CELEX: 51991PC0242
Language: en
Date: 1991-07-09
Title: PROPOSAL FOR A COUNCIL DIRECTIVE ON THE ADOPTION OF STANDARDS FOR SATELLITE BROADCASTING OF TELEVISION SIGNALS

m
        COMMISSION OF THE EUROPEAN COMMUNITIES
                                          C0M(91) 242 final - SYN 350
 yfc&w-
                                          Brussels, 9 July 1991
•Ht*
                                  Proposal for a
                                COUNCIL DIRECTIVE
             on the adoption of standards for satellite broadcasting
                              of television signals
                          (presented by the Commission)
 mm
 ---pagebreak---                                              -1 -
                           EXPLANATORY MEMORANDUM
The current situation
1.   Direct broadcasting by satellite of television programmes is currently regulated by
     Council Directive 86/529/EEC of 3 November 1986.1 This lays down the
     obligation to use the MAC/Packet system for broadcasts transmitted from high-
     power satellites (BSS satellites).
 2.  The text of that directive is the result of a series of transformations of the original
     idea as it had been clearly expressed in the Communication from the Commission
      to the Council of 24 May 1985.2 This aimed to have the MAC/Packet system
      adopted as the exclusive European standard, without any distinction between
      different satellites and avoiding the use, even for a transitional period, of other
      standards in the different Member States.
 3.  By contrast, the legal position resulting from the combined application of the
     dispositions contained in articles 1 and 2 of the same Directive, has produced a
     dual regime for satellite broadcasts: one regime regulated by the Directive for
     high-power satellites and another regime, with no restrictions, for the other
     satellites which lie outside the field of application of the Directive.
1
    O J. n° L 311,6 November 1986, p. 28 ff.
2
    COM (85) 264,24 May 1985.
 ---pagebreak---      Th» dual regime has led in turn to a double market. Technological development
     has created favourable conditions for medium-power satellites, which have started
     transmitting using the PAL and Secam standards.
     Substantial investments have been made in the different systems over the same
    period On the one hand, the European industry has invested in the development
    of MAC wkh HDTV as the aim; on the other hand, a good number of
    feroajdeastcra and operators have invested in satellite broadcast»! using
    PXL/Seaan.
I.  Gives the sftaatSo* described above, it has become very difficult for the
    Community to achieve the objective it has set itself - the development of HDTV
    using die European HD-MAC standard, passing through the intermediate step of
    the D2-MAC standard, following the approach of the EUREKA-95 pepiect. This
    afiows a transition to HDTV following the principle of compatibility with existing^
    systems, a clear advantage for consumers.
    This objective was considered as being of strategic interest for Europe in two
     decisions adopted unanimously by the Council, on 27 April 1989 (89/337/EEC)
     and 7 December 1989 (89/630/EEC).3
 5.  The concrete problem posed now is that of working out how to pass from the
      divergent evolution resultingfromthe 1986 Directive to a convergent evolution.
  »  OJ. * 0 L 142,25 May 19», p. 1 ft; OJ. L3S3, 13 December 1989, p. 30 ff.
 ---pagebreak---     In the present situation, characterized by a double market with seriously differing
    interests, it is not sufficient to draft and to adopt a legislative decision which seeks
    on its own to replace the Directive which expires on 31 December 1991. That is
    certainly a necessary condition, but not a sufficient condition.
    It is necessary in parallel to work out and make a reality of a credible scenario for
    this decade, by means of a firm commitment by all the economic players
    concerned.
6.  This overall strategy can end a period of uncertainty which has had its effect on
    the path towards European HDTV. Furthermore, it will allow the Community to
    carry out its regulatory duty in the area of norms and standards more effectively in
    market terms.
    As stressed in the Communication from the Commission to the Council of 16
    November 1990 on industrial policy in an open and competitive environment,4
    standards promote competitiveness by:
             lowering costs for producers;
             shaping customer preferences for products by their familiarity;
             enabling the emergence of new markets, particularly for developing
             technologies, where they are becoming a pre-condition for industrial
             production or marketing.
4
   COM (90) 556,16 November 1990.
 ---pagebreak--- 7. The specific characteristics of the television sector            display very strong
   interdependence between the various players.
   On the one hand, the market for TV receivers cannot develop without an
   adequate supply, in both quantitative and qualitative terms, of programmes using
   the new standards, as well as enough hours of transmissions, while on the other
   hand it would not make sense to start up transmissions without the existence of
   enough receivers. Moreover, neither of these two operations can take place unless
   one can count on sufficient satellite capacity.
8. All the considerations expressed above led the Commission to take the initiative
   of bringing together around a table the different categories of actor, to solicit their
   active participation in the development of an overall strategy. This strategy
   includes both the legal and standards aspects (clear definition of the new regime
   from 1 January 1992, with a guarantee to preserve the rights legitimately acquired
   during the current situation of a dual regime), as well as the aspects more directly
   relating to the area of activity of enterprises (essentially a programme setting out
   dates and figures with the aim of progressively developing a market for television
   in D2-MAC and HD-MAC).
9. In order to implement the strategy described above, the Commission has
   undertaken consultations of the parties concerned: industry, private and public
   broadcasters, satellite and cable operators, programme producers. Two plenary
   meetings were held on 28 February and 27 March 1991, prepared and followed up
   by many bilateral and multilateral contacts and meetings.
 ---pagebreak---                                            5-
The instruments
10. On the basis of the above considerations, which h•-- "Vom the start enjoyed a wide
    consensus among the operators consulted, the Commission has identified a double
    instrument to reach these objectives.
    This double instrument consists of the combination of the new Directive with a
     "Memorandum of Understanding" (MOU). Under this MOU, the operators
     concerned take on reciprocal commitments in the framework of a coordinated
     action aimed at the development and promotion on the market of equipment and
     services in the D2-MAC standard and with the 16:9 format.
11. The inseparable link between the Directive and the MOU will be established by
     the insertion into the recitals of the Directive of an explicit reference to the
     existence of the MOU and to its content.
    Additionally, the participation of the Commission in the MOU and the projection
     of incentives from the Community budget will make it possible to ensure
    consistency between the standards-setting dimension, which lies within the
    competence of the Community institutions, and the operational dimension, which
    pertains to the enterprises concerned.
12. In the course of the many contacts between the parties concerned, major elements
    of consensus have emerged. There is a common desire concerning the basic
    content of the MOU. The specific points which are still open can be resolved
    taking into account the common interest in achieving agreement on such an
    important matter.
13. The     Commission    presented    the  main   lines  of   its  strategy  to   the
    Telecommunications Council on the occasion of its meeting in Luxembourg on 3
 ---pagebreak---     June 1991. Though in the presence of views which were still divergent, the
    Commission was unanimously encouraged to carry on with its approach; stress was
    laid in particular on the great importance of and the intimate association between
    the two instruments - the Directive and the MOU.
    The conditions therefore exist to start the procedure which should lead to the
    adoption of the new Directive by Council before the end of the year 1991, in
    parallel with the formal completion of the MOU.
The Directive
14. The draft Directive proposed for examination by the Commission is based on five
    key points:
     a.      HD-MAC is defined as the sole European standard for HDTV. This
             objective will be reached by means of an intermediate standard, D2-MAC,
             especially in 16:9 format.
      b.     All new services and all new satellites, which become operational after the
              date of implementation of this Directive, must use the D2-MAC standard
              exclusively.
        c.
               Services in PAL/Secam which are in operation by 3.1 December 1991 may
               continue, without any date being set directly or indirectly for the end of
               their transmission, and notwithstanding the points set out in item b. above.
                The MOU, at the same time, will provide for incentives for the
                simultaneous transmission in D2-MAC of the services in question
                ('simulcast').
 ---pagebreak---     d.       Equipment (satellite receivers and TV sets above 52 cm) put on sale in the
             EC from 1 January 1993 onwards, will have the obligation to contain the
             mechanisms necessary to give them the capacity of receiving D2-MAC.
    e.       The duration of the Directive will be ten years. The Commission will
             provide an evaluation report every two years, to be sent to the Council and
             the European Parliament.
The Memorandum of Understanding (MOU)
15. The MOU forms the indispensable second pillar of the Commission's present
     strategy. It originates from the Council Decision of 27 April 1989 (89/337/EEC)5
     which provides for an action plan in the area of HDTV.
 16. Signature of the MOU is open to all interested parties (industrialists, private and
     public broadcasters, satellite and cable operators) as well as the Commission. The
      MOU will constitute a legally binding agreement for all the parties involved,
      including to this end an arbitration clause to allow its interpretation and a choice
      of jurisdiction in case of disputes.
 17. The MOU is based on five key points:
      a.      A coordinated action to promote the D2-MAC standard in 16:9 format
              with a view to the introduction of HDTV.
      b.       Reciprocal, quantified and legally binding commitments of the signatories
               laying down, for example, the minimum number of TV sets of each type to
               be produced, the number of hours of programmes to be broadcast, the
               availability of satellites. (This agreement will not in any way include
 5
    O J. n° L142,25 May 1989, p. 1 ff.
 ---pagebreak---                                               -8
               agreements concerning selling prices or market shares and, in any case, it
               is obliged to respect the competition rules laid down in the Treaty.)
     c.       A system of incentives, financed notably by the Community, and aiming in
              particular to facilitate 'simulcast' and to support the start of broadcasts in
              D2-MAC.
     d.       The creation of a consortium between the signatories, with the
              participation of the Commission realized in the most appropriate way.
              The role of the consortium will be to coordinate the promotional action, to
              administer the Community incentives and to supervise the respect of the
              commitments undertaken by the parties involved.
     e.       The duration of the MOU will be five years, renewable.
Implementation
18. The Commission aims to achieve, before the end of this year, the adoption of the
     Directive and, in the same context, the signature of the MOU, the text of v.h-«.
     will be communicated to the European Parliament and the Council.
 19. This will make it possible to achieve a double result: on the one hand, it will
      definitively confirm the Community strategy aimed at the introduction of the HD-
      MAC standard as a common European standard; on the other hand, it will provide
      the equipment makers, the broadcasters, the satellite and cable operators, the
       programme producers as well as consumers with a reliable basis to guide their
        decisions on the market.
  20. Subsequently, the aspect concerning the financing of the system of incentives will
        be addressed. The Commission envisages the commitment to this purpose of a
 ---pagebreak---     sum of the order of about 100 MECU per year over a five-year period. The
    informal discussions around the MOU have taken this direction. As far as 1992 is
    concerned, the PDB already foresees a sum of this order of magnitude under
    several lines.
21. In parallel with the reinforcement of the 'broadcasting standards' side of the
    European HDTV strategy, implemented through the joint effect of the MOU and
    the Directive, the development of the programmes side is also a priority both for
    promotion of the 16:9 format and for the effective introduction of HDTV services
     from 1995 onwards.
 ---pagebreak---                                      - 10 -
                                 Proposal for a
                               COUNCIL DIRECTIVE
           on the adoption of standards for satellite broadcasting
                             of television signals
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic Community,
and in particular Article 100a thereof,
Having regard to the proposal fro» the Commission,
In cooperation with the European Parliament,
Having regard to the opinion of the Economic and Social Committee,
Whereas Council Directive 86/529/EEC1 made provision for review;
Whereas the Community, through Council      Decision 89/337/EEC2 and Council
Decision   89/630/EEC3,   recognized    the  strategic    importance   of   High
Definition Television (HDTV) for the European consumer electronics industry
and for the European television and film industries, and established the
strategy framework for the introduction of European HDTV;
Whereas   Council   Directive   86/529/EEC,   in  particular    in  Article   2,
established   a  dual  regime  by  a  limitation  of  the  application   of  the
Directive to only one type of satellite, and as a consequence a dual market
appeared with the use of MAC standards in Broadcasting Satellite Service
(BSS) and mainly PAL and SECAM in Fixed Satellite Service (FSS);
     1    OJ No L 311, 6.11.1986, p. 28.
     2    OJ No L 142, 25.5.1989, p. 1.
     3    OJ No L 363, 13.12.1989, p. 30.
 ---pagebreak---                                       - 11 -
Whereas   in order   to reach Community goals as set out        in the Decisions
mentioned above and in order to contribute to the achievement of a single
market in satellite broadcasting of television signals as provided for in
Article 8(a) of the Treaty, it is necessary to undertake steps to create a
convergence of standards, using in parallel a regulatory instrument, and an
agreement between major actors in the market;
Whereas it is in the best interest of European consumers to follow a path
towards HDTV based on the criteria of compatibility and evolution, in order
to avoid   discontinuities and duplication of investments;
Whereas HD-MAC has been developed as the European transmission standard for
HDTV services based on those criteria of compatibility and evolution and
D2-MAC offers the best available path towards the development of HDTV with
wide-screen 16 : 9 D2-MAC as the main step in that direction;
Whereas   there   is a  need   to  establish   common  standards    for  satellite
transmission as an enabling element for effective free market competition
taking   into account   that  standards promote competitiveness by        lowering
costs for producers, shaping customer preferences for products by their
familiarity, and enabling the emergence of new markets, particularly for
developing   technologies,   where   they  are   becoming  a   pre-condition   for
 industrial production or marketing*,
Whereas services established during the period of application of Directive
86/529/EEC according to its provisions should not be forced to a compulsory
stop or change; however, incentives may be provided in order to support, in
addition, the use of MAC standards,        in particular    through   simultaneous
transmissions ('simulcast');
Whereas in the interests of the consumer        it is necessary to establish a
common   standard   for  conditional   access   systems   for   D2-MAC   and  HDTV
services;
 ---pagebreak---                                        - 12 -
Whereas cable TV     and  Small   Mister   Antenna  TV   (SMATV)  networks   ?ire H
reieva.it feature i.i the television infrastructure of many Member Stater r> 1
will bo very important to the future of HDTV services;
Whereas Decision 89/337/EEC     called for an action plan for the Introduction
of HDTV to be prepared in close coordination at Community level between ths
Commission, the Member States and the European industry;
Whereas broadcasters, satellite operators, equipment          manufacturers, and
cable operators are fully committed to the earliest possible introduction
of 16 : 9 D2-MAC services, in conformity with the objectives set out in
Decision 89/337/EEC and, accordingly,        have declared    their   intention  to
enter into a Memorandum of Understanding to which the Commission will also
be a party;
Whereas the Memorandum of Understanding will set out the obligations of the
respective parties for the development         and promotion of    16     9 D2-MAC
services   in Europe  in accordance with the terms and provisions of this
Directive and will constitute an integral part of the overall strategy for
the introduction of HDTV;
Whereas European research efforts must stay in the forefront of all new
significant   developments   such    as  a   trend  towards   digital    television
broadcasting emissions and Europe has to consolidate its research efforts
through collaboration;
Whereas   in view of the foreseeable       technical   progress   in this sector,
account should now be taken of any subsequent developments of the existing
systems and provision made for an eventual review of this Directive;
Whereas it is in the general       interest as well as in the interest of the
major actors in the market that this Directive should be implemented at the
earliest possible date,
HAS ADOPTED THIS DIRECTIVE:
 ---pagebreak---                                       - 13 -
                                    ARTICLE 1
Member   States   shall  take   all   measures   to  promote   and   support  the
introduction and development     of advanced satellite broadcasting      services
for television programmes, using the HD-MAC standard for High Definition
Television transmission and the D2-MAC standard for other transmission in
the 16 : 9 aspect ratio format.
                                    ARTICLE 2
1.     For any transmission of a television service in the High Definition
       Television format only the HD-MAC standard may be used.
2.     For  any  transmission  of   a 625   line  satellite   television  service
       receivable by viewers using domestic satellite receiving equipment,
       even if such transmissions are intended to be redistributed by cable
       networks, only the D2-MAC standard may be used:
             in respect of any service in 16 : 9 aspect ratio format;
             in respect of any service carried by a satellite using the BSS
            frequency band (11.7 to 12.5 GHz );
             in respect of any satellite transmission of a service, starting
            after the date of implementation of this Directive, or using a
            satellite    brought     into   operation    after    the   date   of
             implementation of this Directive.
                                    ARTICLE 3
Satellite services in operation on 31 December 1991 and using D-MAC, PAL or
SECAM standards, may continue to use the same standard for 625 lines 4:3
format transmissions after    the date of    implementation of this Directive,
notwithstanding the provisions set out in the third indent of Article 2(2).
 ---pagebreak---                                         - 14 -
                                      ARTICLE 4
dumber   States sfr&ll take al! measure."- to ensure thzt        <-? frrn *! .!*?-;!;..* rv
1993, ali new television sets with a scroon size grea*^?' than 52cn a'id i!!
new sateSNt© receivers, for sale within the Community have jnefuded within
them the necessary means to receive D2-MAC signals.
                                      ARTICLE 5
Member States shall take all measures to ensure that
       any   new   terrestrial     redistribution     system,    or    any  existing
       terrestrial   redistribution     system   having   the  necessary   technical
       capability, shall be configured in such a way that HD-MAC signals can
       be transmitted through the network from head-end to individual homes:
       in the case of cable TV and SMATV systems channels in the hyperband
       (300-450 MHz) each having 12 MHz bandwidth shall be allocated for
       this purpose; existing terrestrial redistribution systems not having
       the necessary technical capability, shall be configured as indicated
       above when their operators decide on a technical            upgrading of the
       network;
       if cable operators decide the redistribution by cable of programmes
       received by them in the 16 : 9 aspect ratio format and the D2-MAC or
       HD-MAC standard, operators shall redistribute these programmes also
       in the 16 : 9 aspect ratio format and the D2-MAC or HD-MAC standard.
                                      ARTICLE 6
In the case of all services using the D2-MAC standard, which are encrypted
and employ a conditional access system, Member States shall take all the
necessary measures to ensure that only a conditional access system fully
compatible    with   D2-MAC    and     standardized    as   such    by   a  European
standardization    organization     by   the   date  of    implementation   of      this
Direct ive, is used.
 ---pagebreak---                                       - 15 -
                                    ARTICLE 7
This Directive shall apply until 31 December 2001. Every two years, the
Commission shall submit to the European Parliament, to the Council and to
the Economic and Social      Committee a report on     the application of   this
Directive  and,   if   necessary,   make   further  proposals  to  adapt  it  to
developments in the field of satellite television broadcasting.
                                    ARTICLE 8
1.    Member  States    shall  bring   into   force the  laws,  regulations  and
      administrative provisions necessary to comply with this Directive no
      later than three months after        the date of   its notification. They
      shall forthwith 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 texts of the
      provisions of national     law which they adopt   in the field covered by
      this Direct ive.
                                    ARTICLE 9
This Directive is addressed to the Member States.
Done at Brussels,                       For the Council
                                        The President
 ---pagebreak---                                                                      ISSN 0254-1
                                                              CQM(91)242fïf I
                                                      DOCUMENT
EN                                                                         16 is
                                 Catalogue number : CB-CO-91-3Q4-EN-C
                                                             ISBN 92-77-74180-5
Office for Official Publications of the European Communities
L-2985 Luxembourg