Opinion on the audiovisuel draft legislation

Initially limited to reforming the organization and financing of public audiovisual services, the draft legislation amending the French Superior Audiovisual Council Act of September 30, 1986 was the subject of an initial consultation with the French Superior Audiovisual Council last October.
After deferring the presentation of this bill to Parliament, the government decided to complete it by adding a second section essentially devoted to the private audiovisual industry. On April 12, the French Superior Audiovisual Council issued the following opinion on the new schemes:

The second part of the draft legislation on audiovisuel responds to major shortcomings in existing legislation, particularly as regards satellite diffusion. It thus meets the Council's expectations, while at the same time transposing into French law several provisions of the Television without Frontiers Directive that France had to take into account without delay.
The Conseil can only approve of the government's desire to increase the role of regulation, particularly with regard to broadening the criteria for non-renewal of licenses. In the same spirit, the Conseil believes that a further step should be taken with the extension of its contractual powers.

I - On the various provisions of the draft legislation

- Provisions concerning the independence of information with regard to public contracts
The Board approves the objective of transparency of information with regard to public contracts and delegations of public contracts held by shareholders. It takes note of the new mission thus conferred.

- On the adoption of a legal manager for satellite diffusion
The Conseil considers that the new definition of "distributor of services" by cable or satellite merits further clarification. The contractual relationship between service distributors and service editors, with a view to providing the public with a bundled supply of services, cannot be reduced to the mere function of distribution. In any case, the Council notes that this notion of "service distributor" should be included in article 34 of the law on the authorization to operate "cable networks".
The Conseil notes that, in accordance with its wishes, the regulatory regime applicable to services distributed by cable or offered by satellite is identical. But it is astonished that, in the case of satellite services, its right of review only concerns the share of services independent of the distributor, itself defined by decree.
Furthermore, the fifteen-day period given to the French Superior Audiovisual Council to object to the operation of a bundled service supply, or to its modification, is clearly too short. It would be advisable to extend this period to one month, and to specify that requests for modification are subject to prior notification to the Conseil.

- The Conseil's powers regarding the composition of cable service plans
The French Superior Audiovisual Council approves of the increased powers conferred on it in the area of the composition and modification of the supply of services distributed by cable, but considers that the fifteen-day period given to it by the draft legislation for reacting to proposed modifications does not constitute a reasonable timeframe. It should be extended to one month, and it should be specified that requests for modifications are subject to prior notification to the Conseil.
What's more, cable audiovisuel networks and wireline telecommunications networks tend to offer the same services to subscribers today - from telephone to TV channels. It is therefore appropriate to put an end to the coexistence of two distinct legal regimes for their establishment, one stemming from the P & T code, the other from the 1986 law. The Council is in favor of aligning the regime for the establishment of all wireline networks with the P & T Code.

- Criteria for renewing a license without a summon to tender
The inclusion of press offenses and criminal offenses against minors, as well as the adoption of two new criteria for non-renewal, is positive. The Conseil approves this provision, which will enable it to exercise better regulation when renewing licenses, particularly for radio stations.

- Technical improvements to the legal sanctions scheme
The Conseil considers that the extension of the legal sanctions scheme to all cable and satellite channels, as well as to distributors of satellite and cable service bundles, is justified.
Likewise, the inclusion of a press release in the Council's programs under 1° of article 42-1 provides the Council with a rapid means of intervention.
The Board therefore endorses these improvements, which it had itself called for.

- On the lack of recognition of a broader conventional power demanded by the Conseil
The proliferation of audiovisual communication services and the speed of technical developments make it illusory and inappropriate to apply detailed legislative and regulatory norms to the audiovisual industry. Legislative texts cannot cover every possible situation. It is up to the law and decrees to lay down the general principles and managerial framework, while the regulation authority will adapt the general rules to the specific nature of each audiovisual communication service and to developments in the situation and the market, within the framework of a broader power of agreement. It is therefore essential for the law to give the French Superior Audiovisual Council the same power to modulate obligations as it already has with regard to significant listening hours.

It is regrettable, therefore, that the draft legislation leaves it to the regulatory authorities to set obligations relating to the contribution of service editors to the development of the production of cinematographic and audiovisual works, to the transfer of broadcasting rights and to the limitation of the duration of these rights, as well as to the broadcasting regime for long-term cinematographic works.

While it is up to the regulatory authorities to lay down the general principles, and in particular the thresholds of obligation, the methods of application and the necessary modulations must be the subject of agreements between private broadcasters and the French Superior Audiovisual Council, and of specifications for the public sector. With regard to the matters listed in articles 27 and 33 of the law, giving the Conseil a broader power to enter into agreements would enable the general rules to be adapted with the necessary diligence to the diversity of operators.

- About the Competition Council
The Conseil takes note of the government's decision to bring the audiovisuel industry into line with ordinary merger law. However, in the name of the constitutional objective of plurality, it wishes to retain general jurisdiction.
Accordingly, the French Superior Audiovisual Council questions the exclusive competence given to the Minister of the Economy and Finance, who is responsible for deciding whether or not to refer a matter to the Competition Council and, consequently, to the French Superior Audiovisual Council.
In this respect, it would be desirable for the draft legislation to make provision for the Minister of the Economy and Finance not to give a ruling on mergers or proposed mergers without first referring the matter to the French Superior Audiovisual Council for an opinion, even if he or she does not refer the matter to the Competition Council.
Furthermore, the Conseil would like to be able to refer mergers to the Conseil de la Concurrence for an opinion.

- On the multiplicity of authorization criteria
The list of additional criteria set out in article 17 II b) and c) of the draft legislation is superfluous. In fact, it repeats and refines the criteria already applied by the Conseil in the name of plurality of socio-cultural trends and diversity of operators. What's more, these criteria are likely to appear contradictory to the Council's powers of regulation and assessment, and a source of numerous disputes.

- On streamlined proceedings
The draft makes provision for a change in the proceedings. While the concern for transparency that motivates this new scheme is commendable, the proceedings are cumbersome. The Conseil has six months in which to conclude an agreement with the operator, failing which the authorization will not be renewed. Rather than publishing in advance the points of the agreement that the Board wishes to see revised, the proceedings could usefully be reversed: the Board would first hear the applicant, then interested third parties, and finally publish the points of the agreement that are to be renegotiated.

- On formal notice and legal sanctions
The French Superior Audiovisual Council notes that under the provisions of the draft legislation, formal notice becomes automatic. It considers this to be a reduction in its regulatory powers, likely to lead to an automaticity of sanction that is legally questionable, as confirmed again recently by the French Constitutional Council.
With regard to legal sanctions, the wording should be amended to make provision for the rapporteur appointed by the vice-president of the Conseil d'État not to attend the deliberations, in view of the recent case law of the final court of appeal concerning a sanction handed down by the Commission des opérations de bourse.
The French Superior Audiovisual Council also points out that, in order to further improve the legal sanctions proceedings, the draft legislation could set a three-month deadline for the member of the Conseil d'État to submit his or her report.

II. Points missing from the draft legislation

- French-language song
The Conseil regrets that none of the flexibility measures it proposed have been introduced. Moreover, the chapter headings of the decree common to cable and satellite channels fail to make provision for French-language song quotas. This decree will therefore be unable to extend French-language song quotas to cable and satellite radio services, which are bound to develop.

- On the transposition of the "norms and signals" directive
The Conseil also notes the absence of provisions to transpose the "standards and signals" directive on the compatibility of access control schemes, which naturally belonged in the current draft legislation. The French Superior Audiovisual Council should logically be recognized as competent by law to settle disputes relating to the use of access control schemes, as these are clearly audiovisual rather than technical challenges.

- Substantial changes
In the event of substantial modification of the data on the basis of which the authorization was issued (article 42-3 of the law), it would be highly desirable to make provision for the Conseil, by reasoned decision, to make the maintenance of the authorization subject to conditions defined by reference to the criteria mentioned in articles 29 and 30 of the amended law of September 30, 1986. Such a provision is necessary for the effective exercise of regulatory powers. At present, a change in the basic data of the authorization can only lead to its withdrawal, whereas a conditional maintenance of the authorization would be a useful proceedings, comparable to the instruments used by competition authorities.

- On digital terrestrial broadcasting
The Conseil also regrets the absence of schemes for terrestrial digital audiovisuel. It is imperative to introduce a specific legal manager to enable the launch of digital terrestrial television and the development of digital radio, as of the April 10, 1996 law on trials in the fields of information technologies and services. The Conseil wishes to emphasize that the schemes for cable and satellite in the draft legislation submitted for its opinion cannot be transposed identically to digital terrestrial broadcasting. The Conseil's full authorization powers are essential to guarantee the plurality and diversity of operators, in particular to allow the arrival of new entrants and local and regional operators.
Finally, it would be particularly useful to amend article 1 of the amended law of September 30, 1986, by adding to the list of limits to freedom of communication, the reservation of frequencies for digital use, if the allocation of frequencies obstructs future digital development projects.

- On the general architecture of the draft legislation
In order for its opinion to be part of a global reflection, the Conseil would have liked to have been able to give its opinion on the draft legislation as a whole, including the planned government amendments, which, as far as the public audiovisual industry is concerned, should significantly modify the architecture of the draft legislation in line with the developments desired by the Conseil itself.

The letter accompanying the Council's opinion

"Dear Minister,

(...) The Conseil wishes to emphasize that, in addition to the relaxation of the criteria for non-renewal of authorizations already provided for in the draft legislation, the most necessary change for better regulation of the radio sector, mentioned at the end of the Conseil's opinion, would be to amend article 42-3 of the law to give the Conseil the power to accept, subject to conditions, "substantial modifications" to the initial data of the authorization. This would make it possible, for example, to approve certain changes of category, whereas the current watertightness between radio categories is a source of great rigidity.

The French Superior Audiovisual Council insists on the need to introduce legislative provisions for terrestrial digital audiovisual. It would be particularly useful to quickly amend article 1 of the law of September 30, 1986, by adding to the list of limits to freedom of communication, the reservation of frequencies for digital use, if the allocation of frequencies hinders digital development projects.

The Conseil particularly deplores the lack of development between the respective domains of the regulator's regulatory and contractual powers. It notes on a daily basis that, once the objectives and general principles have been laid down by law and decree, the proceedings can only be adapted to the developments and specificities of audiovisual companies by means of a conventional procedure.

The Board would also like to thank you for your letter of April 9 concerning the schemes for financing public television. We fully endorse them, as they are in line with the position we adopted last January and published in our February letter. It is to be hoped that these schemes will find their first expression in the 2000 Finance Act (...)".