CELEX: 51991PC0276
Language: en
Date: 1991-09-11
Title: PROPOSAL FOR A COUNCIL DIRECTIVE ON THE COORDINATION OF CERTAIN RULES CONCERNING COPYRIGHT AND NEIGHBOURING RIGHTS APPLICABLE TO SATELLITE BROADCASTING AND CABLE RETRANSMISSION

COMMISSION OF THE EUROPEAN CQMVIUNITIES
                                          C0M(91) 276 final - SYN 358
                                          Brussels, 11 September 1991
                          Proposal for a
                        COUNCIL DIRECTIVE
   on the coordination of certain rules concerning copyright
  and neighbouring rights applicable to satellite broadcasting
                    and cable retransmission
                  (presented by the Commission)
 ---pagebreak---                                            2 -
                                       CONTENTS
   SUMMARY
   EXPLANATORY MEMORANDUM
   PART ONE: GENERAL
   A.    INTRODUCTION
   B.   THE NEED FOR ACTION ON THE PART OF THE COMMUNITY AND THE PURPOSE OF
        THE DIRECTIVE PROPOSED:
         I. The legal position in the Member States and under international law
             Satellite broadcasting
             Cable retransmission
         II.    The need for action at Community level
             Satellite broadcasting
            Cable retransmission
            Summary
   C.   TYPE OF HARMONISATION SOUGHT
   D.   LEGAL BASIS
   PART TWO:    PARTICULAR PROVISIONS
   Chapter I:      Definitions
   Chapter II:     Broadcasting by satellite
   Chapter III:    Cable retransmission
   Chapter IV:     General provisions
   PROPOSAL FOR A COUNCIL DIRECTIVE
2)
 ---pagebreak---                                      - 3 -
                                    SUMMARY
The draft proposal intends to provide a missing element in the creation of
the European audiovisual     area, since  the directive   "Television  without
Frontiers" has been adopted on 3 October 1989 without a chapter relating to
questions of copyright.
In its communication on audiovisual policy COM(90)78 final of 21 February
1990 the Commission confirmed that the single European audiovisual        area
required a set of common rules in the field of copyright.       The Commission
observed:
"The legal framework established by the Directive (Television without
Frontiers) still has to be amplified on the question of copyright. At a
time when cross-frontier broadcasting has, as a result of technology,
become a reality and, by legislation a free right, this exercise must be
accompanied by an effective protection of copyright in all the Member
States in order that the holders of such rights may benefit fully from the
European dimension of broadcasting".
The Commission published a discussion paper on "Broadcasting and Copyright
in the   Internal  Market"   in November   1990 which was   submitted  to  the
professionals and formed the subject of a     hearing on 5 February 1991. The
present   draft proposal reflects the outcome of this consultation process.
The draft proposal covers two distinct areas: satellite broadcasting and
cable retransmission.
Satellite broadcasting
Satellite broadcasting by     its very nature   is "transnational".   However,
national copyright   legislation in most cases is only inadequately adapted
to the new technological reality.     Legal  insecurity as to where and when
 ---pagebreak---                                        - 4 -
 and how satellite broadcasting      involves copyright has seriously hampered
 satellite broadcasting to develop satisfactorily.       This was detrimental not
 only to broadcasters wishing to transmit their programme by satellite but
 also   to  rightholders    such  as  authors,   performing   artists,  phonogram
 producers and film producers who wished to exploit their rights by way of
satellite broadcasting.
The draft proposal seeks to limit this legal gap by proposing a "two-legged
solution".
 In the first     place, the draft   proposal  defines at Community-1 eve I what
constitutes the act of satellite broadcasting for copyright purposes and,
therefore, requires authorization of the rightholders.         As a consequence,
the authorization to transmit protected works by satellite must be acquired
 in the country of establishment of the broadcaster while the remuneration
should be paid according to the actual or potential audience (which might
well be situated in several countries).
Yet, it has to be avoided that one "country of establishment" decides to
create a copyright haven which would receive all the satellite broadcasters
within the Community, leaving the creative professions without protection.
The   "second   leg" of   the  draft  proposal,   therefore,  provides  a  common
minimum standard of protection for authors, performing artists, phonogram
producers and broadcasters throughout the Community.
Cable retransmission
Legal insecurity prevailing in the field of cable retransmission of foreign
television broadcasts     is of a different nature than that     in the field of
satellite broadcasting.
Cable retransmission of television broadcasts constitutes an act subject to
copyright, that     is prior authorization of right-owners.      However,  in the
case of a simultaneous, unaltered and unabridged cable retransmission it is
impossible    for   the cable-operator   to  acquire   the  necessary  rights  in
advance for lack of information about both content and identity of right-
owners of the retransmitted programme.
 ---pagebreak---                                          - 5 -
The way out of this dilemma has been shown by contractual practice in the
most  cabled Member      States such   as Belgium,    the Netherlands     and, partly
Germany.   In those countries the authorization for cable retransmission is
negotiated     in   a   centralized    form   by    the    collective   organizations
representing the different categories of rightholders, the cable operators
and the broadcasters.
The draft proposal's       "umbrella model"    is based on the experience gained
from this conractual practice and seeks to eliminate the remaining flaws.
According   to   the draft    proposal   cable   retransmission    rights   should be
exclusively negotiated under the umbrella of collective organizations that
would  represent     the   various  categories    of  right-owners.    This   type of
centralized negotiation between cable-operators, broadcasters and umbrella
organizations should be promoted by two additional measures.             In the first
place, a neutral platform for negotiations in the form of a friendly non-
binding mediation should be available at request             of one of    the parties
involved   in   the   negotiations.   Furthermore,     all   the  parties   should be
subject to an obligation not to refuse negotiation on unreasonable grounds.
Both measures are      intended   to open negotiations on cable        retransmission
without, however, forcing the parties concerned to conclude an agreement.
This will remain entirely in the contractual sphere.
 ---pagebreak---                                      - 6 -
                           EXPLANATORY MEMORANDUM
                              PART ONE: GENERAL
A.  INTRODUCTION
1. The   Commission  first   put   forward  proposals    on   the   law   governing
   cross-border broadcasting in the common market in its 1984 Green Paper
   on the establishment of the common market for broadcasting, especially
   by satellite and cable.1      The proposal that a single market should be
   established in broadcasting was included in the list of measures to be
   taken by the end of 1992 which the Commission set out              in its White
                                                2
   Paper on completing the internal market.
2. On   3 October 1989   the    Council   adopted    Directive 89/552/EEC,      the
   "Television   Without  Frontiers"    Directive.3     In  its   final   form  the
   Directive departed from the Commission's original proposal, and from
   Parliament's   opinion,    in  that   it  did   not   include    a   chapter  on
   copyright.   On 21 February 1990 the Commission in its Communication on
   audiovisual poI icy observed:4
   COM(84) 300 final, 14.6.1984.
   COM(85) 310 final, 14.6.1985.
   Council Directive 89/552/EEC of 3 October 1989 on the coordination of
   certain provisions laid down by law, regulation or administrative
   action    in Member States concerning         the pursuit       of    television
   broadcasting activities: OJ No L 298, 17.10.1989, p. 23.
   COM(90) 78 final, 21.2.1990.
 ---pagebreak---                                    - 7 -
    "The legal framework established by the Directive has still to be
    amplified on the question of copyright. At a time when cross-frontier
    broadcasting has, as a result of technology, become a reality and, by
    legislation, a free right, this exercise must be accompanied by an
   effective protection of copyright in all the Member States in order
    that the holders of such rights may benefit fully from the European
    dimension of broadcasting."
3. The   Commission   then   included    this   task   in    its   programme    of
                             5
    harmonization  measures,    it  submitted    a  discussion    paper    to  all
    interested parties setting out    its thinking on the shape of a system
   of copyright protection in the future European audiovisual area,6 and
   held a hearing on the subject on 5 February 1991.
4. Without a Community approach the European audiovisual area will be set
   up solely on the basis of those       legal opportunities which are left
   open, to the detriment of artistic creation       in Europe.     The proposal
   for a Directive accordingly includes general rules for copyright which
   take account of the need to maintain a balance between the various
    interests involved and to facilitate the management of copyright and
   related   or  "neighbouring"  rights   on  a   European    scale.   The   rules
   ensure that protection    is as effective as possible and that authors
   and   neighbouring   right   owners    are   fairly    remunerated     in   all
   Member States.   At the same time they serve to encourage investment in
   promoting creativity and cross-border programme transmission, and as
   far as possible to minimize the associated risks, to the extent that
   they derive from uncertainty as to -the law or heterogeneous national
   rules.
   Follow-up to the Green Paper - working programme of the Commission in
   the field of copyright and neighbouring rights, COM(90) 584 final,
   17.1.1991.
   Broadcasting and Copyright in the Internal Market - discussion paper
   prepared by the Commission of the European Communities on copyright
   questions concerning cable and satellite broadcasts, I Il/F/5263/90,
   November 1990.
 ---pagebreak---                                        - 8-
5. The Directive here proposed therefore does not try to put over ideas
   already   rejected    in   the    discussion     of    the    "Television     Without
                              7
   Frontiers"   Green Paper       and   the   subsequently       adopted    Directive.8
   Rather, the concern      is now, through the         introduction of supporting
   measures, to safeguard       and supplement     the acquisition of rights to
   simultaneous, unaltered       and unabridged     retransmission of        programmes
   via cable, which in practice has since been largely organized through
   collective    agreements.      This     will    promote       cross-border      cable
   retransmission and underpin the European audiovisual area.
6. Above  all, the system of        regulation    proposed      includes   the primary
   broadcasting   of   programmes     via   satellite     (the   need   to  cover    this
   aspect in Community law was not acknowledged in the Green Paper).                  The
   rapidly growing number of satellites used for programme transmission,
   the introduction of medium-power and direct broadcast satellites and
   improved aerial    technology, which       is making good quality         individual
   reception   increasingly     attractive,     mean   that    a   solution    which   is
   confined simply to cable retransmission would be incomplete.
7. The arrangements adopted for the Community will, moreover, have to be
   consistent   with    the   territorially      wider     design    currently     being
   discussed  in the Council of Europe as a supplement                to the European
   Convention   on    Transfrontier       Television     of    5 May 1989.     But    the
   objectives   of   the  Community      are   different,     because     they   aim   at
   creating  the Common Market. The proposal             for a directive       tries to
   fulfil this obligation by stepping up copyright protection, promoting
   cross-border    transmission     of   programmes    and,     hence,   creating     the
   intended audiovisual area.
7  Loc. cit.
8  Loc. cit.
 ---pagebreak---                                            - 9 -
     The proposal      for a Directive essentially falls into two parts.               Both
     contain provisions on the law governing the cross-border transmission
     of television and radio programmes             in the common market.        Chapter I
     defines the terms used, and thereafter Chapter II deals with satellite
     broadcasting      and Chapter III deals with         the simultaneous, unaltered
     cable retransmission of terrestrial or satellite broadcast programmes.
B.   THE NEED FOR ACTION ON THE PART OF THE COMMUNITY AND THE PURPOSE OF
     THE DIRECTIVE PROPOSED
I. * The legal position in the Member States and under international law
Satellite transmission
9.   Article   1 1 b i s (1)(i)    of    the   Revised     Berne    Convention     on   the
     protection     of    literary   and   artistic    works    (RBC)   in   the  Brussels
     version, by which or by whose subsequent versions all Member Statesare
     bound,  grants      copyright    owners   the exclusive      right   of   authorizing
     wireless    radio-diffusion        (primary      transmissions).     The    principle
     applies   to      both    terrestrial    and     satellite    broadcasting.      Under
     Article 11 b j s (2),   it   is to be    a matter      for  the   countries of     the
     Union to determine the conditions under which the right mentioned may
     be exercised, without prejudice to the moral right of the author or to
     his right to obtain equitable remuneration.
10.  The  application       of   Article ll b i s (1)  RBC    to  the   transmission     of
     protected works via satellites raises a series of questions, however.
11.  Since the notion of broadcasting presupposes that programme                   signals
     can be received by the public, a distinction has hitherto been drawn,
     as regards satellite programme transmission, between the                 broadcasting
 ---pagebreak---                                                - 10 -
       of protected works by communications and direct satellite.                             While the
        latter   operate    at   relatively        high      power    over   frequencies       provided
       under international telecommunications law for reception by the public
       and their signals can be received by the public directly, the former
       transmit     signals    at   much    lower        power     over    frequencies       which     the
       public, under telecommunications law, is not allowed to
       receive. 9     Although    these signals were at                first   beamed only        to the
       head-ends of cable networks, their individual reception has now become
       affordable      as a   result   of    improved          aerial    technology      and   is being
       allowed    by national      telecommunications authorities                 to an      increasing
                1
       extent. ^      Recently,    medium-power           satellites       have   appeared       on    the
       scene; these continue to use telecommunications frequencies but their
       signals can also be received directly without any difficulty                            in large
       parts   of    their   footprint.       Nevertheless,           this   direct      reception      of
       programme      signals     transmitted         via       communications       satellites        has
       hitherto     not   come    within      the      scope      of    copyright       law,   and     the
       distinction hitherto made          in telecommunications              law has continued to
       be applied for copyright purposes.                  Accordingly, only the broadcasting
       of   programme      signals    via     direct          satellite     is   considered         as   a
       communication of a work to the public for the purposes of copyright,
       but   not   transmission      via   communications            satellite;        in  the     latter
       case, only the subsequent retransmission of the programme signals via
       cable networks       is relevant     for copyright            purposes.        In contrast       to
       what happens when signals emitted by direct satellite are fed                              into a
       network, cable retransmission seems therefore to be comparable not to
       wireless transmission but to a primary transmission by wire, against
       which   authors     are    protected       by      Article 11(1)(1)        of     the   Brussels
       Revision,     and   Articles 1 1 t e r ( 1 ) ( i i ) ,    14(1)(ii)    and    14bis(2)(b)        of
       the Paris Revision, of the Berne Convention.
    9  See the International Telecommunications Convention and Article 1 para
       37 of the Radio Regulations.
    10 See Chapter 3 of the Satellite Communications                           Greenpaper,        to    be
       C0M(90)490 final of 20 November, 1990.
(3)
 ---pagebreak---                                            - 11 -
12. The question whether a uniform approach to the satellite transmission
    of   protected    works     is discernible      for    copyright     purposes,       covering
    both uplink and downlink and including any conversion on the satellite
     itself,    or   whether       some    of    these     operations       require       special
    authorization      for    copyright    purposes     has    been   answered       on   various
    occasions in various ways.
13. Which copyright applies           to the transmission of programmes via direct
    satellite has not yet been clarified.                Since an author, by virtue of
    the principle of territoriality,             is in fact entitled           to a bundle of
    territorially      limited     copyrights     in respect      of   all   those      countries
    where he enjoys protection, a user of protected works must be granted
    a right of use for each country in which he performs a relevant act of
    use     for    copyright       purposes.          With     conventional          terrestrial
    broadcasting, such a relevant act of use is generally acknowledged                         to
    be carried out      in the country       in which the broadcast originates;               the
    - sometimes not        inconsiderable - spillover of             the broadcast        signals
     into  neighbouring       countries     has   been    neglected      as    irrelevant     for
    copyright purposes.
14. According    to this approach the transmission of programmes via direct
    broadcasting     satellite would only          be subject      to an authorization by
    the   right   owners     in the broadcasting         country    and    not   by    the  right
    owners    in the countries of reception.              This can be justified on            the
    ground    that   as    regards     copyright     only    the   actof     transmission      is
    relevant     and   the    direct     satellite     must    simply     be    considered     an
    extended aerial      in space, whereas        in all other countries reception is
    simply free of copyright.
15. A more    recent    view,    however,     is that     the   relevant     act    of   use  for
    copyright     purposes      in   the   transmission       of   programmes       via    direct
    satellite takes place not only            in the broadcasting country but at the
    same time     in all    those countries       in which     the programme       signals are
 ---pagebreak---                                                  12 -
     directly   receivable.         Consequently, any person           intending       to   transmit
    programmes via a direct satellite would require authorization not only
     from right owners in the broadcasting country but from right owners in
    all   the   receiving       countries.         To   protect    authors     it    is    sometimes
    proposed    that    the highest        level of protection        available at          the   time
    under    the   copyright       system      of   the    receiving    countries        should      be
    applied, and sometimes that the law of the receiving countries should
    be   applied      only      alternatively,         where     no,   or    only       inadequate,
    protection exists in the broadcasting country.
16. For  a   long    time    this controversy         was of     theoretical      interest      only.
    Since   the first       direct    satellites      have started      broadcasting         - to be
    followed by a great many more                in the foreseeable        future - and         since
    programmes      transmitted       via   medium-power       satellites     can     be    received
    directly,     the     question      of    the    relevant     law   has   assumed         central
     importance    in the matter of the acquisition of rights.
17. Under    the    national       copyright       laws    of   the   Member States           authors
    generally hold the right to communicate protected works to the public
    not    Just     terrestrially         but     via    satellite,      as    part      of     their
    broadcasting      right.      The copyright        laws of France and Spain               contain
    specific    provisions       concerning       the beaming      of  protected       works     to a
    commun i cat i ons            sate I Ii te           (droi t        d'inject ion) ; 11 » 12        t ^e
    United Kingdom,        following      a    legislative     change    made     in    1988,     also
    regards     the    diffusion        of    programme       signals     via     communications
    satellites, which are "capable of being                   lawfully received         by members
                                                                          13
    of    the     public",        as     broadcasting         activity.        In      the      other
    Member States        it    is    at    least     the    general    rule     that      only     the
11  Article 27(3) in conjunction with Article 45(3) of Law No 57/298 of
    11 March 1957 on          literary and artistic property, as amended by
    Law No 85-660 of 3 July 1985.
12  Article 20(2)(c) in conjunction with Article 36(2) of Law No 22/1987
    of 11 November 1987 on intellectual property.
13  Section   6(1 )(a) and        (2) of     the Copyright,        Designs    and     Patents      Act
    1988.
 ---pagebreak---                                           - 13 -
    transmission of signals via direct satellite, but not the transmission
    of   signals     to   a  communications       satellite,     constitutes      an   act   of
    broadcasting      under    copyright     law.    It  is also     unclear     at   national
     level   whether     in  the   case   of   diffusion     by   direct     satellite     only
    copyright     in    the   broadcasting      country    or    the   copyrights       in  all
    receiving countries are relevant.
18. For historical reasons the protection of neighbouring rights,under the
    1961 Rome Convention for the Protection of Performers, Producers of
    Phonograms and Broadcasting Organizations, is lessdeveloped. Denmark,
    Germany, France, the United Kingdom, Italy and Luxembourg have acceded
    to the Convention, but not Belgium, Greece, the Netherlands, Spain or
    Portugal.
19. Performers      are     protected,      under     Article 7(1)(a)        of     the    Rome
    Convention, against the broadcasting of their live performances only.
     If their performance, however, has been fixed with their consent on a
    phonogram, videogram or video-phonogram, their consent is not required
    for broadcasting of the fixation.               If commercial phonograms are used
    for    the  broadcast      either   the    performer,     or   the    producer     of   the
    phonogram, or both, are at           least entitled to equitable            remuneration
    pursuant to Article 12.         Apart from the fact that in this respect the
    Rome Convention leaves an option for the contracting States, the right
    to remuneration can be annulled either              in part or in full by entering
    an   appropriate       reservation     (Article 16(1)(a)).        Thus,     Denmark     and
     Italy essentially exclude         the right      to remuneration with          regard   to <t
    transmission for non-commercial purposes only,1^ whereas by contrast,
    Luxembourg    has entered       a reservation       with   regard     to  the whole of
                   5
    Article 12.I        Broadcasting      organizations         are     protected,        under
    Article 13(a) and (b) against the simultaneous use of parts of their
    transmissions       in   primary    satellite       broadcasts     by    the    right    to
    authorize    rebroadcasting,       and    from    deferred    use    by   the    right   to
    authorize fixation of their broadcasts.
14  See Copyright        1965,   p.  214    (Denmark)     and    Copyright     1975,     p.  44
    (Italy).
15  See Copyright 1976, p. 24.
 ---pagebreak---                                         - 14 -
20. At nat ional level, however, there are many differences with regard to
    neighbouring rights. Thus, first of all, neighbouring rights have not
    hitherto   been    protected    by   statute      in   Belgium,     Greece   and   the
    Netherlands, although draft        laws on this subject are currently being
    discussed in Belgium and the Netherlands.             In the meantime, the courts
     in the Member States have granted protection to a certain extent on
    non-copyright grounds. Where neighbouring rights have been protected
    by   statute   performers     can   prevent    the     broadcast     of   their   live
    performances     without     their     consent,       in    accordance     with    the
     international    protection    afforded    by    Article 7(1)(a)       of  the   Rome
    Convention.1**    The  draft    laws of    Belgium     and   the   Netherlands    also
                                                   17
    confer   such   a   right  on    performers.         However,    the    rights   which
    performers and/or producers of phonograms enjoy as regards direct use
    for the broadcasting of phonograms published for commercial                  purposes
    are regulated     differently.     Thus, Luxembourg        and  Portugal    currently
    grant  neither    performers nor phonogram         producers     independent    rights
    with regard to the use of phonograms for broadcasting purposes.                     By
    contrast,   the United Kingdom       and   Ireland     refuse   independent     rights
    regarding   the use of     phonograms     for broadcasting        purposes only     to
    performers;    but   in both these Member States phonogram producers are
16  § 45(1)(b) of Law 158 on Copyright in literary and artistic works
    (Denmark);     § 76(1)     of     the    Urhebergesetz         (UrhG)      (Germany);
    Article 18(1) of Law No 85/660 (France); Section 182(1)(b) of the
    Copyright, Designs and Patents Act 1988 (United Kingdom); Section 5
    of the Performers' Protection Act (Ireland); Article 80(1) of Law
    No 633 on the Protection of copyright and other rights associated with
    its exercise (Italy); Article 3(1)(a) of the Law on the Protection of
    performers, producers of phonograms and broadcasting organizations
    (Luxembourg); Article 178(a) of the Code on copyright and related
    rights (Portugal); Article 102(1) of Law 22/1987 (Spain).
17  See Article 51(1) of the draft Law on copyright, Documents du Sénat
    No 329-1 (1988) (Belgium), and Article 2(1)(b) of the draft Law on
    Neighbouring rights, Second Chamber, 1988-89, 21 244 (Netherlands).
 ---pagebreak---                                      - 15 -
   entitled   under   copyright   law to authorize    the use of phonograms.18
   On  the other    hand,   in Germany,19    Denmark, 20 France,21    Italy22 and
   Spain 23 both performers and producers of phonograms have a right to a
   share   of    an    additional   remuneration    for   the   broadcasting   of
   phonograms.    Comparable rules are also provided for in the draft laws
   of   Belgium    and   the   Netherlands.24   However,    the   procedures  for
   claiming   the remuneration and the method of allocating          remuneration
   between    beneficiaries      differ    considerably    in   detail.   Lastly,
   broadcasting organizations are protected         in all Member States which
   have   statutory     neighbouring    rights  or   grant   such   organizations
   copyright protection, against the fixation and the rebroadcasting of
   their broadcasts.2^
18 Section 16(1)(d) and 20(b) of the Copyright, Designs and Patents Acts
   1988 (United Kingdom) and Section 17(1) and (4)(b) and (c) in
   conjunction with Section 2(3) of the Copyright Act 1963 (Ireland).
19 §§ 76(2) and 86 UrhG.
20 § 47 of Law 158 on Copyright in literary and artistic works.
21 Article 22(2) to (5) of Law No 85-660.
22 Articles 73 and 80(2) of Law No 633 on the Protection of copyright and
   other rights relating to its exercise.
23 Articles 103 and 109(1) of Law 22/1987.
24 See Articles 56 and 61 of the draft Law on copyright, Documents du
   Sénat No 329-1 (1988) (Belgium), and Article 6 of the draft Law on
   Neighbouring rights, Second Chamber, 1988-89, 21 244 (Netherlands).
25 See § 48(1) of Law 158 of Copyright in literary and artistic works
   (Denmark); § 87(1)(1 ) and (2) UrhG (Germany); Article 27(1) of Law
   No 85-660 (France); Section 16(1)(a) and (d) in conjunction with
   Section 17(1) and (4) and Section 20(c) of the Copyright, Designs and
   Patents Act 1988 (United Kingdom); Section 19(1) and (5)(a), (b) and
   (d) of Copyright Act 1963 (Ireland); Article 79 of Law No 633 on the
   Protection of copyright and other rights relating to its exercise
   (Italy); Article 10(a) and (b) of the Law on the Protection of
   performers, producers of phonograms and broadcasting organizations
   (Luxembourg); Article 187(a) and (b) of the Code on Copyright and
   related rights (Portugal); Article I16(1)(a) and (b) of Law 22/1987
   (Spain).
 ---pagebreak---                                             - 16 -
Cable Retransmission
21.  The    transmission       by     cable     of    a   programme        broadcast       either
     terrestrially    or    via     direct    broadcasting      satellite     constitutes       an
     indépendant    act   of    broadcasting       in accordance       with   Article     11   bis
     (1)(ii) of the Berne Convention.             This qualification is valid for both
     a simultaneous and unchanged transmission of a programme broadcast and
     a defered transmission thereof.             Where the programme signals from the
     primary   broadcast    are retransmitted via cable networks                  in a country
     other     than    the      primary      broadcasting        country,      the      national
     retransmission     right     in each    individual    country      is affected      by  that
     retransmission.      The only condition         is that     the signals are fed         into
     the   network    by     a     party    other    than     the     primary      broadcasting
     organizat ion.
22.  It has hitherto been argued that in order to qualify as a broadcast it
     should    comply    with      an   additional      criterion,       namely     that    cable
     retransmission must reach an additional audience vis-à-vis the primary
     broadcast.    Retransmission        within    the national       service    area or     even
     within the direct reception area of commercial                  broadcaster would thus
     be admissible without the author's renewed consent and would not give
     rise to an entitlement to additional remuneration.                   The rebroadcasting
                               bis
     right   in Article 11         (1)(ii) of     the Berne Convention         Just    like    the
     primary broadcasting        right    in (i) is subject        to the possibilities of
     restriction    provided      for   in Article 1 1 b i s ( 2 ) .   It  can   therefore      be
     made   subject   to    exclusively        collective     management      or    even    to   a
     statutory   Iicence.
 ---pagebreak---                                        - 17 -
23. Under the Member States' copyright         laws, too, cable retransmission is
    subject   to    the    author's    consent.2**   Denmark     has    introduced    a
    statutory  licence with respect to the retransmission of domestic and
    foreign programmes broadcast terrestrially or via direct broadcasting
    satellite,     but     not    via    communications      satellite. 27     In   the
                     28                                  29
    United Kingdom      - and similarly in Ireland          - the law assumes that
    the cable   retransmission of programmes which network operators are
    obliged to retransmit under        the legislation governing       the media, as
    well   as  the    retransmission     of   programmes    within    their    intended
    reception area are classed as primary broadcasts, and as such do not
    need the special consent of right owners. This does not apply to the
    retransmission of satellite broadcasts.
24. By contrast, the Rome Convention does not deal with the retransmission
    of primary broadcast signals in an international context.                The rules
    of  the Convention      afford  protection only     against   rebroadcasting by
    wireless   means     (see   Article 3(f)     and   (g)),    and   do    not   cover
26  See §§ 15(2), 20 UrhG (Germany); Article 27 of Law No 57-298, as
    amended   by     Law     No 85-660     (France); Section 16(1)(d),          20   in
    conjunction with Section 7, 178 of the Copyright, Designs and Patents
    Act 1988 (United Kingdom); Section 8(6)(e), 9(7)(d) and 18(4)(d) in
    conjunction     with     Section 2(3)     Copyright     Act     1963    (Ireland);
    Article 16 of Law No 633 on the Protection of Copyright and other
    rights relating to its exercise (Italy); Article 23(l)(2) of the
    Copyright Act of 29 March 1972 (Luxembourg); Article 68(2)(e) in
    conjunction with Article 153(3) of the Code on copyright and related
    rights (Portugal); Article 17 in conjunction with Article 20(2)(e) of
    Law 22/1987 (Spain).
27  See § 22(a) and § 45(2) (compulsory licence for the rebroadcast ing
    right of broadcasting organizations) of Law No 158 on Copyright in
    literary and artistic works, and § 11(a) of Law No 157 on the Right to
    photographic images.
28  Section 73 of the Copyright, Designs and Patents Act 1988.
29  Section 52(3) and (4) of the Copyright Act 1963.
 ---pagebreak---                                             - 18 -
        retransmission     by wire.     Even   if a cable      retransmission      should  be
       considered as "communication to the public" within the meaning of the
       Rome   Convention,      the  simultaneous,     unaltered     cable    retransmission
       which   is the only form concerned by this Directive would not affect
       any   of     the    entitlements      conferred     by    the    Rome     Convention:
       Article 7(1)(a) of the Convention does not protect                 performers where
       what  is communicated to the public is a performance that has already
       been broadcast;       the right to remuneration for the use of phonograms
       provided    for    in Article 12      requires   that    the   phonograms     be  used
       "direct"     for    broadcasting      purposes;    and,    finally,     broadcasting
       organizations are protected only against              a retransmission       of  their
       broadcasts     by   wireless    means    (Article 13(a)      in   conjunction     with
       Article 3(g)).
   25. However, under Article 1(1 M b ) of the 1960 European Convention on the
       Protection     of    Television     Broadcasts,     whose     signatories      include
       Belgium,    Denmark,     Germany,    France,   the   United Kingdom       and   Spain,
       broadcasting       organizations       are    also     protected       against     the
       retransmission      of   their   broadcasts     by   wire.    The    United Kingdom,
       however,    has    excluded    such    protection     generally     by    entering   a
       reservation;      Belgium   has excluded     the protection      only    for   Belgian
       broadcasting     organizations     and   restricted    theprotection of        foreign
       broadcasting organizations to 50% of the weekly broadcasting time.
   26. Of  very   minor     importance    in  this  respect     is the     1974   Convention
       relating to the distribution of programme-carrying signals transmitted
       by satellite, to which of the Member States only Germany and                     Italy
       have so far acceded.        The Convention provides protection only against
       unauthorized "tapping" of programme-carrying signals not                 intended for
       reception by the general         public and hence essentially only against
       unauthorized     reception    of  point-to-point      broadcasts     via   satellite.
       Broadcasts which are transmitted via satellite direct                 to the public
       are specifically excluded from the protection of the Convention under
       Article 3.
*)
 ---pagebreak---                                         - 19 -
27. By   contrast,     the    Member States'      legislation    on     copyright     or
    neighbouring    rights frequently grants,        in this respect, a       level of
    protection that exceeds the minimum provided for in international law.
    Thus, in particular, broadcasting organizations in many Member States,
    e.g.  in Germany, 30      France,31    the  United Kingdom 32    or   Spain 33   are
    protected not only against wireless retransmission of their broadcasts
    but as well, in principle, against any retransmission by wire.                    As
    regards   neighbouring      rights    for   performers   the    disparities      are
    relatively     large:   In    certain   Member States,    such     as   Germany, 34
    France 35  or    Spain,3^     their   right    also  includes     the    right    to
    authorize the retransmission of their performance -              it is sometimes
    presumed   that   such   authorization     is granted   when   authorization      is
    given to broadcast a performance or fix it on a videogram or audio-
    videogram    -   while     in   other   countries,    such    as    recently     the
    United Kingdom, 37     rebroadcasting      is  specifically    exempt.        If   a
    commercial   phonogram    is used for the primary broadcast, the           laws of
    the Member States frequently also grant performers and/or                producers
30  § 87(1)(1) in conjunction with § 20 of UrhG.
31  Article 27(1) of Law No 85-660 in conjunction with Article 27 of Law
    No 57-298 as amended by Law No 85-660.
32  Sections 16(1)(d) and 20(c) of the Copyright, Designs and Patents Act
    1988.
33  Article 116(1)(a) of Law 22/1987.
34  See § 76, UrhG.
35  Article 18(1) of Law No 85-660.
36  Article 101(1) of Law 22/1987.
37  See Sections 182 and 183 of the Copyright, Designs and Patents Act
    1988.
 ---pagebreak---                                        - 20 -
      of phonograms a right to remuneration for the retransmission of that
      broadcast38     in   addition    to   the    minimum     protection     in   the
      Rome Convention;     the  United Kingdom     and   Ireland    even    grant   an
                                                                                    39
      independent right to authorize the retransmission of the broadcast.
 II.  The need for action at Community level
28.   In  both  fields,    satellite   broadcasting    and   cable   retransmission,
     copyright   law has been unable to keep pace in ail respects with the
     expanding    technological   possibilities     and  commercial     realities   of
     cross-border    broadcasting.    In  international    law, and especially       in
     the domestic laws of the Member States, therefore, there are currently
     certain areas of serious uncertainty as to the law; but there are also
     shortcomings    in the protection offered which       impede the objective of
     promoting creative work. In addition, right owners are exposed to the
     threat of seeing the exploitation of their           rights blocked by other
     right-owners who hold an exclusive right in another part of that same
     programme.
29.  For copyright purposes, however, a distinction has to be drawn between
     primary broadcasting and the simultaneous, unabridged            retransmission
     of programmes by cable.       In a primary broadcast, which         includes the
     broadcast   of   an original   programme    via  satellite,    the   broadcaster
     himself   decides   the composition of     the programme.     He will     include
     only works and protected performances for which he has already secured
     the broadcasting rights.      In cable retransmission, on the other hand,
38   See for instance, §§ 76(2) and 86 in conjunction with § 20 UrhG
     (Germany) or Article 103 in conjunction with Article 20(2)(d) and (e)
     of Law 22/1987 (Spain).
39   Sections 16(1)(d), and 20(b) of the Copyright, Designs and Patents Act
     1988 (United Kingdom) and Section 17(1), (4)(b) and (c) in conjunction
     with Section 2(3) of the Copyright Act 1963 (Ireland).
 ---pagebreak---                                         - 21 -
      the cable operator cannot make up his programmes on the basis of a
      portfolio  of    rights   which   he  has   acquired  beforehand.    The   cable
     operator can decide only whether he wants to retransmit             the primary
     broadcast in full or not at all.
Satellite broadcasting
30.   In considering the broadcasting of programmes via satellite there is
     no longer any justification from the point of view of right owners,
     broadcasters or viewers        for excluding    an activity which     has  to be
     described   as broadcasting      from  the scope of copyright      on   the sole
     ground   that   it uses    technology   that was originally     reserved   under
     telecommunications      law for closed point-to-point      communication.     For
     the purposes of copyright the decisive question is simply whether the
     use made of protected works and performances constitutes communication
     to the pub Iic.
31.  Where   programmes      are   broadcast     via  satellite   there     is   legal
     uncertainty as to whether the rights must be acquired only in respect
     of  the country     from which    the programme    is transmitted, or     in all
     countries of reception too; and once the broadcasting of programmes
     via a communications satellite         is placed on    the same   footing with
     broadcasting    via direct     satellite, as the Directive     proposes, this
     uncertainty    will extend     to the overwhelming majority      of   programmes
     already being broadcast via satellite in the Community.
32.  Given  the   right   owner's    interest   in seeing  his protected     work or
     performance exploited, the only commercially          sound way of resolving
     this  legal uncertainty      is to determine that the broadcasting        rights
     must be acquired only in respect of the country of transmission, which
     will have to be more precisely defined.
33.  If a broadcaster were to have to acquire the rights in all receiving
     countries,    the   difficulty   would   immediately   arise  of   deciding    in
 ---pagebreak---                                            - 22 -
    which   countries      the    programme     signals    could    in   fact   be   received
    directly.     A    satellite      footprint     cannot    be    defined     with   enough
    precision     to    allow    the    individual    countries      of   reception     to   be
    determined    exactly.      A satellite broadcast         beamed    at western      Europe
    may also be receivable           in eastern     Europe and parts of         Scandinavia,
    albeit with more expensive aerials.              With recent satellite technology
     footprints are becoming more sharply defined, but the edges are still
    blurred.    There     is a margin where reception           is possible but      requires
     increasingly     large and more powerful         aerials.      In the circumstances,
     it  is not   possible      for   a broadcaster      to determine      with   sufficient
    certainty where the public can receive direct and where not.Finally, a
    failure of negotiations with any one of the right owners in any one of
    the Member      States would       now   have   the  consequence      that   the   entire
    satellite transmission would be obstructed. This would not benefit the
    author, who has an interest in seeing his work exploited; it would not
    be in the general       interest either.
34. The proposal for a directive does not rule out the possibility, for a
    rightowner to authorize the transmission of a protected work, such as
    a   film,   exclusively       by    one   broadcaster     or    exclusively      for   one
    linguistic version.        These limited authorizations can still be granted
    in the framework of a contractual arrangement.
35. But a decision that only the law of the broadcasting country                     rs to be
    relevant    requires      that    copyright     and   the   neighbouring      rights    of
    performers, producers of phonograms and broadcasting organizations be
    properly   protected by means of a minimum alignment of                    the rules    in
    force   in   the    individual      states.    Where    one   Member State      does   not
    provide   protection      against     the   broadcasting     of   protected     works   by
    satellite,    the    transmission      via direct     satellite     from   that   country
    throughout    the Community would         require neither       the consent of       right
    owners nor the payment of remuneration, and would render                     ineffective
    the protection that the legislation of another Member State may grant.
    If  the   law of     the   broadcasting      country    does   confer    protection     in
    principle, but makes a primary broadcast via direct satellite subject
    to  a  statutory      licence,     right   owners   in   the   entire    footprint     are
 ---pagebreak---                                              - 23 -
     prevented from deciding how their works will be exploited and simply
     receive remuneration that has been fixed by the competent authority in
      the  broadcasting      country.        The    same    applies     to   the    owners     of
     neighbouring     rights;      but     here    the   disparity      between    the    rights
     protected   in the different Member States is currently much wider than
      in the case of copyright protection, as there                  is still no systematic
     protection of neighbouring rights in a number of Member States.
36.  For   this    reason     the     proposal      for    a    Directive    rules     out    the
      introduction of statutory           licences for       satellite broadcasts.          If on
     the date of      the proposal        the   legislation      of   a Member State      allows
     agreements    between    an    entitled     organization       of  right   owners     and  a
     broadcaster to be declared generally binding, this possibility may be
     maintained      subject      to     certain      conditions.       In   the     field     of
     neighbouring rights the proposal             is explicitly confined to introducing
     a standard minimum level of protection; any additional entitlements in
     respect of the protection of neighbouring rights will continue to be a
     matter for the Member States.
Cable retransmission
37.  This  proposal     for   a  directive        provides     regulation    only    for    cable
     retransmission of broadcasts from another Member State.                     For the time
     being the Commission cannot establish the need for harmonisation, as
     far as cable retransmission of broadcasts from one Member State within
     that  same   Member    State      are   concerned.       The   reason   is that     such   a
     purely national situation does not in general affect the creation of a
     single European audiovisual area.
38.  The  rights    needed    for    a   primary     broadcast     can   be  acquired     on   an
     individual basis, but this is difficult               in the case of the rights for
     simultaneous,     unaltered       cable     retransmission,       on   account     of    its
     dependence   on    the  primary       broadcast.      In Belgium,      Germany    and    the
     Netherlands, at     least, such rights are already being acquired on the
     basis of general       contracts       to which     the cable operators        and    where
 ---pagebreak---                                        - 24 -
    possible     all  groups   of  right     owners    are   party.    In    France   the
    collecting societies, representatives of film right owners and some
    broadcasting organizations have each concluded special contracts with
     individual    cable  operators.    Contractual     acquisition    of    rights   for
    cable retransmission does not exist in Denmark, where the law provides
    for statutory licensing.
39. This   type of collective acquisition of           rights -    in the form of a
    general    contract   in most  cases - has       largely managed      to solve the
     initial    problems   associated     with   the    acquisition    of     rights   to
    simultaneous,      unaltered    cable      retransmission      of    terrestrially
    broadcast    programmes.   Basically, though, two problems still             remain,
    which may Jeopardize the retransmission of national programmes and the
    cross-border retransmission of programmes from other Member States.
40. Firstly, the idea underlying general contracts at              least    is that the
    parties to them should be the owners of all rights, thus dispensing
    with the need for detailed proof of title.            Yet network operators can
    never be sure that outsiders will not claim             individually a right to
    authorize the retransmission       (the "outsider problem").          Although the
    right owners party to a contract do undertake to                indemnify network
    operators against claims by third parties whose rights fall within the
    category of rights managed or represented by them, such an arrangement
    gives network operators partial protection only.              For one thing, the
    indemnity clause is limited to the amount which the outsider, had he
    been represented when the contract was concluded, could have claimed
    as his share of the total        remuneration under the contract.            Whether
    this   is enough to cover the damages a network operator may have to
    pay, plus any legal costs, is doubtful.           Indemnification protects only
    against    damages   claims,  and    not   against    injunctions    preventing a
    retransmission or criminal sanctions.          The network operator        is anyway
    wholly    unprotected    against    claims    by   those    right   owners     whose
    categories of rights were not          represented    by any of the groups of
    right owners involved in the conclusion of the contract.
 ---pagebreak---                                         - 25 -
41. The second potential threat is that, when conducting new negotiations,
    the parties may not be able to agree in time to modify or continue the
    existing contract.       This may be the result differing of opinions as to
     the amount and composition of the remuneration or, more recently, as
    to the    inclusion of new, satellite-broadcast          programmes.    Thus, in
    Belgium and the Netherlands it has so far only been possible to reach
    agreement on a one to two-year           temporary extension of the original
    contract.     Moreover, suppliers of new satellite programmes sometimes
    encounter difficulties       in being   included   in these general contracts,
    which are created by those who         are already parties to them.
42. The proposal for a Directive seeks to deal with these problems in two
    ways.
    Firstly, it would introduce a requirement that the right to authorize
    or   prohibit    cross-border     cable    retransmission   be  exercised    only
    through    a    collecting     society.    The   rule   would   not    apply   to
    broadcasters' rights in their own broadcasts, whether originally their
    own or assigned to them.
    Secondly,    it would as far as possible alleviate difficulties            in the
    conclusion of agreements for the grant of rights to cross-border cable
    retransmission      by   requiring   that    the parties   may  call    upon  the
    assistance of      impartial mediators. Furthermore, measures         to prevent
    the abuse of negotiating positions, should be provided for, without
    however    taking      away   from    the    exclusive   character     of   cable
    retransmission rights.
    Finally, the proposal for a directive seeks to stimulate the parties
    to transfer     the rights needed     for cable retransmission      in a single
    general  contract      in every Member     State; all  right-owners and cable
    operators should be party to these agreements.
 ---pagebreak---                                                - 26 -
     Summary
     43.  Thus the proposal for a Directive covering satellite broadcasting and
           cable   retransmission seeks       to overcome      the adverse     effects of       the
           inadequate    protection     available where      cross-border     broadcasting       is
          concerned,     and   so,    in  line  with    the   other    planned     harmonization
          measures,     to   establish     the    legal   and    economic     foundations      for
          continued creative work in the European cultural sphere, which merits
          particular     protection.     The   diversity    of   European    culture,      as  was
           recently emphasized in the proposal for a Council Directive on rental
          right, lending right and on certain rights related to copyright,40 is
          not  merely    deserving     of protection:     it must     have a high        level of
          protection in order to preserve its identity.
    C.    TYPE OF HARMONIZATION SOUGHT
    44.   Like the other plans for harmonization in the field of copyright, this
          proposal does not aim at a general harmonization of the protection of
          copyright and related rights, but seeks only to harmonize areas which
          are   currently    of   foremost    importance.     One   of   these    areas    is the
          creation    of   a   European    audiovisual     area,    which    has    partly    been
          established     by  the    directive    "Television     without    Frontiers"      of   3
          October    1989 41   leaving    for   harmonisation      the   field    of    copyright
          rules. The proposal therefore provides for harmonization only to the
          extent that it is absolutely necessary            in order to meet the need for
          action at Community level.
    45.   The    national    approaches     to   copyright      in   the   Member States       are
          therefore    left as far as possible untouched.            Only where the purpose
    40    COM(90) 586 final - SYN 319, 24.1.1991.
    41    Council Directive        89/552/EEC    of   3   October     1989,    OJ    No   L   298,
          17.10.1989.
(5)
 ---pagebreak---                                         - 27 -
    of the proposed Directive requires it are Member States to be obliged
    to enact harmonized rules.         A number of the measures proposed here,
    particularly regarding neighbouring rights, in any event already form
    part of the      legislation on the protection of copyright           and related
    rights in several Member States. The proposal for a directive mainly
    seeks to avoid both, the existence of "protection-free" areas and the
    possibility of their introduction in the future within the Community.
46. In the case of satellite broadcasting, for example, the Member States
    will remain free to decide how the broadcasting right which they must
    provide   for    is to be    incorporated    into   their   national   systems of
    rights management.      As regards the obligation to protect neighbouring
    rights, this proposal       confines    itself  to an   indispensible     level of
    protection.     The   Member States      remain    free    to    lay   down     more
    far-reaching protective measures.          Neither would the proposal        in any
    way  affect     national   rules    on   remuneration     in  respect    of    sound
    recordings,     including   the allocation of      payments    between   phonogram
    producers and performers. The proposal for a directive provides for a
    protection    of   neighbouring    rights   which   is mainly     taken   from   the
    substance of the Rome Convention          for the Protection of Performers,
    Producers    of   Phonograms    and   Broadcasting    Organisations     which,    at
    present, must      be considered     the most   comprehensive     standard    for a
    protection of neighbouring rights on the international level and which
    has been accepted by the majority of Member States.                In some areas,
    however, the proposal for a directive seeks to go above the standard
    of the Rome Convention, in particular with regard to the exclusion of
    the   reservations.     The    transcription    of    a   minimum    standard     of
    protection for the purposes of this proposal, however, does not imply
    that further harmonization in the field of neighbouring rights might
    not strive to establish a higher          level of protection throughout the
    Commun i t y.
 ---pagebreak---                                          - 28 -
47. The Directive also takes account of the special mechanisms operating
     in  particular      countries,     such     as     the   possibility       of    declaring
    collective    agreements      generally     binding      in  the    field    of   satellite
    broadcasting,      or   the    existence     of     statutory      licences     for     cable
    retransmission.       Lastly, the proposal would            leave the Member States'
    existing rules on the activities of collecting societies unaffected.
48. Lastly, the proposal       avoids    interfering with existing agreements for
    the  exploitation      of   works   enjoying       copyright     protection     and     other
    protected    matter,      except    where      this      is   indispensible        for    the
    achievement     of    the   objective      pursued.      The   same     applies     to    the
    practice of     contractual      acquisition      of   the rights needed         for    cable
    retransmission, where that practice has established itself. Similarly,
    the   proposal     will    not    form    an    obstacle      to    future     contractual
    arrangements that result from the economic situation.
49. This proposal does not prejudice the harmonization proposed                        in other
    fields of copyright, in particular the proposal for a Council decision
    concerning the accession of the Member States to the Berne Convention
    for the Protection of Literary and Artistic Works, as revised by the
    Paris Act of 24 July 1971, and the                International Convention          for the
    Protection    of   Performers,     Producers       of   Phonograms     and    Broadcasting
    organizations     of   26   October    1961     and    the   proposal     for   a   Council
    Directive on Rental Right, Lending Right and on certain rights related
    to copyr ight.
50. The proposal for a decision of the Council concerning the accession of
    Member States to the Berne Convention and to the Rome Convention seeks
    to  introduce    a basic     standard     for    the   protection     of   copyright      and
    neighbouring     rights.     The   intention      of   the   present     proposal      is  to
    establish a common level of protection for neighbouring rights insofar
    as such   level    is required to avoid the development of                 low-protection
    countries    to   attract     satellite     broadcasters.         The   proposal      for   a
    directive    on     rental     right     finally       provides      for     an    absolute
    harmonization     of   certain    neighbouring        rights   within     the   Community.
    Within the comprehensive approach of the Commission                     in the field of
    copyright     as     laid     down    in     the      working      programme       of     the
 ---pagebreak---                                         - 29 -
    Commission each of the three proposals must be considered as a self-
    relying set of rules which reflects the three different objectives of
    harmonization.     Partial    overlaps    during   the  proposa I-stage    are  the
    consequence and will have to be eliminated            in a way depending on the
    progress of the adoption of each of these proposals.
    LEGAL BASIS
51. Article 2 of the EEC Treaty gives the Community the task of promoting
    a harmonious development of economic activities and closer relations
    between the states belonging to it.           To this end the Treaty calls for
    the establishment of a common market and for the approximation of the
     laws of the Member States.
52. As far as the audiovisual field is concerned, a first step towards a
    European    audiovisual      area   was   made   in   the   "Television     without
                              42
    Frontiers" Directive.
53.  In its subsequent Communication from the Commission to the Council and
    Parliament    on audiovisual      policy   the Commission    confirmed    that  the
     legal  framework     established     by   that  Directive    had   still    to  be
                                                         43
    amplified    on   the   question     of   copyright.      "Failing   a   Community
    approach   on   this question,"       the Commission    said,   "the   legislative
    compartmentalization and        legal   insecurity due to differences        in the
42  Loc. cit.
43  C0M(90) 78 final, 21.2.1991.
 ---pagebreak---                                           - 30 -
    various national protection systems will constitute a disincentive to
     investment    in creativity, limit opportunities for the exploitation of
    creative works...and prove detrimental or advantageous, depending on
    the nature of the legal system applied, to certain of the interested
    parties."     There    was    "a   common     interest   among   all   the   parties
    concerned that the question of copyright be handled within a Community
    context".
54. The   Directive     proposed     here    is   intended   to  make   it   easier   for
    broadcasting     organizations, performers, producers of            phonograms and
    cable operators to work in a single audiovisual area.
55. The Court of Justice has consistently held that broadcasting and the
    relay of broadcasts represent services rather than goods.                It makes no
    difference here whether a broadcast            is a conventional terrestrial one
    (Sacchi), 44    or   takes place      by   cable   (Debauve) 45  or  by   satellite.
    The   technical    medium    used   is   irrelevant   to the question whether a
    service    is being provided.       The exploitation of rights by the author
    or right owner also constitutes a service.
56. An   important   part of the activity of a satellite broadcaster               is the
    broadcasting     of   television    and   radio-programmes via satellite.         The
    prerequisite     acquisition of broadcasting          rights   is governed    by the
     individual     copyright      laws    of     the   Member States,     which     vary
    considerably     if they address satellite broadcasting at all.               Only a
    few    national    legal    systems    expressly     grant   authors   a   satellite
    broadcasting right,        in other countries it has still to be established
    whether the author's general broadcasting right               includes a satellite
44  Case 155/73 [1974] ECR 409
45  Case 52/79 [1980] ECR 833.
 ---pagebreak---                                        - 31 -
    broadcasting right, and whether         that right      is separable.       Neither  is
     it clear  in the   laws of most countries which of the author's rights
    are affected by a satellite broadcast.             The present state of the law
    means   that   the  acquisition     of   the    rights    for   a   programme    to  be
    broadcast by satellite is subject to serious uncertainties, and these
    have a dissuasive      if not a prohibitive effect on the organization of
    satellite broadcasts.
57. Furthermore, the existing legal uncertainties hamper the activities of
    right-owners      (authors,      artists,       producers     of      phongrams     and
    broadcasting    organizations     themselves)      because    the    exploitation    of
    their rights by granting a satellite broadcasting right                  is encumbered
    by the above mentioned legal problems.
58. The   proposal    for   a   Directive     seeks     to  coordinate       the  national
    copyright    rules   in  this   sphere    so   as   to  remove     the   uncertainties
    surrounding the acquisition of rights for satellite broadcasting.
59. The proposal    for a Directive would also provide for the coordination
    of the rules on the related rights held by performers, broadcasting
    organizations and      the producers of        phonograms.     The    rules governing
    these related rights, like the other copyright               rules on broadcasting
    rights,   form   part    of   the   legal     framework    of   a    single   European
    audiovisual area.
60. Performers, broadcasting organizations and the producers of phonograms
    are  not  protected     against   the   use    of   their   work    for   broadcasting
    purposes in all Member States.         In the absence of any coordination of
    these   rules,   satellite    broadcasters       might   establish      themselves   in
    whichever   Member State provided        the    lowest   level    of   protection   for
    these related rights.
61. Given the disparities which exist          it is conceivable that the Court of
    Justice could    follow    its findings      in Codite I v Ciné V o g 4 6 and hold
    that there has not yet been established a single audiovisual area.
46  Case 62/79 [1980] ECR 881, 903
 ---pagebreak---                                        - 32 -
62. The   second   set  of  provisions     in the    proposal    concerns    the    cable
    retransmission of broadcasts. The acquisition of the rights for the
    cable   retransmission     of  broadcasts     is   an   essential    part    of   the
    activity   of a cable operator, as retransmission              requires    that   the
    necessary broadcasting rights be acquired beforehand.             There is a need
    for a provision      requiring   that   such  rights be exercised        through a
    collecting    society,    in order    to  ensure    that   cable   retransmission
    rights   can    be  acquired    in  their    entirety.     This   would    make    it
     impossible for the retransmission of a comprehensive             programme to be
    prevented by the refusal of a single right owner exercising a right
    which relates only to one component        in that programme. Cable operators
    would be able to retransmit        the whole of the programme, and at the
    same time the right holders with an interest in a cable retransmission
    would not be prevented from exploiting their rights.
63. The acquisition of cable retransmission rights, which must necessarily
    be on a contractual basis, is further facilitated by providing for a
    mediation    body   which   can   assist    where    right   holders    and    cable
    operators have difficulty in reaching agreement.            A prohibition on the
    abuse of negotiating positions is also included,              in order   to prompt
    the parties to engage in serious negotiation.
64. It follows from the above-mentioned that the proposal for a directive
    seeks   to   facilitate    the  pursuit    of   the   activities    of    satellite
    broadcasters, cable operators as well as those of authors, performing
    artists and phonogram producers.         To that end article 57 paragraph 2
    provides   for   the coordination of      the provisions      laid down by       law,
    regulation or administrative action in Member States.
65. In the presentation of this directive, the Commission has taken into
    account   the   requirements of Article       8c of    the   EEC-Treaty     and   has
    concluded that no special provisions or derogations seem warranted or
    justified at this stage.
 ---pagebreak---                                        - 33 -
                        PART TWO; PARTICULAR PROVISIONS
                             CHAPTER I - DEFINITIONS
                                     Article 1
                                    Def in it ions
1.  This provision seeks to define the terms used in the Directive.
2.   In view  of  the   technical    development    of  satellites  and   receiving
aerials there   is no  longer any     Justification from the point of view of
right owners or broadcasters for excluding from the scope of copyright an
activity which has to be described as broadcasting, on the sole ground that
it uses technology that was originally reserved under telecommunications
law for closed point-to-point communication.        The broadcasting of programme
signals via a communications satellite should therefore be put on the same
footing  as   far  as    copyright    and    related   rights  are   concerned   as
broadcasting by direct satellite, provided it is comparable to the latter
in terms of direct reception. This is the case when the reception of the
programme bearing signals is enabled with aereals conceived for individual
reception of television and radiobroadcasts.
3.  Communication  to the public of protected works and other            protected
matter by satellite    is to require the prior authorization of          the right
holder.  The   purpose    of   this    provision    is   to  determine   when   the
broadcasting of programmes via satellite constitutes communication to the
public, and who is to be responsible for such communication.
 ---pagebreak---                                            - 34 -
4.   Responsibility for communication to the public will arise only at the
point where a single decision is taken on the content and the transmission
of the signals, provided the chain of broadcasting equipment from the point
where this decision       is taken to the transmission of the signals from the
satellite to the public        is uninterrupted.      Thus a decision on the content
alone   (such   as a decision      to produce     a particular    film, or      the  act   of
acquiring broadcasting rights, or the filming of a football match) would
not constitute communication to the public.             In the same way a decision to
transmit,    taken   in  isolation    (such as the decision of an engineer              at a
satellite ground station) would not constitute communication to the public
either.    Lastly,   there would     be no act giving       rise  to responsibility        in
copyright   law where a broadcasting organization planned             its programmes and
drew up a schedule months        in advance.      Such a decision     is translated      into
action only when the programme           is cleared    for broadcasting      in   its final
form, with any commercials and current programme references               incorporated.
Only   then  is there an uninterrupted chain of broadcasting equipment                   from
the point where the decision to act             is taken to the transmission of           the
signal .
5.   The responsibility in copyright         law, so described, arises where the act
requiring authorization takes place, that            is to say where the decision on
content and transmission is taken.           As a rule this will be the headquarters
of the broadcasting organization.          This will still be so if the signals are
first sent to a ground station          in another Member State and transmitted to
the   satellite    from    there.    The   decisive    test   is   that    the    chain    of
broadcasting equipment       used must     be uninterrupted     from   the place of       the
decision    on   the    content    and    on   transmission    up    to   the     point    of
transmission.
 ---pagebreak---                                          - 35 -
6.   This    does   not   mean    that   the   question    whether    a   broadcasting
organization's transmission can be received          in more than one Member State
 loses its importance.      Even though reception as such may be irrelevant for
copyright    purposes, there can be no doubt          that   it can   have   commercial
repercussions on any other exploitation of the work received in the country
of   reception.    Thus the extent     of  reception will     usually be    taken  into
account when the remuneration to be paid          is arrived at.     The relationship
between the transmission of a satellite programme and other forms of use or
exploitation will as a rule be coordinated by contract too.
7.   The proposal for a Directive says nothing of the treatment of cases in
which the decision on the content and transmission of the programme-bearing
signals is taken in a non-Community country.           The reason for this is that
Community    law cannot    lay down any compulsory      standard of protection for
copyright and related rights in a non-member country, as it can inside the
Community.     Member States are accordingly free to make the responsibility
in copyright     law for satellite broadcasts from non-member countries depend
on alternative tests.
8.      Furthermore,    the   proposal   for  a  directive     deals   with   questions
relating to the simultaneous, unchanged and unabridged cable retransmission
of broadcasts from another Member State.
9.     With regard to the retransmission of broadcasts of one Member State
within that same Member State Community action, at present, is not required
in order to establish the European audiovisual area. SimiMarly a need for
Community     intervention    concerning   copyright    treatment   of   simultaneous,
unaltered cable retransmission of the programmes of domestic broadcasters
within their so-called       "distribution zone" must be denied. Finally, this
reasoning also applies to the question how transmitting equipment which is
relevant for copyright purposes must be distinguished from mere receiving
equipment which is irrelevant for copyright purposes.
 ---pagebreak---                                          - 36 -
10.    The proposal for a directive does not make a distinction regarding
the mode of transmission of the primary broadcast that              is retransmitted.
The rules proposed, therefore, apply          irrespective of whether the primary
broadcast    is a satellite or a terrestrial broadcast. However, there is no
cable retransmission      in the sense of this proposal, if the programme is
merely   delivered by point-to-point communication to the cable head end
without being the subject of a simultaneous primary broadcast.
11.    The notion of cable-retransmission extends to multipoint micro-wave
distribution     systems   where   the   latter   perform   the  role  of   broadcast-
retransmission     in areas where the establishment of a cable network           is not
economi caIi y viable.
                      CHAPTER M - BROADCASTING BY SATELLITE
                                       Art icle 2
                                  Broadcasting right
12.  Article 2 of the proposal provides that the satellite broadcasting of
works which     are protected     under  copyright    law  is to require     the prior
authorization of the right owners.
13.   It is not proposed, however, that a new satellite exploitation right
should   be   introduced.    The   intention    is simply   to make    it clear    that
communication by satellite can constitute communication to the public in
this same way      as communication via a terrestrial          broadcasting network.
Both forms of communication are covered by the broadcasting right.
14.  This will, under        no  circumstances     limit  the existing    practise of
contractual arrangements for the exploitation of rights. In particular, it
is still    possible   to   limit  the exploitation of rights contractually to
specific modes of transmission or to specific linguistic versions.
 ---pagebreak---                                           37 -
                                      Art icle 3
                       Acquisition of broadcasting rights
15.   Under the proposal the only      law which would apply to the broadcast of
a   television   or  radio    programme   by   satellite   would     be   that  of   the
Member State    in which    a  single   decision    is taken    on    the  content  and
transmission   of   the   programme-bearing      signals.   If   there     were  to   be
statutory licensing in that Member State, right owners would have to accept
the direct reception of their works broadcast by satellite throughout               the
entire satellite footprint.
16.   This would be too far-reaching an effect; and in order to prevent              it,
the Directive would not allow statutory         licences to restrict the right to
communicate works enjoying copyright protection by satellite to the public.
17.   In  line with   harmonisation    rules put   forward   by   the Nordic    Council
Scandinavian   countries    allow  collective    agreements   concluded     between   an
entitled organization of right owners and a broadcasting organization to be
extended to right owners not represented by the relevant organization.
18.   Where on   31 July 1991 such a possibility exists            in a Member State,
and covers satellite broadcasting as well, this may be retained until                 31
December 1997 provided that an extended collective agreement system              is not
applied   to cinematographic works. Cinematographic works            in this context,
refers to the definition of Articles 2, paragraph 1 and 14bis of the Berne
Convention    on    the    protection     of    Artistic    and      Literary    Works.
 ---pagebreak---                                             - 38 -
                                          Art icle 4
                                         Performers
19.  The  current    variations       in the     level    of   protection    of   performers,
producers of phonograms and broadcasting organizations in the Member States
could be exploited by satellite broadcasters who established themselves in
the  Member State     which     granted     the    most    limited   protection     to   these
categories.   The proposal        therefore provides         for   a harmonization of the
protection   of    performers,        producers      of   phonograms      and   broadcasting
organizations    in  the    Community      to   the   extent     required   to   achieve   the
objective of the proposal.
20.  This would mean       that    performers would be entitled            to authorize or
prohibit  the   transmission       of   their    live performances       by   satellite.    To
avoid this right being deprived of substance through the use of recorded
performances,   the    Directive      also   provides      for   a  fixation    right   and a
reproduction right.
21.  When an audiovisual work          is produced the contract between the artist
and the producer     will as a rule settle the remuneration of the artist,
while the later commercial exploitation of the work, including the artist's
performance, will,      in practise, mostly be in the producer's hands.                   This
practice  is reflected      in the     legislations of a number of Member States.
These legislations mostly provide for a presumption of assignment according
to which the artist who participates              in the production of an audiovisual
work and has concluded a contract with the producer                   is presumed     to have
assigned   his    rights     to    this    producer.      In    some   Member    States    the
presumption of assignment         is rebuttable.        It is not the intention 4f the
present proposal to interfere with the rules on the assignment of rights.
Member States, therefore, can leave the assignment of performer's rights to
the individual negotiation between the parties or make the assignment of
performers rights subject to a system of legal presumption.
 ---pagebreak---                                       - 39 -
                                    Art icle 5
                     Remuneration for the use of phonograms
22.   Sound recordings are extensively used in the composition of broadcast
programmes.    The Rome Convention therefore provides that performers or the
producers of phonograms, or both, singly or severally, are to be given a
share   in this form of use of a phonogram by a broadcasting organization,
through   the grant of a right of remuneration.       It would  be advisable  to
adopt   this principle at Community     level.  The Member States would   remain
free to determine whether they wish to grant this right of remuneration to
both categories of right holders, to a single category, or to one category
with  some participation by the other.       The rules on the division of    the
remuneration would also be a matter for the Member States.
                                    Art icle 6
                           Broadcasting organizations
23.   In order   to protect  broadcasting organizations from seeing parts of
their   broadcasts  taken over   by other   broadcasting  organizations without
authorization, the proposal provides that broadcasting organizations would
have the right to authorize or to prohibit the simultaneous retransmission
of  their  transmissions by satellite, the fixation of their       transmissions
and the reproduction of any fixation of their transmissions.
 ---pagebreak---                                         - 40 -
                                      Art icle 7
                               Limitations on rights
24.   The proposal avoids any detailed harmonization of the rules providing
for   limitations on    related   rights   in the Member States-, its wording      is
based   on   Article 15    of   the   Rome   Convention.    In  most   Member States
limitations on related rights are regulated in whole or in part by means of
a reference to the corresponding provisions of copyright law proper.           To
attempt a detailed harmonization here would run counter to this principle,
and the result might be that owners of related rights would be placed in a
better   position   than authors.    This would conflict with       the approach  to
copyright and related rights in most Member States.
25.   This   in   no  way   prevents    steps   being   taken   to   harmonize  such
limitations at Community level at a later stage.
                                      Art icle 8
                                 Minimum protection
26.   Articles 4 to 7 seek to lay down a minimum           level of protection for
performers,    producers   of   phonograms    and  broadcasting    organizations  in
respect of satellite broadcasting.       The Member States remain free, however,
to provide for more far-reaching protection of these categories of right
owners or other categories.       In any event Member States should be bound by
the definition of a communication to the public by satellite when granting
rights above the minimum standard. Article 8 paragraph 1 does not preclude
any  further    harmonization    in  the   field  of  copyright    and  neighbouring
r ights.
 ---pagebreak---                                        - 41 -
27.  The Directive provides for recognition of the rights only of nationals
of Community Member States, and of companies or firms within the scope of
Article 58 of the EEC Treaty, so as to prevent any discrimination against
right owners from other Member States which would be incompatible with the
EEC Treaty.   The   question   whether   the   rules   in  this   Directive   can   be
applied to the nationals of non-member        countries will    therefore depend on
the   relevant    bilateral     and    international     agreements    between     the
Member States and non-Community countries.        Where those agreements provide
for  national   treatment    of   nationals    of  non-Community     countries    this
Directive may also apply to them.
                                     Art icle 9
                              Transitional   Provision
28.  The immediate application of Chapter 2 of the Directive to works could
be a source of difficulty where their         exploitation   is the subject     of an
existing agreement.    This would be the case where broadcasting rights have
been divided between different      right holders    in defined areas.     Under   the
circumstances obtaining    at   the  time  the agreement    was concluded,     rights
were conferred whose exploitation was not to affect the exploitation of the
sister rights.    In the bulk of these cases the difficulty can be resolved
by reinterpreting or    if necessary    renegotiating the agreement.       The grant
of a three-year period of grace       is intended    to allow satisfactory     agreed
solutions to be found where a genuine problem arises.
 ---pagebreak---                                         - 42 -
                       CHAPTER III: CABLE RETRANSMISSION
                                      Article 10
                            Cable retransmission right
29.  The cable retransmission of broadcasts constitutes communication to
the  public   of  the works     and   other   protected   matter   contained   in  the
broadcast, and    is protected      by copyright.     The  cable   retransmission   of
broadcasts   therefore   requires     the   authorization   of   the  relevant   right
owners.
30.  But this does not tell us which are the relevant right owners, nor
does it define types of use which may be outside the scope of copyright.
The Member States are consequently free to decide which categories of right
owners   are   to  be   entitled     to   authorize    or  to  prohibit    the   cable
retransmission    of  a    broadcast.      It   is   likewise   a   matter   for   the
Member States to determine the view to be taken for copyright purposes of a
communal aerial, for example, or of the coverage of a domestic broadcaster.
31.  Neither is the proposal intended to harmonize moral rights in relation
to cable retransmission.       It does not affect       rules  in the Member States
allowing   a   cable   retransmission       to   be   interrupted    on  grounds    of
infringement of moral rights.
32.  While   the  cable   retransmission of       broadcasts   is   in future   to be
carried out on a purely contractual basis, account has to be taken of the
developed cable retransmission systems which exist in the Member States and
which operate in a satisfactory way. Where on 31 July 1991 a Member State
has introduced a statutory licensing system covering cable retransmission,
 ---pagebreak---                                          - 43 -
that possibility will remain open until 1998 too. This is equally valid for
a situation where the national copyright legislation expressly provides for
the  possibility    of  the  introduction     of   a   statutory    licence   system  by
administrative    regulation.   However,     there   is no need      to maintain    such
systems after 1998, when the contractual system envisaged by this proposal
will  have   shown   its merit    of    rendering    a   statutory    licence   solution
superfluous.
                                      Article 11
                   Exercise of the cable retransmission right
33.  A  cable   network   operator     takes   over   a   primary   broadcast    without
alteration, and has no say in the composition of the programmes he relays.
This means that he is not usually in a position to identify the owners of
rights  in particular     parts  of    the   programme     in advance.     In order   to
prevent rights in individual programme components from standing in the way
of the cable retransmission operation as a whole, it is proposed that cable
retransmission    rights   should    be   exercised     centrally    by   one   or  more
collecting    societies.   The   right     of   each    individual    right   owner   to
authorize   or  to prohibit    cable    retransmission      could  be   exercised   only
through the intermediary of these collecting societies.
34.  The obligation to exercise the cable retransmission right only through
a  collecting   society   would  not     affect   the   questions   of   ownership   and
transfer of ownership; the obligation to act through a collecting society
would apply only to the exercise of the cable retransmission right against
a cable operator.
35.  Lastly, right owners as members of the collecting society would remain
free to take steps through the society to protect their commercial              interest
in seeing   their   works exploited      in an orderly      fashion.    The collecting
society might for example be told to include an escape clause in agreements
authorizing   cable retransmission.       Such   a clause might      provide   that  the
society may oppose the retransmission of a work where this would result in
serious and irreparable damage to the right owner.
 ---pagebreak---                                      - 44 -
36.   Neither does the obligation to act through a collecting, society mean
that right owners would be required to Join such a society.      A right owner
who has not transferred the exercise of his rights to a collecting society
would have a claim for compensation on the society which manages rights of
the same kind.    The claim would be confined to the sum which the right
owner would have received if he had transferred his rights to the society.
This implies that as far as this compensation is concerned the right-owner
who  is not a member    of the collecting society must    be put on the same
footing as the members of that society.      Furthermore, the non-member must
have the possibility to enforce his claim for equal treatment before the
national courts.
                                   Article 12
  Exercise of the cable retransmission right by broadcasting organizations
37.   The number of broadcasting organizations can be determined at the time
a cable retransmission agreement      is concluded, and every cable operator
knows   which  programmes  he   is   feeding   into his  network.  It   is not
necessary, therefore, to extend the obligation to act through a collecting
society to cover broadcasting organizations' own rights and rights assigned
to them.
38.   Where a right owner transfers the rights for a primary broadcast and
for any associated    cable retransmission    to a broadcasting  organization,
these cable retransmission rights are to be exercised by the broadcasting
organization and not by a collecting society.
 ---pagebreak---                                          - 45 -
                                       Article 13
                                  General contracts
39.   Both   cable   operators   and    right   owners    can   have    an   interest    in
regulating    authorization    for   the   cable   retransmission      of   one   or   more
broadcasts by one or more cable operators            in a single general         contract.
Right owners and cable operators should therefore be encouraged to do so.
The parties would conclude such general           contracts freely, but any party
seeking   such  an   agreement   must    himself  be prepared      to negotiate       on a
collect ive basis.
40.   This  does not mean     that    the other    side   could   be   required     to act
collectively.     It  is conceivable,      therefore,   that   negotiations might        be
individual on the one side and collective on the other.             A cable operator
might   negotiate    with  all    right    owners   together,     for    example,    or   a
collecting society might negotiate with all cable operators                   regarding a
particular category of rights.
                                      Article 14
                                       Mediators
41.   Orderly    cable    retransmission       requires     that     the     parties     be
fundamentally available for negotiations on the acquisition of rights.                   To
ensure that this is so the parties may have recourse to the assistance of
mediators   if they encounter an unwillingness to negotiate.               The mediators
body would help with negotiation, and if necessary could submit non-binding
amicable proposals.     The mediators should be         impartial   experts to ensure
that proper account is taken of the interests involved.             The details of the
procedure would remain a matter for the Member States.
 ---pagebreak---                                          - 46 -
                                       Article 15
                Prevention of the abuse of negotiating positions
42.   The willingness of the parties to negotiate is also to be promoted by
a   ban  on   the   abuse   of   negotiating   positions.     In  general   terms,  the
existence of an abuse of a negotiating position should be considered               if a
position    taken with    regard   to an ongoing     negotiation can     in no way be
justified by the circumstances. There would be such abuse, for example,
where one of the parties refused absolutely to enter into negotiation.              The
same would apply where a purported offer was in no way based on rational
elements.    In effect,     therefore,   this   ban on    the   abuse  of  negotiating
positions    constitutes     a  requirement   at   least   to   enter  into   bona f i de
negotiation.     But it is only an aid to negotiation, and does not force the
parties to reach agreement.        A proposal of an improperly high or low level
of consideration would be inadmissible.          But the Directive does not give a
definition of what constitutes a fair proposal.
43.   If no agreement      is reached and there has been no abusive conduct,
cable retransmission will not be possible in that particular case.
44. Member States remain free to determine the way in which they will seek
to prevent    such abuse.      A civil-law remedy or administrative supervision
would both be conceivable.
 ---pagebreak---                                     - 47 -
                       CHAPTER IV; GENERAL PROVISIONS
                                  Article 16
                              Compet it ion Rules
45.  The application of the competition rules of the Community and of the
     Member  States  are  not   affected   by  the  provisions of  the  draft
     directive.  In  particular,   the   measures  to  prevent the  abuse  of
     negotiating positions is intended only to promote the willingness to
     negotiate in a given situation, quite independently from the rules of
     conduct imposed by the competition laws in force.
                                  Article 17
                    Collective administration of rights
46.  Regulation of the activities of collecting societies will continue to
be a matter for the Member States, which must however comply with Community
law. This article does not preclude any further harmonization with regard
to the collective administration of rights.
 ---pagebreak---                                            - 48 -
                                      Proposal for a
                                    COUNCIL DIRECTIVE
          on the coordination of certain rules concerning copyright
        and neighbouring rights applicable to satellite broadcasting
                               and cable retransmission
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic Community,
and in particular Article 57(2) thereof,
Having regard to the proposal from the Commission,
In cooperation with the European Parliament,
Having regard to the opinion of the Economic and Social Committee,
(1)  Whereas the objectives of the Community             as  laid down   in the Treaty
      include establishing an ever closer union among the peoples of Europe,
     fostering     closer    relations     between   the   States   belonging   to  the
     Community,     and   ensuring     the  economic   and   social  progress   of  the
     Community countries by common action to eliminate the barriers which
     divide Europe;
(2)  Whereas to that end the Treaty provides for the establishment of a
     common    market    and  an   area   without   frontiers;   whereas   this   is to
     include the abolition of obstacles to the free movement of services
     and   the   institution    of   a system    ensuring   that  competition    in the
     common market      is not distorted; whereas to that end the Council may
     adopt directives for the coordination of the provisions              laid down by
     law, regulation or administrative action            in Member States concerning
     the taking up and pursuit of activities as self-employed persons;
 ---pagebreak---                                        - 49 -
(3) Whereas broadcasts transmitted across frontiers within the Community,
     in particular by satellite and cable, are one of the most              important
    ways of pursuing these Community objectives, which are at the same
     time political, economic, social, cultural and legal;
(4) Whereas    the   Council   has   already   adopted    Directive 89/552/EEC     of
     3 October 1989 on the coordination of certain provisions laid down by
     law, regulation or administrative action         in Member States concerning
     the  pursuit    of  television    broadcasting     activities1,    which   makes
    provision    for  the promotion of      the distribution     and  production of
     European   television programmes and for advertising          and sponsorship,
     the protection of minors and the right of reply;
(5) Whereas, however, the achievement of these objectives             in respect of
    cross-border    satellite broadcasting and the cable retransmission of
    programmes from other Member States is currently still obstructed by a
    series of differences between national          rules of copyright and some
    uncertainties as to the law; whereas this means that holders of rights
    are exposed     to the threat    of seeing    their works exploited       without
    payment of remuneration or that the individual            holders of exclusive
    rights    in  various   Member  States    block   the  exploitation    of   their
    rights; whereas     the   legal  uncertainty    in particular     constitutes a
    direct   obstacle   to   the  free   circulation   of   programmes   within   the
    Community;
    OJ No L 298, 17.10.1989, p. 23.
 ---pagebreak---                                          - 50 -
(6)  Whereas   a   distinction     is   currently     drawn    for   copyright     purposes
     between    broadcasting     by     direct    satellite      and    broadcasting      by
     communications     satellite;     whereas     since     individual     reception      is
     possible and nowadays affordable with both types of satellite, there
      is no longer any justification for this differing legal treatment;
(7)  Whereas the free broadcasting of programmes is further                impeded by the
     current   legal uncertainty as to whether broadcasting by a satellite
     whose   signals   can  be   received     directly    affects    the   rights    in the
     country   of   transmission     only,    or    in  all   countries     of    reception
     together;    whereas     since     communications       satellites       and    direct
     satellites    are   treated    alike    for   copyright     purposes,     this    legal
     uncertainty    now   affects     almost    all    programmes     broadcast     in   the
     Community by satellite;
(8)  Whereas, furthermore, the legal certainty, which is a prerequisite for
     the free movement of broadcasts within the Community, is missing where
     programmes transmitted across frontiers are fed into and retransmitted
     through cable networks;
(9)  Whereas the development of the acquisition of rights on a contractual
     basis is already making a vigorous contribution to the creation of the
     desired European audiovisual         area;   whereas the continuation of such
     contractual agreements should be ensured, and their smooth application
      in practice should be promoted wherever possible;
(10) Whereas at present      cable-operators      in particular      cannot    be sure to
     have actually acquired all the programme              rights covered by such an
     agreement ;
(11) Whereas,    lastly,   parties     in   different    Member States      are    not   all
     similarly   bound   by obligations which          prevent    them   from   improperly
     refusing to negotiate on the acquisition of the rights necessary for
     cable distribution or improperly allowing such negotiations to fail;
(12) Whereas the legal framework for the creation of a single audiovisual
     area laid down in Directive 89/552/EEC must therefore be supplemented
     with reference to copyright;
 ---pagebreak---                                             - 51 -
(13) Whereas,     therefore,     an   end    should   be   put   to  the   differences     of
     treatment     of     the   transmission      of    programmes     by    communications
     satellite     which     exists    in   the  Member States,      so   that    the   vital
     distinction throughout         the Community becomes whether protected works
     and other protected matter are communicated                 to the public;      whereas
     this will also ensure equal treatment of the suppliers of cross-border
     broadcasts,      regardless     of   whether    they   use   a  direct    broadcasting
     satellite or communications satellite;
(14) Whereas   the     legal   uncertainty     regarding    the rights     to be    acquired
     which impedes cross-border satellite broadcasting will be overcome                    by
     defining the notion of communication to the public by satellite at a
     Community     level;     whereas     this  definition     will   at   the    same   time
     specify where the act of communication               takes place; whereas such a
     definition is necessary to avoid the cumulative application of several
     national laws to one single act of broadcasting; whereas communication
     to  the   public     occurs   only    when   and   in   the Member     State   where a
     broadcasting organization takes a single decision on the content and
     the transmission of programme-carrying signals; whereas there                      is no
     communication if the chain of broadcasting equipment between the point
     where   such    single    decision     is  taken    and   the  transmission      of  the
     relevant signals from the satellite is interrupted;
(15) Whereas   in arriving at the amount of the payment               to be made for the
     rights   acquired      the parties      should   take account     of   the actual     or
     potential audience throughout the area in which the broadcast can be
     received;
(16) Whereas    a   special     transitional      provision     applicable     to   existing
     agreements should be provided for so that at the latest by 1998 these
     agreements will be adapted in the light of the new legal framework;
 ---pagebreak---                                           - 52 -
(17) Whereas    programmes      broadcast    from    non-member    countries     to    the
     territory    of    the   Community    will   be   outside    the   scope   of    this
     Directive; whereas they may be treated differently              in the law of the
     Member States from programmes transmitted from a Member State                  if the
     protection provided for by this Directive is not granted               in the non-
     member country or only granted to a lesser extent;
(18) Whereas the arrangements made should also include provisions for the
     protection of holders of copyrights and neighbouring rights; whereas
      it is necessary to ensure that protection for specific categories is
     accorded    in all    Member    States  to the extent     provided    for   by   this
     Directive    and   that   this protection      is not   subject    to a statutory
      licence system; whereas only in this way is it possible to ensure that
     any difference      in the    level of protection within the common market
     will not create distortions of competition which might result                   in an
     unjustified disadvantage for programme suppliers and holders of rights
      in Member States with a high level of protection;
(19) Whereas   the minimum      protection   provided    for neighbouring     rights    is
     mainly   taken     from   the   substance   of   the   Rome   Convention     of   the
     Protection    of   Performers, Producers of        Phonograms    and Broadcasting
     Organizations which at present must be considered to provide the most
     comprehensive     standard of     protection of neighbouring        rights    in the
      international    field-, whereas this standard has been accepted by the
     majority of Member States-, whereas, however,            in accordance with the
     aims of this Directive, it is not appropriate to allow for derogations
     corresponding to those provided for in the Rome Convention;
(20) Whereas   the    cable   retransmission    of   programmes    from   other    Member
     States is an act subject to copyright and neighbouring rights; whereas
     the cable operator must therefore obtain the authorization from every
     holder of rights in each part of the programme retransmitted; whereas,
     under    this     Directive,      the   authorizations      should    be    granted
     contractually     unless   an exception     is provided     for   in the   case of
     existing legal licence schemes-,
 ---pagebreak---                                              - 53 -
(21) Whereas, this Directive, through the obligation to have recourse to a
     collecting society, provides for the exclusive collective exercise of
     the authorization right           to the extent      that this       is required by the
     special   features of cable retransmission; whereas this Directive is
     thereby seeking        to ensure that       the smooth operation of            contractual
     arrangements      is not      called     into  question      by   the    intervention     of
     outsiders holding rights in individual parts of the programme; whereas
     the authorization right as such remains intact and only the exercise
     of  this   right     is regulated       to some extent,         so   that   the   right   to
     authorize a cable retransmission can still be assigned; whereas this
     Directive does not affect the exercise of moral rights-,
(22) Whereas contractual         agreements regarding         the authorization of cable
     retransmission shall be promoted by additional measures; whereas, to
     begin with, all the rights necessary for a cable retransmission should
     be acquired     in the form of a general contract; whereas, furthermore,
     any   party    shall     be   entitled,     at   any    moment,      to   call   upon    the
     assistance     of     impartial      mediators    whose      task     it   is   to    assist
     negotiations      and    to    put    forward   non-binding        proposals;      whereas,
     finally,    it   is necessary        to ensure    that     the negotiations         are not
     improperly     blocked     or    that    individual    holders      of   rights    are   not
     improperly    prevented      from    taking part      in the negotiations; whereas
     none of these measures for the promotion of the acquisition of rights
     calls into question the contractual nature of the acquisition of cable
     rights;
(23) Whereas, however, Community rules are not needed to deal with all of
     those    matters       whose     effects,     perhaps       with     some     commercially
     insignificant exceptions, are felt only inside the borders of a single
     Member State;
(24) Whereas this Directive lays down the minimum rules needed to establish
     and  guarantee      free    and    uninterrupted     cross-border        broadcasting     by
     satellite     and     simultaneous,        unaltered      cable      retransmission       of
     programmes broadcast from other Member States, on what                     is essentially
     a contractual basis;
 ---pagebreak---                                       - 54 -
(25) Whereas this Directive does not prejudice further harmonization in the
     field   of   copyright  and   neighbouring      rights   and   the   collective
     administration of such rights;
(26) Whereas it is therefore a matter for the Member States to supplement
     the   general  provisions   needed   to   achieve   the   objectives   of   this
     Directive by taking legislative and administrative measures in their
     domestic law, provided these do not run counter to the objectives of
     this Directive and are compatible with Community             law; whereas, in
     particular, Member States are accordingly free to lay down rules for
     the protection of rights related to copyright which go beyond those
     provided for in this Directive;
(27) Whereas   this  Directive   does   not   affect   the  applicability    of   the
     competition rules in Articles 85 and 86 of the Treaty,
HAS ADOPTED THIS DIRECTIVE:
CHAPTER I:   DEFINITIONS
Article 1
For the purpose of this Directive:
a)   "satellite" means any satellite operating either on frequencies which
     under   telecommunications    law   allow    reception    by   the   public   (a
     broadcasting   satellite) or    on   frequencies    which   are   reserved   for
     closed, point-to-point communication (a communications satellite).            In
     the   latter  case,  however,    the   circumstances    in   which   individual
     reception of the signals takes place must be comparable to those which
     apply in the case of broadcasting satellites;
 ---pagebreak---                                            55 -
 b)   "communication to the public by satellite" inside the Community means
      the  act    of   taking   a   single   decision    on  the   content     and  the
      transmission     by   satellite   of   programme-carrying      signals    by  the
      broadcaster. This act of communication to the public by satellite
      occurs   in the Member     State where the broadcaster        takes the single
      decision   on    the   content   and   the    transmission   by    satellite   of
      programme-carrying signals.         If the programme-carrying        signals  are
      encrypted, communication to the public by satellite means the act of
      taking a single decision on the content and the transmission of the
      programme    carrying   signals   under    the  condition   that   decoders   are
      provided   to   the   public   by  the    broadcaster   himself    or   with  his
      approval.    There   is no   communication     to  the  public    by   satellite,
      however, if there      is any   interruption of the chain of        broadcasting
     equipment between the point where a single decision             is taken and the
      transmission of the relevant signals from the satellite;
c)    "cable    retransmission"      means    the    simultaneous,     unaltered    and
     unabridged retransmission of a broadcast from another Member State by
     a cable or microwave system for reception by the public;
d)    "broadcasting" means the       initial   transmission, by wire or over        the
     air, including that by satellite, of television or radio programmes
      intended for reception by the public-,
e)    "collecting    society"    means    an   organization    whose    members    have
     appointed it to manage copyright or related rights.
CHAPTER II:   BROADCASTING OF PROGRAMMES BY SATELLITE
Article 2:   Broadcasting right
Member States shall      provide a right     for   the author   to authorize or      to
prohibit the communication to the public by satellite of copyright works,
subject to the provisions set out in this Chapter.
 ---pagebreak---                                       - 56 -
Article 3:   Acquisition of broadcasting rights
(1)  Member States shall ensure that the right referred to in Article 2 may
     be acquired only by agreement.
(2)  Where, on 31 July      1991, it   is provided by a Member State     that an
     agreement between a collecting society and a broadcasting organization
     may be extended to include holders of rights not represented by the
     collecting    society,   this  shall   continue   to   be   possible   until
     31 December 1997.
(3)  Paragraph 2 shall not apply to cinematographic works, including works
     created by a process analogous to cinematography.
Article 4:   Performers
Member States shall provide that performers shall enjoy the right:
        -  to authorize or      prohibit  the communication to the public by
           satellite of their performance except where the performance used
            in the broadcasting is itself already a broadcast performance or
            is made from a fixation-,
        -  to    authorize   or   prohibit   the   fixation   of  their   unfixed
           performances;
        -  to authorize or prohibit the reproduction of a fixation of their
           performance.
 ---pagebreak---                                     - 57 -
Article 5:  Remuneration for the use of phonograms
Member States shall provide that     if a phonogram published for commercial
purposes, or   a reproduction of such phonogram,     is used  directly  for a
communication to the public by satellite, a single equitable remuneration
shall be paid to the performers, or to the producers of the phonograms, or
to both.
Article 6:  Broadcasting organizations
Member States shall provide that broadcasting organizations shall enjoy the
right to authorize or prohibit:
     the simultaneous retransmission of their broadcasts by satellite;
     the fixation of their broadcasts;
     the reproduction of fixations of their broadcasts.
Article 7:  Limitations on rights
(1)  Member States may provide for limitations to the protection guaranteed
     by Articles 4, 5 and 6 only as regards:
         - pr ivate use-,
         - use   of  short  excerpts   in connection  with  the  reporting of
           current events;
         - ephemeral   fixation by a broadcasting organization by means of
           its own facilities and for its own broadcasts;
        -  use solely for purposes of teaching or scientific research.
 ---pagebreak---                                     - 58 -
(2)   Notwithstanding paragraph 1 of    this Article,   any Member State may
      provide for the same kinds of limitation with regard to the protection
      of performers, producers of phonograms and broadcasting organizations
      as it provides for in its legislation concerning the protection of
      copyright   in  literary  and   artistic   works.  However,  compulsory
      licences may be provided for only to the extent to which they are
      compatible with the Rome Convention for the Protection of Performers,
      Producers of Phonograms and Broadcasting Organizations.
Article 8:   Minimum protection
(1) Member States    may  provide   for   more  far-reaching  protection  for
      authors, and holders of neighbouring rights under their jurisdiction
      than that required by Articles 2 to 6.
(2)   In applying paragraph 1 Member States shall observe the definitions
      contained in points (a) and (b) of Article 1.
Article 9: Transitional provision
Agreements concerning the exploitation of protected works and services, in
force   on 1 January 1995, shall   not   be  subject to Articles 2 to 8 until
31 December 1997 if they expire after that date.
 ---pagebreak---                                        - 59 -
CHAPTER M l :  CABLE RETRANSMISSION
Article 10; Cable retransmission right
 (1) Member States    shall     ensure    that    when    programmes    from    other
     Member States   are   retransmitted     by  cable    in  their   territory   the
     applicable copyright and neighbouring rights are observed, and that
     such retransmission takes place on the basis of agreements between
     copyright owners, holders of neighbouring rights and cable operators.
(2)  Notwithstanding     paragraph    1,   Member    States    may   retain    until
     31 December 1997 such statutory licence systems that are in operation
     or expressly provided for by the national law on 31 July 1991.
Article 11:   Exercise of the cable retransmission right
(1) Member States shall ensure that the right of copyright owners and
     holders of neighbouring      rights to authorize or prohibit         the cable
     retransmission   of   a   broadcast    may   be   exercised   only   through   a
     collect ing society.
(2) A holder of a right       who has not transferred the management of his
     rights to a collecting society shall have a claim to compensation on
     the collecting society which manages rights of the same category.            His
     claim shall be confined to the sum which he would have received if he
     had mandated the collecting society to exercise his rights.
Article 12: Exercise of the cable retransmission right by broadcasting
organizations
Article 11 shall   not   apply   to the rights exercised        by a broadcasting
organization in respect of its own transmissions.
 ---pagebreak---                                      - 60 -
Article 13: General contracts
Member States shall ensure that a party seeking the conclusion of a general
contract   is for  its part obliged to submit collective proposals for an
agreement.
Article 14:   Mediators
(1) Where no agreement is concluded regarding authorization of the cable
     retransmission of a broadcast, Member States shall ensure that either
     party   may  call   upon  the assistance  of one or    several   mediators
     referred to in paragraphs 2 and 3.
(2) The   mediators    shall  have  the  task of  providing   assistance   with
     negotiation.   They may also submit non-binding recommendations to the
     parties.
(3) Member States shall ensure that the mediators are so selected that
     their impartiality is beyond doubt.
Article 15;   Prevention of the abuse of negotiating positions
Member States shall     ensure that  the parties do not    improperly   prevent
negotiation regarding authorization for cable retransmission.
 ---pagebreak---                                     - 61 -
CHAPTER IV:  GENERAL PROVISIONS
Article 16:  Competition rules
This Directive shall    be without   prejudice  to the Community    competition
rules.
Article 17:  Collective administration of rights
The regulation of the activities of collecting societies shall be a matter
for the Member States.
Article 18:  Final provisions
1.   Member States   shall  bring   into  force   the  laws,   regulations  and
administrative  provisions   necessary   to  comply   with   this  Directive by
1 January 1995.   They shall immediately inform the Commission thereof.
When Member States adopt these provisions, these shall contain a reference
to this Directive or shall be accompanied by such reference at the time of
their official   publication.  The procedure    for such   reference  shall  be
adopted by Member States.
2.   Member States shall communicate to the Commission       the provisions of
national law which they adopt in the field covered by this Directive.
Article 19
This Directive is addressed to the Member States.
Done at Brussels,                               For the Council
                                                 The President
 ---pagebreak---                                - 62 -
                NOTE ON THE FINANCIAL IMPACT
The present proposal does not have budgetary consequences
for the Community.
 ---pagebreak---                                                       - 63 -
        NOTE ON THE EFFECT ON C O M P E T I T I V E N E S S AND                  EMPLOYMENT
I. What          Is the main           Justification              for  the  measure?
      establishment               of   the    Internal          market;
      definition            of common         rules of          the game    for  a European
      audovisual            area;
      strengthening of                 the position             of European     culture   by  the
      provision           of    remuneration            to those       Involved    In the
      production            and     dissemination of protected                  works;
I I.      C h a r a c t e r i s t i c s of    the enterprises             concerned
The proposal              affects       firms of all              descriptions.      Film
p r o d u c e r s , phonogram           p r o d u c e r s , satellite       broadcasters     and
cable o p e r a t o r s         vary    from m u l t i n a t i o n a l s   to medium    size
national          companies.            Authors         and performers        normally    conduct
business          as private           Individuals or               as small   companies.
III. What          obligations            are     Imposed         directly   on  enterprises?
Satellite           broadcasting            o r g a n i z a t i o n s and cable   operators
which       broadcast           or    retransmit          protected      works will     have  to
respect         the rights of a u t h o r s , of p e r f o r m e r s            and  of
p r o d u c e r s of      film works and phonograms                     to allow    the use of
their       works.          The participants of n e g o t i a t i o n s            concerning
cable       retransmission              rights will             have   to accept    the
 ---pagebreak---                              - 64 -
Intervention of one or more mediators and may not
unreasonably refuse negotiations.
 IV. What obligations may be Imposed    Indirectly on
     enterprises by local authorities?
None
V. Are there any special measures for SMEs?
No
VI.  What foreseeable effects are there?
(a)  on the competitiveness of enterprises?
Rightholders will benefit from the direct effect of
receiving remuneration for the broadcasting by satellite or
the retransmission of their works.     The directive will
enhance their competitiveness by establishing the country of
origin principle for authorization of satellite
broadcast ing.
Film right owners, in particular, which have acquired the
relevant rights of use In one Member State will be given
legal security to be able to exploit these rights by
satellite broadcasting  In competition with rightholders In
other Member States.   This will   lead to a more competitive
environment favourable to the strengthening of a single
European audiovisual area.
The competitiveness of broadcasters and cable-operators will
be increased by the enhanced   legal security with regard to
the applicable rules on copyright and neighbouring rights.
 ---pagebreak---                                                - 6*3 -
(b)    on     employment
The  establishment             of    common    rules     of   the g a m e     for  all
economic       operators          implied     in a s a t e l l i t e  broadcast       or  a
cable    retransmission              will   promote       the  production         and
distribution         of    broadcast        programmes        and    should      therefore
have   a positive           impact      on   employment.
VII.   What       consultations          have   there      been    on    this    proposal?
A discussion         paper       on    "Broadcasting        and    Copyright       In   the
Internal       Market"       on    copyright      questions         concerning      cable    and
satellite         broadcasts         was   published       In N o v e m b e r   1990.    All
Interested         circles        (authors,     performers,          broadcasters,
phonogram         producers,          film  producers,        cable-operators)           were
invited       to p a r t i c i p a t e  In a w r i t t e n  consultation          procedure
In D e c e m b e r  1990     and      January    1991.      A hearing         on  the
discussion         paper     was      held  on  5 February          1991     In  Brussels.
Professionals          agreed        on  the   necessity       for    Community       action
in t h i s    field.
 ---pagebreak---  ---pagebreak---                                          - G(,
                                                                     ISSN 0254-1475
                                                              COM(91) 276 final
                                                      DOCUMENTS
EN                                                                          15 08
                                 Catalogue number : CB-CO-91-384-EN-C
                                                             ISBN 92-77-75616-0
Office for Official Publications of the European Communities
L 2985 Luxembourg