Opinion on the draft decree on encrypted channels

Avis du French Superior Audiovisual Council du 23 octobre 2001 sur le projet de décret fixant les principes généraux concernant les obligations des éditeurs de services de télévision qui summons à une rémunération de la part des usagers diffusés par voie hertzienne terrestre en mode analogique

Requested to give its opinion, pursuant to article 27 of law no. 86-1067 of September 30, 1986, as amended, on freedom of communication, on a draft decree laying down the general principles governing the obligations of television service editors who rely on remuneration from users of analog terrestrial broadcasting methods, The French Superior Audiovisual Council, after deliberation, makes the following observations, which must be supplemented by the main observations contained in its opinion of October 2, 2001 on the draft decree laying down the general principles concerning the diffusion of services other than radio broadcast by terrestrial hertzian means in digital mode.

1. General comments

The Conseil would have liked to see a simplification of the provisions of the decree, which is intended to set out the "general principles" of the obligations and not to lay them down in detail. The decree should therefore leave more room for interprofessional agreements and conventions between the broadcaster and the film industry's professional organizations, rather than replacing them in setting out detailed obligations.
In addition, as mentioned in its opinion on the draft "digital" decree, the Conseil is in favor of identical regimes for premium digital channels and Canal+. This applies in particular to the scope of cinematic works on which independent production obligations are based (article 12 of the draft decree on encrypted channels).

2. Scope of application

The "encrypted channels" decree of May 9, 1995 currently applies to Canal+ and the Canal+ bleu/jaune/green channels, shown by cable and satellite. The extension of the scope of this decree to Canal+ channels is the result of article 28, 14° of the law of September 30, 1986, introduced by the law of August 1, 2000, which specifies, for the "rerun, in whole or in part, by terrestrial hertzian channel, by cable or by satellite", of a television service shown by terrestrial hertzian means in several programs, that "the obligations mentioned in 3° and 4° of article 27 concern the service as a whole, and the obligations mentioned in 1°, 2° and 5° of article 27 concern each of the programs making it up". It implicitly follows that all the programs referred to in this way are subject to the decrees provided for in article 27 of the law and therefore, in this case, to the decree of May 9, 1995.
As part of the roll-out of digital terrestrial television, and in the event that Canal+'s offshoots are selected as candidates, it would be desirable for them to be subject to the same legislation as the parent channel.
With regard to Canal+ in digital, the second paragraph of article 30-1 of the law of September 30, 1986 specifies that simulcast authorization "is assimilated to the initial authorization, of which it constitutes only an extension". Consequently, article 1 of the draft "digital" decree excludes "simulcast" from its scope. Canal+'s full and simultaneous digital coverage will therefore be subject to the draft "encrypted channels" decree.
On the other hand, neither the draft "digital" decree nor the draft "encrypted channels" decree specifies the scheme to which Canal+'s offshoots might be subject if they were to be shown terrestrially in digital mode.
The French Superior Audiovisual Council therefore considers that it would be desirable for article 1 of the draft "encrypted channels" decree to extend the scope of application of this decree to these variations.

3. Quantum of cinematographic works

The Council notes a lack of precision in article 8 of the draft decree: under the provisions of this article, the ceiling of 500 cinematographic works is made provision for "between midday and midnight" and the agreement may set a maximum for the hours between midnight and midday, "within this limit", without specifying whether the ceiling of 500 films applies only between midday and midnight or over 24 hours. For the sake of clarification, he proposes that it be stated, as in article 18 (II 1°) of the draft "cable and satellite" decree, that the 500-film ceiling applies "to all programming".

4. Prime time

The first paragraph of article 10 of the draft decree sets peak listening hours at 18-24 h. As it stated in its opinion on the draft "digital" decree, the Conseil believes that prime time should be set in the agreement on the basis of the service's programming and audience characteristics, and that the decree should only make provision for a basic regime setting these hours at 6-11 p.m., corresponding to potential peak times.

5. How quotas for cinematographic works are calculated

The second and third paragraphs of article 10 of the draft decree provide, as a counterpart to a commitment to pre-purchase works for which the production cost is less than or equal to a specified amount (diversity clause), the possibility of calculating broadcast quotas for cinematic works in terms of number of titles, rather than in terms of broadcasts and reruns, with broadcasts of original EOF works accounting for no less than 35%.
The Council points out that this counting method does not guarantee effective compliance with Article 4 of the Television without Frontiers Directive, which makes provision for "a majority proportion" of European works, assessed in terms of "diffusion time".
The scheme therefore needed to be supplemented to ensure, on the one hand, that the minimum 50% of European works counted per diffusion was respected and, on the other, that the minimum 35% of works of original French expression was respected not only throughout the programming schedule, but also during prime time.

6. Basis of production obligations

The basis of production obligations is defined in article 11 in a specific way, due to the need, for encrypted services, to make provision for taking into account subscription revenues.
In the interests of clarification, the Council considers that it would be useful for the bases of production obligations for the various services to be defined in a single article, and to be harmonized, particularly with regard to deductions.

7. Independent cinematic production

The Council, which will be responsible for classifying independent works under article 13 of the draft decree, is concerned about the interpretation to be given to the second paragraph of I of article 12.

8. Audiovisual production

With regard to the audiovisual production obligation set out in article 17, the Conseil notes that the expenditure to be taken into account to meet this obligation is no longer limited solely to orders, i.e. new production, but has been extended to include the purchase of rights and the financing of writing and development work. This has the effect of making Canal+'s audiovisual production obligations more flexible, without raising the rate as the decree of July 9, 2001 imposed on analog channels.
In addition, the Conseil would like to see a clear statement of the expenses that can be taken into account for audiovisual production obligations, including the possibility for the channel to invest in pre-purchasing, as is made provision for in the decree of July 9, 2001.
Lastly, the Council questions the appropriateness of the derogation provided for in article 18 of the draft decree, which allows non-animated works to be considered as independent if they are shown a total of six times within a 42-month period, whereas article 11 of the decree of July 9, 2001 makes provision for a maximum of three diffusions for non-animated works and four for animated works.

9. Modification of agreements

Article 21 makes provision for the draft decree to come into effect from January 1, 2002, and stipulates that agreements must be revised before this date, as necessary.
If the decree is published on or around December 15, 2002, as is currently made provision for, the agreements cannot be amended before January 1, 2002.
The Council therefore considers that it should be possible to amend agreements within three months of publication of the decree.