Third report from the Commission to the Council, the European Parliament and the Economic and Social Committee on the application of Directive 89/552/EEC "Television without Frontiers"
Date: 2001-01-15
Institutions: European Commission
Subjects: European television, audiovisual communications policy, audiovisual industry, free movement of programmes

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 15.1.2001
COM(2001) 9 final

THIRD REPORT FROM THE COMMISSION TO THE COUNCIL, THE
EUROPEAN PARLIAMENT AND THE ECONOMIC AND SOCIAL COMMITTEE

on the application of Directive 89/552/EEC "Television without Frontiers"

THIRD REPORT FROM THE COMMISSION TO THE COUNCIL, THE
EUROPEAN PARLIAMENT AND THE ECONOMIC AND SOCIAL COMMITTEE

on the application of Directive 89/552/EEC "Television without Frontiers"

TABLE OF CONTENTS

THIRD REPORT FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN
PARLIAMENT AND THE ECONOMIC AND SOCIAL COMMITTEE on the application of
Directive 89/552/EEC "Television without Frontiers"

1.

2.

3.

4.

4.1.

4.2.

4.3.

4.4.

4.5.

4.6.

5.

6.

7.

Introduction.............................................................................................................. 3

Development of the television market in Europe (1997-2000) .................................. 4

State of play in transposing the revised directive....................................................... 7

Application of the Directive...................................................................................... 7

Principles regarding jurisdiction (Article 2) .............................................................. 7

Events of importance for society (Article 3a)............................................................ 8

Promotion of distribution and production of television programmes (Articles 4 & 5)10

Application of the rules on advertising (Articles 10 to 20) ...................................... 11

Protection of minors and public order (Articles 22 to 22b)...................................... 12

Coordination between national authorities and the Commission.............................. 14

Enlargement: Analysis of audiovisual legislation in the Candidate Countries.......... 15

Cooperation with the Council of Europe................................................................. 16

Conclusions and Prospects ..................................................................................... 17

2

1.

INTRODUCTION

By means of this Communication the Commission is submitting to the European Parliament,
the Council and the Economic and Social Committee the third report on the application of
Directive 89/552/EEC1, as amended by Directive 97/36/EC2, "Television without Frontiers"
(referred to below as 'the Directive').

Article 26 of the Directive provides that, not later than 31 December 2000, and every two
years thereafter, the Commission must submit to the European Parliament, the Council and
the Economic and Social Committee a report on the application of the Directive as amended
and, where appropriate, make further proposals to adapt it to developments in the field of
television broadcasting, in particular in the light of recent technological developments.

The report deals with application of the Directive since it was amended in July 19973 up until
the end of 2000.

The report describes and analyses the salient facts relating to application of the Directive
during the reference period. These cover, in particular, coordination between the national
authorities and the Commission, protection or minors, application of Article 3a on events of
major importance for society, application of the rules on advertising, the stage reached in
transposing the Directive and an analysis of audiovisual legislation in the applicant countries
wishing to join the European Union.

Since this report covers what is basically a period of transition, given that a review of the
Directive's provisions is scheduled for the end of 2002, it makes no new proposals for
amending the Directive. In the interim period the Commission will continue, in a transparent
manner, to hold consultations, especially on how technological developments might affect the
Directive's provisions. In particular, the Commission recently launched several studies in
various fields covered by the Directive4. As part of this drive, public meetings will be
organised, which will be attended inter alia by representatives of Europe's audiovisual
industry. The results of the studies and meetings will provide important feedback for the
Communication reviewing the Directive which the Commission intends to submit to the
Council and Parliament in 2002.

Furthermore, it should be noted that, in keeping with Article 4(3) of the Directive, the
application of Articles 4 and 5 thereof are dealt with in a separate report5. However, Point 4.3.
of this report gives the separate report's main conclusions regarding Articles 4 and 5
(promotion of distribution and production of television programmes) of the Directive.

1

2

3

4

5

OJ L 298/23, 17.10.1989.
OJ L 202/60, 30.07.1997.
The cut-off date for the second application report.
OJ S 149, 05.08.2000.
COM(2000) 442 final.

3

2.

DEVELOPMENT OF THE TELEVISION MARKET IN EUROPE (1997-2000)6

Industry

The television sector, within a larger audiovisual industry, witnessed a period of continuous
development from 1997 to 2000.

Against a background of increased and qualitatively improved availability of transmission and
reception infrastructures, the providers of TV services have developed their offer both in
quantitative and qualitative terms. At the beginning of 2000, over 580 channels with potential
national coverage were broadcast in the EU via terrestrial, satellite or cable means. This
number represents an increase of about 58% and 170% compared to the number of channels
reported at the end of 1998 and 1996 respectively7. Many of the existing channels are
broadcast over more than one type of transmission infrastructure and are regularly received in
more than one EU country, mainly via satellite. This has increased the overall cross-border
features of the audiovisual market. In the small Member States - notably those sharing a
language with other larger Member States - terrestrial and, mainly, cable broadcasting of
foreign channels is fairly common. Around 50 channels target mainly markets in countries
other than their country of establishment. At
the same time 22 digital packages were
distributed, through satellite or cable, in European Union countries, with almost all Member
States counting at least one package. Moreover, three Member States have launched digital
terrestrial TV services since 1998 (United Kingdom, 1998, Sweden, 1999, Spain 2000). Trial
broadcasting of digital
terrestrial programmes is underway in several other European
countries8.

Beside the generalist public and private free-to-air channels (about 83 channels broadcasting a
total of about 550 000 hours per year), a growing number of thematic channels are broadcast
within the packages offered by pay-TV operators, either via satellite or cable networks as well
as by digital terrestrial broadcasting. The programming and marketing of such channels differ
from operator to operator and a precise quantitative assessment of the programming time is
almost impossible. Nevertheless, a reasonable estimate is around 3.5 million broadcast hours
per year. The most popular genres include films, sports, programmes for children, music and
leisure programmes, but more and more channels are dedicated to "niche markets" (such as
training and education, TV series, cartoons, documentaries, history,
travel, videogames,
financial services, home-shopping, religion, erotic and pornographic programmes). Channels
linked to a local audience are also in rapid development and are likely to benefit from the
increased possibilities of transmission through satellite, cable and - in the near future - digital
terrestrial television.

Specialised surveys9 covering the largest markets have recently shown that TV fiction of
national origin tended to prevail during prime time (with limited exceptions such as Italy and
Spain) in 1999, while US fiction continued to fill the other fiction slots of the schedules. The
presence of European non-domestic TV fiction and feature films remained quite limited. As a
consequence of such programming patterns, trade in TV rights with the US in 1998 showed a
deficit of about US $ 2.9 billion (+ 14% vs. 1997) out of a total audiovisual deficit evaluated

6

7

8

9

All the statistical data in this communication were supplied by the European Audiovisual Observatory,
unless otherwise specified.
Commission report on the application of Articles 4 and 5 of the TWF Directive. COM(2000) 442 final.
See also Commission Report on the Development of the Market for Digital TV in the EU in the context
of Directive 95/47/EC.
Report 2000 ‘Television Fiction in Europe’ by Eurofiction.

4

at US $ 6.6 billion. A large part of this deficit was due to the trade in feature films, TV fiction
and cartoons. This trade imbalance continued in 1999.

Audience

Against the steady and diversified increase of supply of TV services, the demand from the
public, the audience, has only marginally increased in recent years without, nevertheless,
showing the contraction of daily viewing time predicted by many analysts in connection with
the development of mass access to the Internet. In actual fact, the proliferation of channels
and delivery platforms has largely contributed to the popularity of TV as an entertainment and
information medium and the number of hours EU citizens spend watching TV has remained
within a range of between about 140 minutes/day (Austria) to about 230 minutes/day (Italy
and Greece).

The audience of public service channels differs widely from country to country: daily market
shares during the first six months of 2000 vary from 2/3 in Denmark10 to 1/10 in Greece. In
1999, the public service channels lost some market share in Austria, Ireland, Spain, UK,
Portugal and Sweden, while in other countries their audience remained stable and even
improved in Belgium.

In almost all Member States the “established” free private channels, which developed in the
mid-80s, are facing the competition of a new type of operator, both free and pay TVs, arriving
on the market through the traditional terrestrial broadcasting pathway (Channel 5 in UK,
Nelonen in Finland) or, more often, through cable and/or satellite.

The audience structure in relation to the transmission mode varies from country to country
and is often the consequence of the development models followed since the Sixties and
Seventies. Germany, where cable and satellite reception is widely developed, has the most
fragmented market. In the United Kingdom the market share of channels with no terrestrial
transmission is above 11%, while in France it has reached about 7% and about 10% in
Germany during the first six months of 2000. In Belgium and the Netherlands, where cable
distribution is widespread, terrestrial broadcasting is almost limited to the public service
channels while all the major commercial broadcasters are exclusively transmitted by cable. In
these countries,
too, the public service programmes are followed by the public almost
exclusively via cable. By contrast, in Italy cable transmission is almost non-existent, satellite
reception is mainly driven by pay TV and both the public service and commercial channels
are generally received via terrestrial transmission.

The development of pay television has been boosted in most European countries by the
progressive availability of digital transmission techniques via satellite and cable, as well as
the supply of packages offering premium and thematic channels. Subscribers to pay-TV
premium services were estimated at over 18 million at the end of 1999, while 13 million
households are equipped to receive digital programmes.

Overall value of the market

Almost all EU households are equipped with TV sets (over 152 million in 2000, +12 million
vs. 1997) and the number of 16:9 TV sets is expanding (about 5.5 million at the end of 1999).
The number of households equipped to receive direct satellite broadcasting (and which are,
therefore, able to have access to radio and other distant broadcasting services) increased to a

10

This estimate includes data referring to TV2, a mixed public/private broadcaster.

5

share of 18% of all households, while TV cable connections reached about 29% of all
households. Cable networks are considered to be strategic by several operators in view of the
possibility of providing their customers with a large range of services in a soon-to-be all-
digital environment: easy access to TV interactivity, to the Internet and voice telephony.
Households with access to the Internet was put at 12% of all EU households in mid-199911.

The overall turnover of the TV and radio broadcasting sector in the European Union in 1998
has been estimated by the European Audiovisual Observatory at about
48 billion, compared
with

44 billion in 1997 (+ 9.1%).

€

€

€

Advertising remains the main financing source for EU TV broadcasters. After several years of
uninterrupted expansion, the gross TV advertising market for private and public service
operators can be estimated at about
23.2 billion in 1999, (+ 13.4% vs. 1998). Forecasts
predict a further increase of 8.8% in 2000 and 6.8% in 200112. The positive trend in the
expansion of the number of pay-TV subscriptions has also boosted the net revenues of such
channels to an overall amount of
7.3 billion in 1998, an increase of 22% versus the previous
year. Although complete data are not available for 1999, a growth rate of around 18% seems
likely.

€

The public service broadcasters continue to be funded mostly through the licence fees paid by
viewers. The total revenues of radio-television public services in 1998 totalled
23.8 billion
(+ 4.2% vs. 1997). Grants and loan guarantees remain an important form of financing for
some public broadcasters (Spain, Portugal), while in the Netherlands the licence fee was
replaced by funding through the general taxation system as of the beginning of 2000. The
share of commercial revenues of the public service broadcasters is increasing in several
countries (Belgium, Denmark, Spain, Italy, Sweden) and accounts, in general, for 1/3 of total
revenues. By contrast, in Germany, and more recently in France, the policy followed has put
more emphasis on systems based on licence fees as the main source of revenues necessary to
fulfil the public service remit.

€

Company concentration

In order to respond to the challenge linked to technological developments, several private
broadcasters have followed a policy of strategic alliances and mergers both within the
audiovisual sector and with partners in neighbouring segments or markets such as the Internet
and telecoms. Many such alliances aim to create synergies between audiovisual content
providers and audiovisual services distributors.

The most significant event was probably the merger of the audiovisual activities of the
Pearson Group with CLT-UFA13, with the later increase of the RTL Group's participation in
the Spanish private channel Antena 3. The reorganisation of the Kirch Gruppe has allowed
further alliance of the German companies with the Italian Mediaset14 and the British BSkyB15.
The Commission was able to accept the BSkyB/Kirch joint venture subject to commitments
agreed with the parties. These provide access to proprietary technologies and ensure
migration to open standards in order to prevent market foreclosure via the creation or
strengthening of a dominant position. In Germany Sat.1 and PRO Sieben have been merged

11

12

13

14

15

Telecommunication survey 1999 by Gallup Europe.
European Advertising and Media Forecast, September 2000 by NTC.
Commission Decision of 29.6.2000: Comp/M. 1958/Bertelsmann/GBL/Pearson TV. IP/00/691.
Commission Decision of 3.8.1999: Comp/JV. 1574/Kirch/Mediaset. IP/99/611.
Commission Decision of 21.3.2000: Comp/JV. 37/BSkyB/Kirch PayTV. IP/00/279.

6

into one company. In the UK, the concentration process of the ITV network has been
accelerated by Granada's takeover of United News and Media. Last but not least, the merger
between Vivendi and the Canadian company Seagram (owner of Universal Studios)16 has
forged a transatlantic alliance placing the various CANAL+ channels in a new situation.

3.

STATE OF PLAY IN TRANSPOSING THE REVISED DIRECTIVE

As the Guardian of the Treaties, the Commission's first priority is to ensure that Directive
97/36/EC of 30 June 1997, which amended the 1989 Directive, is transposed correctly. The
transposal date laid down in the Directive was 30 December 1998.

At the time this report was adopted, 12 Member States (Belgium, Denmark, Germany,
Greece, Spain, France, Ireland, Austria, Portugal, Finland, Sweden, United Kingdom) had
given notification of the national measures implementing Directive 97/36/EC. Transposal is
under way in the three other Member States (Italy, Luxembourg, Netherlands). The
Commission has initiated proceedings on this score before the Court of Justice of the
European Communities17.

4.

APPLICATION OF THE DIRECTIVE

4.1.

Principles regarding jurisdiction (Article 2)

The revised Directive lays down a firm legal framework allowing television operators to
develop their activities in the European Union. The main objective is to create the necessary
conditions for free movement of tv broadcasts. The revised Directive has spelled out and
clarified a number of provisions, including the principle of regulation only in the originating
Member State and the criteria for making broadcasters subject to that State's legal system. The
Commission has monitored compliance with and the effectiveness of these principles during
the reference period.

that

As a result, the Commission instituted infringement proceedings against Belgium (press
release of 5 July 1999, IP/99/455) because it felt that the Flemish audiovisual authorities had
exceeded their powers. The Commission felt
the decision taken by the Vlaams
Commissariaat voor de media obliging channel VT4, which comes under British jurisdiction,
to submit a request for authorisation to it, infringed - on the one hand - the Directive's rules on
legal jurisdiction, which state that only the State of establishment of the broadcaster has the
powers to control it, and - on the other - Article 10 of the EC Treaty. The Commission also
felt that the contested decision was incompatible with European Court of Justice case law,
which says that the powers of the receiving Member State should be limited to verifying that
the broadcasts in question actually emanate from another Member State (Case C-11/95 –
judgment of 10 September 1996). Furthermore, the Commission was informed of the Dutch
authorities' decision (Commissariaat voor de Media) to ban the distribution of RTL 4 and
RTL 5 programmes to the Netherlands unless RTL/Veronica De Holland Media Groep SA
obtained Dutch licences for these television channels. The Commission is closely watching
developments on this.

16

17

Commission Decision of 13.10.2000: Comp/m. 2050/Vivendi/Seagram/Canal+. IP/00/1162.
CEC/Italy: Case C-2000/207; CEC/Luxembourg: Case C-2000/119; CEC/Netherlands: C-2000/145.

7

4.2.

Events of importance for society (Article 3a)

Article 3a(1) of the Directive provides Member States with a legal basis for taking national
measures with a view to protecting designated events of major importance for society.
Consequently, Article 3a(1) constitutes a voluntary provision, which may or may not be
implemented by the respective Member State. Article 3a(2) describes the procedure for
obtaining a preliminary assessment by the Commission that the measures taken appear to be
in conformity with Community law: in this respect, the measures taken pursuant to Article
3a(1) are to be notified immediately to the Commission. Within three months the Commission
has to verify that the measures taken are compatible with Community law, communicate them
to the other Member States and seek the opinion of the Contact Committee. Once the
measures have been evaluated along the lines mentioned above (conformity with Community
law), they are to be published in the Official Journal of the European Communities.

Article 3a(3) of the Directive sets out a system aimed at avoiding circumvention of a
particular Member State’s legislation by broadcasters subject to another Member State's
jurisdiction. In this respect, the paragraph is part of the acquis created by the Directive and
therefore, in contrast to Article 3a(1) and (2), mandatory in relation to every Member State.

As regards the examination procedure, the following practice has been established. Formal
notification is preceded by informal bilateral
talks between the Commission and the
respective Member State in order to carry out a preliminary assessment of the measures
envisaged. This procedure is advisable to avoid multiple national procedures. The measures
taken by the Member States normally consist of drawing up a list of events of major
importance for society plus a set of accompanying measures.

By 24 October 2000 measures in relation to Article 3a(1) of the Directive have been taken by
Denmark, Italy, Germany and the United Kingdom. Furthermore, Austria, the Netherlands,
Belgium and France have indicated that they intend to notify draft measures in the near future.

to Article 3a(1) of the Directive to the
Denmark notified measures taken pursuant
Commission on 14 December 1998, and the Contact Committee raised no objections to these
in its Opinion of 13 January 1999.

The measures are defined in the "Order No 809 on the use of TV rights to events of major
importance for society" of November 1998, whereby 10% of the public is defined as a
substantial proportion which must not be deprived of the right to follow an event.

The listed events are: the Summer and Winter Olympic Games in their entirety; World and
European football men’s championship: all matches with Danish participation together with
semi-finals and finals; World and European handball championships (men and women): all
matches with Danish participation together with semi-finals and finals; Denmark's world and
European championship qualifying matches in football (men); Denmark's world and European
championship qualifying matches in handball (women). The measures were published in the
Official Journal of the European Communities on 21.07.200018.

Germany notified draft measures to be taken pursuant to Article 3a(1) of the Directive to the
Commission on 28 April 1999, and the Contact Committee raised no objections in its Opinion

18

OJ C 209, 21.7.2000, p. 3.

8

of 7 July 1999. The entry into force of the draft measures was notified to the Commission by
letter of 5 September 2000.

The measures are laid down in Paragraph 5a of the "Vierter Rundfunkänderungsstaatsvertrag"
to the Inter-Länder Treaty on Broadcasting). According to German
(4th amendment
legislation, a third of households constitutes a “substantial proportion of the public”.

The listed events are:
the Summer and Winter Olympic Games; World and European
championships - all matches with German participation, together with the opening game, the
semi-finals and the Final; the semi-finals and the Final of the German FA Cup; the German
national football team’s home and away matches; the finals of European football club
competitions (Champions League, UEFA Cup) with German participation. The measures
were published in the Official Journal of the European Communities on 29 September 200019.

Italy notified measures taken pursuant to Article 3a(1) of the Directive to the Commission on
10 May 1999, and the Contact Committee raised no objections in its Opinion of 7 July.

The measures taken by Italy are laid down in the "Delibera n° 8/1999 dell'Autorità per le
garanzie nelle comunicazioni" (Decision No 8/1999 of the Communications Authority). A
substantial proportion of the public is defined as 10%.

The list includes the following events: the Summer and Winter Olympic Games; the football
World Cup Final and all World Cup championship matches involving the Italian national
team; the European Football Championship Final and all European Football Championship
matches involving the Italian national team; all matches involving the Italian national football
team, at home and away, in official competitions; the Final and the semi-finals of the
Champions League and the UEFA Cup where an Italian team is involved; the Tour of Italy
(Giro d'Italia) cycling competition; the Formula One Italian Grand Prix; the San Remo Italian
music festival. The measures were published in the Official Journal of the European
Communities on 21 July 200020.

The United Kingdom notified measures taken pursuant to Article 3a(1) of the Directive to
the Commission on 5 May 2000, and the Contact Committee raised no objections in its
Opinion of 6 June 2000.

The measures taken by the United Kingdom are laid down in: Part IV of the Broadcasting Act
1996, the Television Broadcasting Regulations 2000, the Independent Commission's Code on
Sport and other Listed Events and several declarations by the Secretary of State for Culture,
Media and Sports. According to UK legislation, a substantial part of the public is defined as
5%. The list consists of two parts: the events listed in Group A are to be covered live, whereas
Group B events are subject to secondary coverage. In this respect, minimum requirements
regarding secondary coverage (minimum length, maximum delay in relation to the event)
have been defined.

The list of Group A events includes: the Olympic Games; the FIFA World Cup Finals
Tournament; the FA Cup Final; the Scottish FA Cup Final (in Scotland); the Grand National;
the Derby;
the European Football Championship Finals
Tournament; the Rugby League Challenge Cup Final; the Rugby World Cup Final.

the Wimbledon Tennis Finals;

19

20

OJ C 277, 29.9.2000, p. 4.
OJ C 209, 21.07.2000, p. 5.

9

The list of Group B events for secondary coverage include: Cricket Test matches played in
England; non-Finals play in the Wimbledon Tournament, all other matches in the Rugby
World Cup Finals Tournament; Five Nations Rugby Tournament Matches involving home
countries; the Commonwealth Games; the World Athletics Championship; the Final, the
semi-finals and matches of the Cricket World Cup involving home nation teams; the Ryder
Cup; the Open Golf Championship. The measures were published in the Official Journal of
the European Communities on 18 November 200021.

In accordance with Article 3a(2) of the Directive, a consolidated list of the measures taken by
Member States has been published in the Official Journal of the European Communities22.
The next such publication is planned for the end of 2000.

Implementation of Article 3a(3) of the Directive is, as already mentioned, mandatory for all
Member States. Its effective implementation is essential to ensure that Member States’
specific provisions with regard to events of major
importance, as permitted under
Article 3a(1), are not undermined by broadcasters coming under the jurisdiction of other
Member States. In three cases, broadcasters under the jurisdiction of the United Kingdom
have broadcast events listed by Denmark in a way that prevented a substantial part of the
Danish population from seeing these events. Two of theses cases are currently subject to
judicial review in the United Kingdom. The Commission is closely monitoring the
development of theses cases. Furthermore,
the interpretation of Article 3a(3) and its
application by the Member States are being examined by the Commission, the aim being to
draw up guidelines on Article 3a(3).

4.3.

Promotion of distribution and production of television programmes (Articles 4
& 5)

The Commission adopted the fourth Communication to the Council and the European
Parliament on application of Articles 4 and 5 of Directive 89/552/EEC, as amended by
Directive 97/36/EC, for the period 1997-8 on promoting distribution and production of
television programmes23. These Articles state that broadcasters should, whenever practicable,
reserve a majority proportion of their transmission time for European works, and 10% of their
air time - or 10% of their programming budget - to European works made by producers
independent of broadcasting organisations.

The Communication consists of three chapters and three Annexes.
I the
Commission gives its opinion on application of Articles 4 and 5 in 1997 and 1998. The other
two chapters contain summaries of the national reports sent in by the Member States and by
those European Free Trade Association (EFTA) states that form part of the European
Economic Area (EEA).

In Chapter

The first annex sets out the suggested new guidelines for monitoring application of the
Directive; the second lists the channels not achieving the target for European works and/or
broadcasts of independent productions; and finally, the third annex gives the parameters used
to calculate the weighted averages of European works broadcast.

The Commission notes that the objectives of Articles 4 and 5 of the Directive have been
generally achieved. The weighted average of European works broadcast by the major

21

22

23

OJ C 328, 18.11.2000, p. 2.
OJ C 209, 21.7.2000, p. 3.
COM(2000) 442 final.

10

channels varies from 53.3% to 81.7 %, except for Portugal where the figure is 43%. It should
be noted that most of the Member States have introduced legislation that is more rigorous
than that contained in the Directive.

the television channels' broadcasting of European works and independent
Overall,
productions satisfactorily complies with the rules contained in the Directive, and the aims of
the Directive have been generally achieved. Progress was made in broadcasts of European
works in the recent period as compared with the 1997/98 period. The report records the
reasons given by the channels failing to meet the obligations set out in the Directive.

Among the reasons given by the channels failing to meet their obligations, the following are
worthy of particular mention: the newness of certain channels and their resulting financial
fragility, the difficulty of finding or producing European works for thematic channels, and the
fact that certain channels are subsidiaries of third-country organisations, which mainly draw
on their own stocks.

Furthermore, the Commission has announced its intention, in accordance with Article 26 of
the Directive, to review all the Directive's provisions in 2002, and this will involve
consultation with all interested parties.

4.4.

Application of the rules on advertising (Articles 10 to 20)

The Directive lays down rules concerning the amount of advertising permitted on screen
(daily and hourly limits, Article 18), the number of and form of advertising interruptions
(Article 11), and rules applicable to the content and presentation of advertising messages
(Articles 10, 12, 13, 14, 15 and 16). Specific rules (Article 17) are applied to sponsorship.

The Commission received several complaints about alleged failure in certain Member States
to comply with the rules on advertising and sponsorship. In addition, the Commission had
addressed to it several parliamentary questions concerning compliance with these provisions
in Member States.

The complaints – often coming from consumers' associations – report that the quantitative
ceilings are being systematically exceeded. The problems particularly concern the practices of
certain broadcasters in Greece, Spain, Italy and Portugal. The Commission is in the process of
gathering the information it needs to assess the extent to which these alleged excesses could
constitute infringements by the Member States concerned, with a view to taking the relevant
corrective measures.

What is more, as regards application of the provisions in Directive 89/552/EEC not amended
by Directive 97/36, infringement proceedings, for poor application, have been initiated in
three cases concerning Greece, Spain and Italy (for non-compliance with the provisions on
advertising).

Also, in its judgment of 28 October 1998 (Case C-6/98, PRO Sieben Media AG) concerning
the restriction on broadcast time devoted to advertising, the Court of Justice ruled that
Article 11(3) of the Directive should be construed as prescribing the gross principle, so that,
in order to calculate the 45-minute period for the purpose of determining the number of
advertising interruptions allowed in the broadcasting of audiovisual works such as feature
films and films made for television, the duration of the advertisements must be included in
that period. This judgment confirms the Commission's interpretation of this article in the
Directive.

11

The Commission would point out that each Member States has an obligation to ensure that all
the rules of the
programmes transmitted by broadcasters under its jurisdiction respect
Directive and, more generally, the law applicable to programmes intended for an audience in
that Member State.

Furthermore, the Commission recently launched a study on developments in new advertising
techniques. The aim is to allow the Commission to gain an overall and accurate picture of the
current situation and probable developments in advertising, sponsorship and teleshopping
methods in the various media, i.e. television, radio, cinema and the Internet.

The Commission considers it an absolute priority to create a real level playing field between
operators established in the different Member States, along with a level of protection of the
interests of television viewers in the Union which is at that of the Directive. It intends to equip
itself with the means to increase its capacity for monitoring complaints and checking
implementation of Community law in this field.

4.5.

Protection of minors and public order (Articles 22 to 22b)

As an exception to the general rule of freedom of reception and non-restriction of
retransmission, Article 2a(2) of the Directive allows the Member States - provided that they
respect a special procedure - to take measures against broadcasters under the jurisdiction of
another Member State who "manifestly, seriously and gravely" infringe Article 22 of the
Directive. This is designed to protect minors from programmes which could seriously impair
their "physical, mental or moral development", and to ensure that broadcasts do not contain
any incitement to hatred on grounds of race, sex, religion or nationality.

The Member State concerned must notify the television broadcaster and the Commission in
intends to take if any such
writing of the alleged infringements and the measures it
infringement occurs again.

Consultations must be undertaken. If they do not produce an amicable settlement within 15
days of the notification, and the alleged infringement persists, the receiving Member State
may take unilateral provisional measures against the channel concerned.

The Commission must decide whether the measures taken are compatible with Community
law, within two months following notification of the measures taken by the Member State. If
it decides that they are not, it may require the Member State to put an end to the measures in
question as a matter of urgency.

During the period in question, only one Member State (the United Kingdom) felt it was
necessary to have recourse, on one occasion, to this procedure.

The consultations did not produce a settlement and the British authorities considered it
necessary to adopt a prohibition order against the channel, which was under the jurisdiction of
another Member State.

Following contacts with the Member States concerned and after considering the effects of the
measures communicated by the United Kingdom, the Commission held, in December 1998,
that these measures were compatible with Community law. This judgment was largely based
on a test of proportionality and on an assessment of the possible discriminatory effects of the

12

measures.The broadcaster concerned has appealed against this decision to the Court of First
Instance which held on 13th December that the application was inadmissable24.

The Commission considers application of Article 2a(2) in the reference period to have been
satisfactory. It has protected the general interest with a minimum of restriction on freedom to
provide services.

However, the Commission would stress that its assessment of the measures taken under
Article 2a(2) is based on factual and legal considerations; the moral assessment of the content
of the programmes depends on the judgment of each Member State, which has the principal
responsibility for authorising or prohibiting the transmission of certain television programmes
by broadcasters under its jurisdiction who may be caught by Article 22. The Directive
anticipates the possibility of a difference in judgment between the authorities of the
originating country and those of the receiving country.

Furthermore, the measures taken by the receiving Member State are without prejudice to
those taken, if necessary, by the Member State which has jurisdiction over the broadcaster in
question. It is not, therefore, a question of transferring jurisdiction from one State to another,
but of an exceptional possibility offered to the receiving Member State to take measures to
protect its interest in situations of incontestable gravity, according to a precise procedure.

It is also important to highlight the fact that, in the system of Community rules created by the
Directive (Article 2a(1)), Member States are not permitted to apply discriminatory moral
criteria to the broadcasters under their jurisdiction: a stricter attitude to programmes to be
received in their territory and a more lenient attitude to programmes destined to be broadcast
abroad (typically, satellite channel programmes) would not be acceptable. On the contrary, the
Member States are bound to ensure that all broadcasters under their jurisdiction comply with
Article 22.

Article 22b study on parental control of Television Broadcasting

On 12 July 1999 the Commission issued a Communication on the results of a study on
Parental Control of Television Broadcasting25. This study had been carried out pursuant to
Article 22b(2) of the Directive (as revised). It considered, inter alia, the desirability of:

the requirement for television sets to be equipped with technical filtering devices;

the setting up of appropriate rating systems26,

encouraging family viewing policies and educational and awareness measures.

The study was published on the World Wide Web on 19 march 199927. The main findings are:

Children are watching more television alone and the number of television channels has
increased to the point where it is difficult for regulators to monitor them. Digital technology
allows viewers to arrange their own viewing schedules, and broadcasting on the Internet
makes monitoring impossible.

24

25

26

27

T 69/99 Danish Satellite TV (DSTV) A/S (Eurotica Rendez-Vous Television) v. CEC 13/12/00
Communication on the Study on Parental Control of Television Broadcasting COM/99/0371 final,
19.07.1999.
Rating systems assess the suitability of media (in this case television) content for particular age groups.
http://europa.eu.int/comm/dg10/avpolicy/key_doc/parental_control/index.html.

13

The V-chip technology adopted in North America is technically unsuited for Europe. It is
becoming obsolete, because it is based on analogue technology. Digital broadcasting offers
much more sophisticated and reliable means
filtering and blocking unsuitable
programming.

for

Technical devices cannot substitute entirely for broadcaster responsibility.

Set-top boxes and digital televisions should be interoperable, so that different filtering and
blocking software can be installed on all of them. Cultural differences rule out a harmonised
rating system, but digital technology would allow for a flexible and culture-specific approach
to filter systems.

There is a great need for awareness-raising and educational actions with regard to harmful
audiovisual content, in all its forms, and the protection systems in place.

Finally, there is a need for greater coherence in the rating systems for television, cinema,
video, the Internet and video games.

The Commission, as a first step, consulted the DVB28 on the technical implications of the
study. The DVB, wishing to give a comprehensive reply to the Commission, has carried out a
follow-up study to investigate the options for a coherent approach to rating and filtering in
broadcasting and on the Internet. This follow-up study proposes several options for achieving
this goal and the Commission will, in turn, take this forward in the context of its work on the
Council Recommendation on the protection of minors and human dignity29 and the Action
Plan on Safer Use of the Internet30. Further details in this respect will be given in the
Commission’s evaluative report on the Council Recommendation31.

The European Parliament adopted on 5 October 2000 a resolution32 on the abovementioned
Communication on the results of a study on Parental Control of Television Broadcasting.

4.6.

Coordination between national authorities and the Commission

Application of the rules of the Directive is the responsibility of each Member State's national
(ministries and/or
authorities
regulating the
independent authorities)
industry. Systematic contact with the national bodies (ministries and/or
audiovisual
independent regulatory authorities) has been maintained, particularly through the Contact
Committee set up by the Directive. This Committee, which is composed of representatives of
Member States' competent authorities, is chaired by a Commission representative and meets
either on his initiative or at the request of the delegation of a Member State. The Committee
has fulfilled the tasks conferred on it by the Directive, and has, in particular, facilitated
effective implementation of the Directive; it has delivered opinions, especially under the

responsible for

28

29

30

31

32

The Digital Video Broadcasting Project - a global consortium with a membership of over 220
broadcasters, manufacturers, network operators and regulatory bodies in more than 30 countries.
Council Recommendation of 24 September 1998 on the development of the competitiveness of the
European audiovisual and information services industry by promoting national frameworks aimed at
achieving a comparable and effective level of protection of minors and human dignity (OJ L 270,
07.10.1998, p. 48).
Decision 276/1999/EC of The European Parliament and of the Council of 25 January 1999 adopting a
Multiannual Community Action Plan on promoting safer use of the Internet by combating illegal and
harmful content on global networks.
To be adopted at the beginning of 2001.
European Parliament Resolution A5-0258/2000, 5.10.2000.

14

procedure laid down in Article 3a(2) concerning events of major importance for society (see
Point 4.2), and facilitated the exchange of information between Member States and the
Commission on the situation and developments in the sector.

The Commission's activities involving coordination with the national bodies in the
audiovisual field also took place within the framework of the European Platform of
Regulatory Authorities (EPRA) set up in April 1995 in Malta with the aim of providing
regulatory authority representatives with a forum for discussion and mutual exchange of
views on regulatory matters in the audiovisual field, both Europe-wide and national. What is
more, the Commission has also contributed financially to setting up EPRA's website. EPRA
currently has 34 members33. The European Commission (Education & Culture DG) and the
Council of Europe (Media Division) have permanent-observer status. The Commission
actively participates in the Platform's meetings and activities, chiefly in order to boost
cooperation among the European regulatory authorities.

EPRA has held 12 meetings, the last one in Bratislava on 26 and 27 October 2000.

5.

ENLARGEMENT: ANALYSIS OF AUDIOVISUAL LEGISLATION IN THE CANDIDATE
COUNTRIES

Since 1997, most of the candidate countries have been working to bring themselves into line
with the Directive, and new legislation has been enacted in eight candidate countries34 to this
end. Furthermore, the legislative process is under way in six candidate countries35.

Mainly due to the fact that any review of national broadcasting legislation is a complex and
sensitive exercise encompassing political and technical issues which go far beyond the scope
of the Community acquis, progress was relatively slow in the beginning of the reference
period. In Central and Eastern Europe, for example, many issues are at stake at the same time:
transforming the state television into a modern public service television, creating or
reinforcing broadcasting regulatory authorities, defining a licensing mechanism, developing
the task of aligning
support mechanisms for the creation of local content. Most often,
broadcasting legislation with the acquis has been delayed by such legitimate internal political
debates.

However, the year 2000 already appears to be a turning point in this alignment process. Five
candidate countries36 have already achieved a very high degree of alignment with the acquis.
Other legislative initiatives are under way, which should lead to new legislation before the
end of the year.

For a majority of candidate countries, the priority will now shift from alignment efforts to
implementation of the acquis. In this respect, efforts will probably be needed in candidate
countries.

33

34

35

36

the audiovisual

Representatives of
Association, Central and Eastern European Countries).
Bulgaria, Cyprus, Estonia, Latvia, Lithuania, Malta, Poland and Slovak Republic.
Czech Republic, Hungary, Latvia, Poland, Romania, Slovenia.
Bulgaria, Cyprus, Estonia, Lithuania and Slovak Republic.

regulatory bodies (European Union, European Free Trade

15

6.

COOPERATION WITH THE COUNCIL OF EUROPE

The aim of the Council of Europe Member States when drawing up the European Convention
on Transfrontier Television in 1989 was to bolster the free flow of information and ideas by
encouraging transfrontier movement of television programme services on the basis of certain
common rules.

These rules were intended to ensure that free transfrontier movement of television programme
services promotes the fundamental values common to the Council of Europe Member States,
in particular pluralism of ideas and opinions. The Convention constitutes a set of basic
common rules for harmonious development of transfrontier television programme services. It
confirms the guarantee of reception and establishes the principle of non-restriction of
retransmission of programme services which conform to the common rules as mentioned.

The European Convention on Transfrontier Television was opened for signing on 5 May 1989
by the Council of Europe's Committee of Ministers. It came into force on 1 May 1993.

Given the major technical and economic developments occurring in television broadcasting
and the appearance of new communication services in Europe since the Convention was
adopted in 1989, and bearing in mind that the European Community had adopted Directive
97/36/EC of the European Parliament and Council of 30 June 1997 amending Directive
89/552/EEC, the Council of Europe saw an urgent need to amend some of the Convention's
provisions in order to develop a coherent approach to transfrontier television between the
Convention and the revised Directive.

The Protocol amending the Convention was adopted by the Committee of Ministers on
9 September 1998 and was opened for acceptance by the Parties to the Convention on
1 October 1998.

The Protocol takes effect when all the Parties to the current Convention have accepted it, or
alternatively, two years after it has been opened for acceptance (i.e. 1 October 2000) unless a
State which is already a Party to the Convention has lodged an objection against such
automatic entry into force. Only France had lodged an objection prior to the date in question.

The Commission has played an active role in the activities of the Standing Committee on
Transfrontier Television (its task is to monitor application of the Convention and suggest,
where appropriate, amendments to it), the main aim being to ensure consistency between the
provisions of the European Convention on Transfrontier Television and those set out in the
"Television without Frontiers" Directive. This objective - which was politically and legally
very important, inter alia allowing its geographical scope to be extended to cover regulation
of such matters in Central and Eastern Europe - has been achieved.

Furthermore, following the Council Decision of 22 November 199937 on formalising
Community participation in the European Audiovisual Observatory (EAO), the Commission -
as the Community's representative - formally applied for membership of the Observatory on
16 November 2000 after the necessary amendments had been made to the EAO's statute and
financial regulation. It also stepped up its operational contacts with the Observatory,
especially in connection with analysing developments on the audiovisual market in the Union,
the other countries of Europe and the rest of the world.

37

OJ L 307, 02.12.1999, p. 61.

16

7.

CONCLUSIONS AND PROSPECTS

The Directive continues to function effectively as a means of ensuring the freedom to provide
television services in the Community. Beyond the final control of the transposition of the
Directive, the Commission continues to verify its effective implementation and takes action
where necessary to ensure it. The separate report on the application of Articles 4 and 5 of the
Directive38
indicated generally satisfactory results in terms of channels meeting the
requirements concerning European works. Certain kinds of channels, in particular newer ones
and special-interest channels, have difficulties in meeting these requirements.

Whilst the Directive is currently achieving its objective, it is clear that, largely as a result of
the introduction of digital technology and the development of the Internet, broadcasting is
undergoing a profound change. These changes are described briefly in section 2. The nature
of these developments is such as to call for a review of certain provisions in the Directive. For
example, digital technology permits a wide range of new advertising techniques for which the
current provisions may not be appropriate. Digital technology also allows for a vast increase
in the number of available channels, and hard-disk recording technologies allow viewers to
effectively construct their own viewing schedules. Increased viewer control has the potential
to alter usage patterns and may have implications for the measures in the Directive concerning
the promotion of European works, for example.

The next report on the application of the Directive is due by 31 December 2002. In order to
ascertain more precisely the impact – both potential and actual – of technological and market
developments, the Commission will carry out a full review of the Directive by this date.

For the purposes of this review, the Commission has launched three major studies in the fields
covered by the Directive. The first of these will evaluate the impact of measures to promote
the distribution and production of European television programmes. It will, in particular,
evaluate the effectiveness of the quotas in the Directive as compared with other measures. The
second study will be a very broad one. It will analyse the recent technological and market
developments in the sector and attempt to identify cause-and-effect relationships. It will
provide the Commission with a set of likely scenarios for the future development of the
market. The third study will examine the development of new advertising techniques, in
particular regarding how separation between advertising and other forms of content could be
achieved.

The review will also take into account other consumer concerns, such as interoperability and
conditional access systems, as well as the implications for consumers of the switch to digital
broadcasting. In this respect it should be noted that the Commission has already, in its
package of proposals concerning electronic communications adopted on 12 July 2000,
proposed a new Directive which would cover conditional access systems and other associated
facilities39.

The Commission will conduct this review in a fully open manner. It will seek the views of all
interested parties. The studies mentioned above, for example, include an obligation for the
contractor to conduct a series of workshops in Brussels during the course of 2001 in order to
allow for input from all concerned. At the beginning of 2002, the Commission will publish a

38

39

Fourth Communication from the Commission to the Council on the application of Articles 4 and 5 of
Directive 89/552/EEC “Television without Frontiers” for the period 1997-8, COM (2000) 442 final.
Proposal for a Directive of the European Parliament and the Council on access to, and interconnection
of, electronic communications networks and associated facilities, COM (2000) 384, 12 July 2000.

17

consultation document based on the results of the studies. It will invite written comments
from all interested parties and will, in addition, conduct a series of hearings in 2002. The
results of the studies and the consultation will provide the necessary elements and information
for the next report on the application of the directive. This will include any proposals for
amending the Directive which the Commission considers necessary, in particular in the light
of market and technological developments.

18