Although it suggests that scenario in which the UK leaves the EU without agreement (a ‘no deal’ scenario) remains unlikely given the mutual interests of the UK and the EU in securing a negotiated outcome, the Department for Digital, Culture, Media and Sport (DCMS) has issued guidance as part of a series of technical notices setting out information to allow businesses and citizens to understand what they would need to do in a ‘no deal’ scenario, so they can make informed plans and preparations.
The DCMS notice sets out the legal status for audiovisual services that media services providers may wish to consider in the event that the UK leaves the EU in March 2019 with no agreement in place.
After March 2019, if there is ‘no deal’, the Audiovisual Media Services Directive (AVMSD) and the ‘country of origin’ principle, which says that providers of broadcasting channels and of video on demand services based in one country are only subject to one set of rules and regulation from this ‘country of origin’ will no longer apply to services under UK jurisdiction that are broadcast into the EU, as the UK would be classified as a third country.
Recital 54 of the AVMSD sets out that EU countries are free to take whatever measures they deem appropriate with regard to audiovisual media services that come from third countries, provided the measures comply with Union law and the international obligations of the Union.
If media service providers rely on the ECTT for distribution of a service in a no-deal scenario, they would need to be mindful of the fact that the ECTT does not have the same enforcement mechanisms as the AVMSD. There is a standing committee to resolve disputes, but this has not met since 2010. Article 26 of the ECTT also contains provision for arbitration.
The White Paper on the future relationship with the EU noted that the UK will not be part of AVMSD after exit and therefore the country of origin principle will not apply to the UK.
“Before exit in March 2019, you would need to assess on a case-by-case basis whether your current licence would continue to be accepted in the EU countries where the service is made available, and seek independent local advice if necessary,” says the DCMS. “It is your responsibility to take measures to ensure that you can obtain a valid licence or authorisation to ensure compliance if it is required.
“You should assess if a service you provide is available in the EU. If it is a UK service, and not receivable in the EU, you would not need to take any action. The Ofcom licence would still be valid on exit.”
“If the service is available in the EU and only available in one or more of the 20 ECTT countries noted above, freedom of reception should be permitted in accordance with ECTT. However, you should seek local legal advice to check how national law deals with ECTT obligations to permit freedom of reception of the service and what action (if any) needs to be taken. Ofcom licences should still be recognised but the process may depend on national law.”
If a service is available in the EU and available in one or more of the seven non-ECTT countries (Belgium, Denmark, Greece, Ireland, Luxembourg, The Netherlands and Sweden) licensees would need to ensure that the service is correctly licensed (or authorised) on exit day. How this is done is dependent on a number of factors as there is a hierarchy of jurisdiction (noted above) in the AVMSD which determines which EU country regulates the service.
“You should be aware that you may need to have two licences,” continues the guidance. “You would need an Ofcom licence for services receivable in the UK. An Ofcom licence can also cover services that are receivable in other ECTT countries (because under the ECTT those countries must recognise Ofcom licences). However, Ofcom licences would not be capable of covering services receivable in EU countries that are not party to the ECTT. There are seven such countries, in which a further licence may be needed. You should consider taking local legal advice on the licensing requirements in those countries.”
“The ECTT does not provide for freedom of reception for video-on-demand services, and so providers of these services will need to comply with the requirements of AVMSD for jurisdiction as set out above. The regulation and authorisation of video-on-demand service is determined locally and providers should seek local legal advice with regard to the status of their service.”
“If you take no action, you’re likely to be viewed as a third-country broadcaster broadcasting into the EU,” warns the DCMS. Under AVMSD, this would mean that EU countries are free to impose through national laws further conditions on transmitting services into their territories – although subject to the provisions of the ECTT itself. Licensees would need to take into account that the enforcement mechanisms of the ECTT are limited.
“After exit, if your company wishes to retain your head office in the UK you can do so whilst, at the same time, qualifying for jurisdiction in an EU state (and so being able to obtain an AVMSD licence via that EU state),” says the DCMS. Under AVMSD, if decisions of a provider are taken in an EU country that provider will fall under the jurisdiction of that EU country provided a significant part of its workforce is located in that EU country. This would be the case even if the head office remained in the UK. “However, we advise you to seek local legal advice on the requirements in the EU country concerned,” it adds.
“If you do not have a significant workforce within a EU country, the technical criteria may still apply, as set out in Article 2 (4) AVMSD,” notes the DCMS. In practice this means if a service is provided via an uplink in a EU country then jurisdiction would fall to that country. If there is more than one uplink, jurisdiction will fall to the EU country where the first uplink was established. If the uplink is in the UK, the jurisdiction will (however) fall to the EU country which operates the relevant satellite capacity. In most cases, this would either be Luxembourg or France, as the majority of EU broadcasting satellites are operated by these two countries. These countries have different notification systems and licensees should contact the local relevant regulator to ascertain the local regulatory requirements.
As part of the ‘no deal’ planning, the UK will make provisions in domestic legislation for the continuation of Ofcom licences from Day 1 following EU exit, so that broadcasters can continue to broadcast in the UK, without having to reapply for their licence under any new framework. In addition the government will ensure that the domestic legislation in relation to audiovisual media services will continue to be operable.
“It is in everyone’s interests to secure a good deal for audiovisual media services for both sides, but we have a duty to plan for the alternative,” says the DCMS, suggesting that the government has taken a responsible approach to prepare for all eventualities.
“This notice is meant for guidance only. You should consider whether you need separate professional advice before making specific preparations,” it concludes.
The guidance is published by the United Kingdom government and is available on its web site. Media Summits will be holding another Brexit Strategy discussion and networking event in London on November 22nd, going through the options and implications for broadcasters and media companies.