of  the  double  degressivity  principle  the  indicative 
breakdown of the Community funding for the period of the Action Plan,  in MECUS is : 

1992 :  33 (B6-8105 part of) presently in reserve BO-40 

1993 :  145 (B6-8106) +  32.5 (B3-3)  »  177.5 

1994 :  175 (Bo-8106)^  +  70 (B3-3)  =  245 

1995 :  150 (Bo-SlOep  +  59.5 (B3-3)  =  209.5 

1996 :  131 (B6-8106y)  +  54 (B3-3)  =  185 

A detailed breakdown is given in Tables  1  and 2 below. 

c) 

Indicative percentage breakdown of Community funding  between the areas : 

i) 

Broadcasters operations including studio upgrading 

and satellite transmission  : 60 - 70 % 

Cable redistribution  : 5 -  15  % 

Programme acquisition and production  : 25 % 

ii) 

iii) 

<*>  This  activity  must  clearly  be  integrated  into  the  Fourth  Framework  Programme  in  principle  from  1994  as  laid  down  in  the 
communication  from  the Commission  to the Council and the  European  Parliament  : "Research  after  Maastricht  : an  Assessment. 
A Strategy" (DOC.SEC.(92)682 final, para  155). 

ACTION PLAN FOR THE INTRODUCTION OF ADVANCED TELEVISION SERVICES  IN EUROPE 

Detailed  quantitative targets and Community  Support 

Broadcasting 
1.  Transmission 

Cumulative number of 

Channels 

2.  Studio upgrades 

MECU 

Studios 

MECU 

Production  (Hours  supported) 
3.  Production of programmes 
4.  Conversion of programmes 

Retransmission 
5.  Cable networks 

TOTAL 

MECU 

MECU 

1992 

1993 

1994 

1995 

1996 

Subtotal 

Total 

10 

25 

1820 

1820 
4 

4 

33 

15 

90 

8 

24 

6150 
630 
5520 

32.5 

20 

25 

30 

100 

125 

120 

460 

10 

30 

7580 
2580 
5000 
70 

2 

6 

6520 
2520 
4000 

59.5 

~ 

3950 
2950 
1000 
54 

60 

193 
27 

30 

45 

19 

12 

176.5 

245 

209.5 

186 

Table 1 

520 

220 

110 

850 

This  table  shows  the  result  of  a  scenario  developed  in  order  to  evaluate  the  financial  needs  for  the  Action  Plan.  Most  of  the  figures  represent  average 
estimations  and  forecasts  that  may  vary  widely  depending  on the  type of  project  and  the evolution  of the  market.  For  this  reason  these  figures  are to  be seen 
as purely  indicative  and  should  not  be interpreted  as constituting  a commitment  of the Commission. 

- 6-

DETAILED BREAKDOWN OF PROGRAMME  ELEMENT 

1st year 

2nd year 

3rd year 

4th year 

5th year 

Total 

2200 

1820 

4250 

43 

4 

700 

0 

0 

1820 

4950 

37 

4 

1500 

5000 

7000 

71 

7,5 

25 

2580 

7770 

33 

62,5 

7580 

14770 

51 

70 

1900 

5520 

8000 

70 

10,5 

35 

630 

3400 

19 

22 

6150 

11400 

54 

32,5 

Table 2 

1000 

4000 

4900 

82 

4 

22 

2520 

11600 

22 

55,5 

6520 

16500 

40 

59,5 

1000 

1000 

1600 

62 

1 

18 

2950 

13800 

21 

53 

3950 

15400 

26 

54 

17390 

25750 

67 

27 

8680 

37270 

> 
23 

193 

26070 

63020 

41 

220 

REFORMATTING  : 

Standard amount (ECU/hr) 

Hours supported 

Hours required  (15 services) 

Percentage requirements covered 

Budget expenditure (MECU) 

NEW PRODUCTS: 

Standard amount (KECU/hr) 

Hours supported 

Hours required (15 services) 

Percentage requirements covered 

Budget expenditure (MECU) 

TOTALS : 

Hours supported 

Hours  required  (15 services) 

Percentage requirements  covered 

Budget  expenditure 

- 7-

7.3.  Commitments of the Economic Operators (as entered  into in the Memorandum of  Understanding) 

i) 

Commitments of Broadcasters 

To  launch  on the  market  one or  more  television  services  using  the  D2-MAC  standard, 
particularly  in  its  16:9  format,  or  the  HD-MAC  standard, 
in  conformity  with 
Community policy. 

Ensure that where software is available in  16:9 (tape or film),  broadcasts of this  software 
shall, to the greatest extent practicable, be in  16:9 D2-MAC  format. 

Ensure full  exploitation in  16:9 D2-MAC of suitable existing programme material. 

Produce  programmes  or  have  programmes  produced  suitable  for  16:9  D2-MAC 
broadcasts. 

ii) 

Commitments of Industrial Manufacturing  Companies 

Ensure  the  availability  in  the  market  of  16:9  D2-MAC  receivers  at  such  times  and  in 
sufficient  quantities in order to meet the requirements of the new services. 

Ensure  continued  compatibility  with  existing  transmission  standards  of  the  16:9  D2-
MAC receivers distributed. 

Ensure improved  availability of programme production  equipment  suitable for  16:9 D2-
MAC format. 

iii)  Commitments of Satellite Operators 

Make  available,  on  an  equitable  basis,  transponder  capacity  according  to  the  needs  of  the 
Broadcasters for their  16:9 D2-MAC services. 

iv)  Commitments of Cable Network Operators 

Retransmit to subscribers  16:9 D2-MAC originated programmes in the  16:9 D2-MAC  format. 

8.  Type of Control 

The Commission will be responsible for  the execution of the Action Plan.  It will be assisted  in this regard on 
the technical  aspects by the experts group mentioned  in part 3 section 3.2  ii).  The administrative aspects will 
be controlled by the administration departments of DG XIII and DG X. 

ISSN 0254-1475 

COM(92) 154 final 

DOCUMENTS 

EN 

15 

Catalogue number: CB-CO-92-210-EN-C 

ISBN 92-77-44006-6 

Office for Official Publications of the European Communities 
L-2985 Luxembourg