Opinion of the Committee of the Regions on the 'Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions on The Convergence of the Telecommunications, Media and Information Technology Sectors and the Implications for Regulation'
Date: 1999-11-17
Institutions: European Committee of the Regions
Subjects: EU law, information technology, mass media, telecommunications

29.2.2000

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Official Journal of the European Communities

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27.

to ensure that their local and regional governments will
be involved in fixing the priorities of Phare national
programmes, in particular the institutions-building prog-
ramme, so that they can prepare themselves for integra-
tion with the European Union;

28. The Committee of the Regions instructs its President
to forward the present resolution to the European
Commission, the EU Council, the European Parliament,
the Helsinki European Council and the parliaments of
the Member States, and to the governments and the
parliaments of the applicant countries.

Brussels, 17 November 1999.

The President

of the Committee of the Regions

Manfred DAMMEYER

Opinion of the Committee of the Regions on the ‘Communication from the Commission to the
Council, the European Parliament, the Economic and Social Committee and the Committee of the
Regions on The Convergence of the Telecommunications, Media and Information Technology
Sectors and the Implications for Regulation’

(2000/C 57/02)

THE COMMITTEE OF THE REGIONS,

having regard to the Communication from the Commission to the Council, the European Parliament, the
Economic and Social Committee and the Committee of the Regions on The Convergence of the
Telecommunications, Media and Information Technology Sectors and the Implications for Regulation
[COM(97) 623 final] [COM(1999) 108 final];

having regard to the decision of the Commission of 17 March 1999 to consult the Committee on the
subject in accordance with the first paragraph of Article 198c of the Treaty establishing the European
Community;

having regard to the decision of its Bureau of 2 June 1999 to instruct Commission 3 (Trans-European
networks, transport, information society) to prepare the opinion;

having regard to the draft opinion (CdR 191/99 rev. 1) adopted by Commission 3 on 24 September
1999 (rapporteur: Mr Schiffmann) (D, PSE),

at its 31st plenary session of 17 and 18 November 1999 (meeting of 17 November) unanimously adopted
the following opinion.

1.

Introduction

Consultation on the Green Paper on Convergence

1.1.
The subject of this opinion is the results of the public
consultation on the green paper on The Convergence of
the Telecommunications, Media and Information Technology
Sectors and the Implications for Regulation. The green paper
was submitted by the Commission on 3 December 1997.

the green paper,

This was followed by a public consultation on the
1.2.
content of
the results of which were
published by the Commission on 29 July 1998 in a working
document (1). In this working document the Commission also
posed questions on three problem areas which had proved to
be of particular importance during the first stage of the
consultation (access to networks and gateways; investment,
innovation and content production; balance between the
public interest and competition considerations in regulation).

(1) SEC(1998) 1284 final.

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1.3.
In its Communication of 9 March 1999 the Commis-
sion presented its view of the overall results of the consultation
on the green paper, summarised the main results and sketched
out the next steps planned.

2. Comments on the Commission’s statements on the

results of the consultation

The green paper highlighted the importance of this
1.4.
trend for economic development, job creation and the diversity
of cultural identity in Europe, and looked in particular at the
question of the legal framework. It analysed the concept of
convergence, investigated existing and potential barriers which
might hinder market and technological developments and
dealt with questions connected with existing and possible
future regulatory frameworks and initiatives in this area. Finally
it put forward ideas on a future regulatory policy for the
sectors affected by convergence.

1.5.
In its Communication the Commission considers the
main conclusion of the consultation to be that the convergence
of
technological platforms and network infrastructures is
already a reality and that similar regulatory conditions should
therefore apply to all such infrastructures, irrespective of the
types of services carried over them. This ‘horizontal’ approach
to the regulation of infrastructure should be complemented by
the existing vertical approach to the regulation of service
content, which would continue to depend on the specific
nature of the service in question. The second stage of the
consultation dealt specifically with the three questions of
access to networks and gateways, investment, innovation and
content production and the balance between the public interest
and competition considerations in regulation.

The first opinion of the Committee of the Regions

1.6.
The Committee of the Regions adopted an opinion on
the green paper itself, based on a draft drawn up by the
rapporteurs, Mr Koivisto and Mr Nash (1)
in September
1998 (2). The Committee of the Regions’ second opinion deals
with the results of the second stage of the public consultation.

In its opinion on the green paper the Committee of the
1.7.
Regions considered the launch of a debate on the development
of regulation in response to convergence to be of the utmost
importance. It also endorsed, inter alia, the Commission’s view
that regulation should be kept to the bare minimum. It argued
that the Commission had placed too much emphasis on market
development and not enough on general social objectives. It
believed that the best approach was to retain the existing
regulatory systems and, building on these, to make cautious
adaptations to new circumstances, e.g. the many forms of
on-line and interactive service.

(1) CdR 149/98 final.
(2) OJ C 373, 2.12.1998, p. 26.

Assessment of the convergence of the telecommunications, media and
information technology sectors

2.1.
Convergence of the telecommunications, media and
information technology sectors is to be understood as the
growing together or exchangeability of different network
platforms used for the transmission of similar kinds of
electronic communication services, or as the merging of
appliances such as telephones, televisions and PCs. This is
therefore initially a technological phenomenon, but also an
economic phenomenon in the development of the information
society. There is as yet little evidence of a rapid convergence of
content between broadcasting and new services.

2.2.
The Commission continues to consider this convergen-
ce trend as of outstanding importance for future economic
growth and for the creation of new jobs in Europe. In line with
the Committee of the Regions’ assessment, however, the
Commission stresses in its new communication that conver-
gence could under certain circumstances also pose a threat to
the preservation of cultural identities and social cohesion.

2.3.
The COR agrees with the Commission that the new
technologies and the broad use of new services and applica-
tions in a number of important areas will affect and change
the life of society and the individual.

The Committee of the Regions shares the view of many
2.4.
participants in the consultation that
the Commission is
overestimating the speed of the trend and the foreseeable
economic significance of convergence. Convergence offers
Europe’s regions a number of chances and opportunities; at
the same time, however, there is also a danger of negative
effects, as the Committee argued at length in its opinion on
the green paper in connection with the possible accentuation
of existing regional disparities with regard to infrastructure
networks and the use of media and services.

Regulatory approach

2.5.
The Committee of the Regions is pleased to note that
as a result of the public consultation on the green paper the
Commission is now emphasising more strongly that regulation
should not only promote investment, especially in new
services, but should also above all offer a number of public
interest guarantees. The COR does not see a balanced regulato-
ry framework of this kind serving the public interest as a
barrier to entry for new market participants, but rather as a
major precondition for legal and investment certainty.

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2.6.
The rules should be transparent, clear and proportiona-
te. Here the Commission makes a distinction between
a) regulation imposing positive and negative obligations in
the public interest; b) sector-specific regulation replacing or
complementing competition rules; and c) promotional measu-
res geared to specific policy objectives.

them the public-interest objectives cannot be achieved. The
question as to whether these would be permanent rules or
merely transitional rules pending the establishment of a
mature, competition-orientated market can remain open for
the time being. This question should be reassessed and resolved
in the light of developments at the appropriate time.

2.7.
The Commission proposes that transport media and
content be regulated separately. The regulatory approach
should provide for homogeneous treatment of all transport
network infrastructure and ensure that content regulation is in
accordance with the specific characteristics of given content
services.

2.14.
As stressed in the Committee of the Regions’ first
opinion, flexibility and national and regional discretion should
be central elements in a future regulatory process in the light
of different infrastructure and competition situations and with
a view to the principle of subsidiarity.

In accordance with the regulatory objectives in the
2.8.
public interest a vertical approach should be adopted to the
regulation of content, building on current structures and
complying with the principle of proportionality in regulating
new services.

2.9.
Finally, the Commission feels that the consultation
also highlighted as major objectives the need for effective
application of the competition rules and measures to promote
premium European content.

Answers to the three questions put during the second stage of public
consultation

The Committee of the Regions is glad that the second
2.10.
stage of the consultation dealt in detail with the central issues
of access to networks and digital gateways in a converging
environment, the creation of an environment conducive to
investment and innovation, the promotion of the production,
distribution and availability of European content and guaran-
tees of a balanced regulatory approach.

2.11.
Non-discriminatory access to networks and gateways
is of strategic importance for the development of competition,
as it creates a link between network operators, service providers
and end-users.

2.12.
A balanced approach to regulation is to be adopted
in order on the one hand to avoid the danger of over-regulation
and on the other to protect the public interest and promote
sustained competition. In this context the Committee of the
Regions stresses its belief that the market and competition
cannot make an effective contribution to the protection of
minors and human dignity.

Promotion of European audiovisual productions

2.15. With a view to the preservation of the cultural
diversity of Europe’s countries and regions and to the creation
of jobs in the audiovisual industry, the Committee of the
Regions welcomes the proposals for further measures to
promote European audiovisual production. The Committee
recognises the economic importance of attractive audiovisual
content and objectives.

2.16.
The Committee generally welcomes the conclusions
of the consultation relating to the components of an environ-
ment conducive to the production of European content. It
considers these components to be a regulatory framework,
regulatory requirements for the production of European
audiovisual content, effective copyright protection, tax and
financial
incentives and open and interoperable technical
standards.

Conclusions on public service broadcasting

The Committee of

the Regions is glad that

2.17.
the
consultation highlighted the need for optimum integration of
public service broadcasting into the new environment in order
to achieve public service objectives such as basic supply and
diversity of opinion; particularly so as the consultation, in line
with Protocol 9 to the Amsterdam Treaty and the COR’s first
opinion, laid emphasis on the responsibility of the Member
States for determining the remit and responsibilities of public
service broadcasters, and suggested that these broadcasters be
encouraged use new technologies and ways of reaching their
public.

2.18.
In view of the increasing proliferation of channels
offered in the converging media environment the Committee
of the Regions attaches special importance to the general remit
of the public service broadcasting channels.

2.13.
The Committee of the Regions stresses, as one of the
findings of the consultation on achieving the political objecti-
ves set, the need for sector-specific rules on access to infrastruc-
ture. These rules should not, as the Commission suggests, be
subordinate to the application of competition law, as without

2.19.
The Committee of the Regions would also refer to
the central role, highlighted in the consultation, of the public
service broadcasters in the production of European content
and the establishment of a quality benchmark.

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2.20.
The Committee of the Regions also notes that the
idea emerged from the consultation that the public service
broadcasters should be encouraged to make a clear distinction
between their public service broadcasting activities and those
activities which were subject to competition. In accordance
with Protocol 9 to the Amsterdam Treaty, the Committee
would sound a warning against translating this idea into rules
so comprehensively that the existence and development of
public service broadcasting might be prejudiced. Under the
additional protocol
the Member States’ responsibility for
laying down the financing arrangements for public service
broadcasters is restricted only where it might prejudice trade
and competition conditions in the Community to such an
extent that the public interest would be compromised. But
even here, in assessing this restriction ‘the realisation of the
remit of that public service should be taken into account’.

3. Specific comments on the results of the consultation

from the point of view of the regions

Importance of general social objectives in regulation

3.1.
The Committee of the Regions points out that in its
opinion on the green paper it voiced the criticism that the
green paper placed too little emphasis on general social
objectives. The Committee of the Regions still believes that
rules to protect the public interest do not stand in opposition
to, but rather coincide with the objective of developing open
markets. Only a generally binding regulatory framework makes
it possible for all market participants to work together in an
ordered and predictable way, thus forming the essential basis
for the development and operation of competition-orientated
markets.

3.2.
The Committee of the Regions feels that this view has
been confirmed by the results of the consultation and therefore
calls for more attention to be paid to general social objectives.

3.3.
The Committee of the Regions therefore welcomes the
Council’s statement in its conclusions on the results of the
consultation that the regulatory environment needs to be
underpinned by clearly defined political objectives and that
regulations based on these principles are a necessary means
for the achievement of public-interest objectives such as a
universal service, pluralism, cultural diversity and the protec-
tion of minors and human dignity. The objective must also
always be to ensure that information providers act responsibly
and that information is reliable.

The Committee of the Regions also welcomes the
3.4.
European Parliament’s support
for linking application of
competition law with respect and guarantees for political goals
like pluralism, protection of minors and promotion of cultural
diversity. The Committee endorses the Parliament’s view that
the disappearance of the shortage of frequencies must not
prejudice the safeguarding of political goals.

Need for sector-specific rules

The Committee of the Regions maintains its view that
3.5.
the aim should be to establish a regulatory framework which
is a combination of options 1 and 2 proposed in the green
paper, i.e. the maintenance in principle of existing regulatory
systems with simultaneous cautious adaptation to changing
circumstances. This should allow for the continuation of
regulatory systems in the Member States where the differing
importance and influence of services is reflected in differing
degrees of regulation. The Committee of the Regions is glad
that this assessment received clear support in the course of the
consultation.

The Committee of the Regions wholeheartedly welco-
3.6.
mes the European Parliament’s support for the concept of a
single regulatory framework for the function of transmitting
information over different networks and for separating this
regulatory framework from that covering content.

3.7.
The Committee of the Regions believes that there is a
need for sector-specific rules in relation to network access too.
There is also a general need, and not just in individual cases,
for rules specific to broadcasters, including ‘must carry’ rules
for public service broadcasting. The regional level should be
involved in the decision on network access.

Promotion of the production of audiovisual content

The Committee of the Regions expects the demand for
3.8.
high-quality content to increase, particularly in the audiovisual
field, and believes that further measures for the promotion of
European production should be studied and put into effect.

3.9.
The Committee of the Regions urges the Commission,
in the framework of the GATS negotiations now beginning, to
ensure that the necessary scope for responsible, particularly
regional, support measures is retained in full. The efforts to
achieve worldwide free trade, whilst in principle laudable, must
not call into question either European, national or regional
support projects or the financing, existence or development of
public service broadcasting.

The special role of television

3.10.
The Committee of the Regions also shares the Euro-
pean Parliament’s view that in the age of digital production
and distribution television will continue for the foreseeable
future to be the principle medium of primary information
provision and processing and that it continues, therefore, to
be of paramount importance in our society and democracy in
helping people to arrive at opinions and decisions, in the
preservation of cultural diversity and in conveying social
values. The Committee of the Regions agrees in particular that
this applies irrespective of the type of financing and the
method of transmission.

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3.11.
The Committee wholeheartedly welcomes the Coun-
cil’s comments of 25 January 1999 on the role of public
service broadcasting, on the power of the Member States to
finance this, on the fulfilment of the mandate of public service
broadcasting and on the ability of bodies in this sector to
provide high-quality channels and services and to develop and
diversify their activities in the digital age.

4. Conclusions of the Committee of the Regions on the

next steps planned by the Commission

Interests of the regions in the convergence process

4.1.
The Committee of the Regions points out that exploita-
tion of the possibilities of the information society offers
economic opportunities as well as risks, particularly for
peripheral regions. The Committee calls on these regions to
seize the opportunities. In this context it reiterates its reference
to the major differences between the regions in terms of
infrastructure and media culture and use and calls on the
Commission to help iron out these differences in the interests
of cohesion in the Union. It would refer in this connection to
its Opinion on the Communication from the Commission on
cohesion
(rapporteur
information
and
Mr Koivisto) (1).

society

the

4.2.
The Committee of the Regions calls on the Commis-
sion, in connection with its responsibilities for shaping the
regulatory framework and the support measures, to work to
ensure, in relation to network infrastructure and media culture
and use, that basic supply, cultural diversity and pluralism are
maintained in all regions of the EU.

Sector-specific rules and public objectives

4.3.
The Committee of the Regions believes that the legal
regulatory framework should guarantee the protection of the
public interest, particularly protection of minors, pluralism
and cultural diversity. These protection objectives and rules
must in particular be maintained during the forthcoming
revision of the Television without frontiers Directive.

The Committee of the Regions reiterates its call for a
4.4.
regulatory framework in the form of a combination of
options 1 and 2 proposed by the Commission (retention in
principle of the current regulatory systems and simultaneous
cautious adaptation to changing circumstances). This would
the future
also take account of
development of convergence in technological, content and
economic terms.

the uncertain course of

(1) CdR 270/97 fin — OJ C 64, 27.2.1998, p. 20.

It

The Committee of the Regions is in favour of separate
4.5.
regulation of services and content.
is convinced that
technological convergence does not necessitate the same legal
treatment of broadcasting, new services and telecommunica-
tions products. Rather,
the legal classification of services
should be geared to the nature and importance of products
and services. The Committee of the Regions also believes that
the legal regulatory framework should not be seen primarily
as a barrier to entry, but rather above all as a precondition for
guaranteeing legal certainty. The Committee would stress that
it is in favour of sector-specific regulation in relation to
network access too.

4.6.
In relation to the content of electronic communication,
the Committee of the Regions is in favour of a graded-intensity
regulation model — building on existing rules and respecting
the principles of subsidiarity and proportionality — which
would be applicable independently of the infrastructure used.
The model would have to take account of different contents
and ensure that contents aimed at the public continued to
meet particular requirements in terms of public service and
social objectives.

4.7.
The Committee of the Regions believes that sector-spe-
cific regulation should also embrace supervision of market-
dominating firms for abuses and the possibility of ex-ante
regulation to achieve certain competition objectives, such as
non-discriminatory network access.

further regulation,

The Committee of the Regions urges that,

in the
4.8.
process of
the need for measures to
protect consumer interests be examined. The legal position of
consumers should not differ to any significant extent according
to which network platform is used.

Contribution of self-regulation

The Committee of

4.9.
the Regions thinks that self-
regulation and monitoring, particularly in the case of services
aimed at the public, can make an important contribution to
safeguarding public interests, provided that they conform to
national and regional cultural and legal traditions and practice
and provided that functioning competition is guaranteed.

Public service broadcasting

The Committee of the Regions assumes that televi-
4.10.
sion’s central role in society will continue and that
the
achievement of public-interest objectives such as the protec-
tion of minors, human dignity and cultural diversity will
therefore continue to be particularly necessary in this area.

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4.11.
The Committee of the Regions is in favour of a
balanced approach to the optimum integration of public
service broadcasting into the new environment. The Commit-
tee in particular believes that broadcasting markets should
continue to be organised on a national and regional basis.

4.12.
The Committee of the Regions reiterates its view that
a separate legal framework will continue to be needed for
public service broadcasting in order to continue to underpin
the important role assigned to it in Protocol 9 to the Amster-
dam Treaty.

4.13.
The Committee of the Regions believes that public
service broadcasting should be integrated in such a way as to
exclude any threat
In
particular the Committee thinks that broadcasting organisa-
tions’ public service remit, which is also the basis of their
financing, should not stop at the boundary between public

to its existence and development.

service broadcasting and competition-orientated broadcasting
or new activities. The Committee of the Regions is in favour
of guarantees of the existence and development of public
service broadcasting which, in the framework of this remit,
would also include the right to exploit all the new technologies
and services.

The Committee of the Regions believes that in view
4.14.
of their proximity and direct involvement the regions have an
important role to play in the authorisation and supervision of
broadcasters.

Coordination of regulatory authorities

4.15.
The Committee of the Regions is convinced that the
coordination of, and continuous exchange of experience
between, national regulatory authorities at European level is
both useful and necessary.

Brussels, 17 November 1999.

The President

of the Committee of the Regions

Manfred DAMMEYER