Opinion of October 7, 2008 on the draft legislation modernising the public audiovisual industry and on new services

The French Superior Audiovisual Council has been asked by the Government to give its opinion on the draft legislation modernising the public audiovisual industry and concerning new audiovisual services. After deliberation, it issues the following opinion.

I - Modernising the public audiovisual industry

1°) On the transformation of France Télévisions into a single company

The Conseil takes note of the transformation of the France Télévisions group into a single national program company, with the identity of the channels to be specified in the terms of reference.

However, it expresses concern about certain consequences that could result from the merger of the current national program companies and the transformation of the France Télévisions group into a single company.

The Council therefore demands that France Télévisions' mission statement and internal organization include specific provisions guaranteeing :
- respect for the identity of each channel and the absence of any standardization of their editorial lines;
- the diversity of those in charge of creative programs, particularly in the field of drama;
- respect for the constitutional requirement of news plurality.

2°) On the appointment of the presidents of France Télévisions, Radio France and the company in charge of France's external broadcasting network.

The Conseil considers that it is not its role to rule on the legislator's choice of method for appointing the presidents of France Télévisions, Radio France and the company in charge of France's external audiovisual services, as the Conseil's assent is equivalent to a power of co-decision.

The Board is committed to ensuring that the personalities proposed by the Government share the vision and values of the public sector, as defined by Parliament, the Government and the Board. They must also present a global professional project for the company concerned, and be able, with the team they will be working with, to manage the company.

The Board will be careful to ensure that the new article 47-5 of the law of September 30, 1986, which allows company chairmen to be removed from office, does not undermine the independence of the persons concerned in the exercise of this office. This measure should therefore be reserved for cases of serious breach of their duties.

3°) On the composition of the board of directors of public companies in the audiovisual industry

The draft legislation makes provision for the Conseil to " ensure the impartiality of the persons it appoints " to the boards of France Télévisions, Radio France and the company in charge of France's external audiovisual services.

The Conseil questions the usefulness of this new provision, which in its current form appears to be a matter of course. If its purpose is to prevent conflicts between the interests of the public company and the possible private interests of directors, a subject on which the Board is already vigilant, this should be clearly stated. The i mprecision of the term " impartiality " would in fact be a source of legal insecurity for future appointments, which would then risk being the subject of abundant litigation, prejudicial to corporate governance.

4°) On the financing of the audiovisuel public service and the abolition of advertising on France Télévisions

The Conseil approves the gradual elimination of advertising on France Télévisions channels, spread over several years. This measure will further accentuate the difference between their programs and those of private broadcasters. It will also help France Télévisions to better fulfill the public service missions entrusted to it by law.

The Conseil is also in favor of the draft legislation's abolition of France Télévisions' access to advertising for programs shown overseas France, reserved for communities where the public service network has a private competitor showing free-to-air terrestrial broadcasts. Here too, the Council recommends a gradual approach, spread over several years, to ensure that a sudden shutdown of RFO's "country TVs", which are showcases for locally-produced goods and services, does not destabilize the local economy.

With this in mind, the Council notes the introduction of the two taxes provided for in the draft legislation, and the indexing of the audiovisuel licence fee to inflation. However, since there can be no link between the proceeds of the taxes and the allocations made to France Télévisions by the State, the latter must provide the company with the financial means to enable it to fully carry out its public service missions, ensure compliance with the obligations arising from the contract of objectives and means, and continue to offer attractive programs in a competitive market.

5°) On the terms of reference and specifications

The Conseil approves the principle of a single set of mission statements for all France Télévisions channels, as recommended in its"Observations and proposals concerning the editorial line of France Télévisions channels", in June 2008.

However, it would like the draft legislation to make provision for the Conseil to specify some of the obligations set out in the terms of reference, particularly in the areas of ethics, plurality of information and diversity of production.

6°) On contracts of objectives and means

In its aforementioned proposals, the Board recommended that it be closely involved in drawing up contracts of objectives and means. It is therefore very much in favor of the scheme in the draft legislation which makes provision for its prior consultation on these documents. This measure will ensure a better link between these contracts and the mission and specifications, which today often include separate commitments relating to programs, with no real coherence between them.

The Board also approves the provision allowing the contract of objectives and means of public-sector companies to coincide in time with the term of office of their chairman.

When drawing up the annual report on compliance with the terms of reference, the Board will be able to assess the performance of the contract of objectives and means.

The contract of objectives and means will determine, for each of the audiovisuel communication services, objectives, in particular qualitative ones, aimed at ensuring that the programs offered satisfy viewers, enable new audiences to be reached and fulfill the public service missions entrusted to France Télévisions. This orientation, which corresponds to the proposals made by the Conseil last June, meets the need to widen the scope of observation by providing an assessment indicator other than audience share alone.

II - Transposition of the Audiovisual Media Services Directive

In its April 15, 2008 contribution to the debate on the transposition of the Audiovisual Media Services Directive (AVMS), the French Superior Audiovisual Council noted that the inclusion of on-demand audiovisual media services (AVMS) within the scope of the French law of September 30, 1986 appeared to be the necessary translation of the European legislator's choice in favor of a single legal framework for television services and AVMS, and that it would bring the obligations applicable to television services closer to those applicable to on-demand audiovisual media services, which offer similar content. This legal unity seemed all the more necessary to the Conseil, given that one of the main categories of on-demand audiovisual media services will be "catch-up TV" services, which are the very extension of television services.

The Conseil therefore summoned the legislature to entrust it with the regulation of ADM services, as the jurisdiction of a single regulatory authority would guarantee consistent application of the principles applicable to both types of service. In the Conseil's view, this was a natural extension of its activity, justified by the similarity of the content on offer.

It is pleased to note that the draft legislation is in line with this approach, entrusting it with the regulation of this new sector by extending its competence to on-demand audiovisual media services.

A - On-demand audiovisual media services (SMAd)

1°) Definition of AVMS

As was the case when the directive was being drafted, the definition of AVMS is one of the major issues in transposing the directive, given their evolving nature and their proximity to information society services.

The definition proposed in the draft legislation largely reproduces that of the directive. It mainly concerns video-on-demand and catch-up TV. The definition of SMAd should make it possible to subject this type of service to the provisions of the law of September 30, 1986, even if it is provided by the same company, where appropriate on the same Internet site, as services not subject to this law, such as user-generated content. Subject to this reservation, the Conseil considers that the definition envisaged corresponds to the current state of development of ADM services and to their highly evolving nature.

2°) On LDCS obligations

a) - On the absence of prior formalities

The Council approves the government's decision not to impose any prior authorization or declaration requirements on LDCS. It considers that, at this stage, the development of new services should be facilitated by refraining from unnecessary and cumbersome formalities.

b) - On child protection obligations

The Conseil approves the extension of the scope of application of the second paragraph of article 15 of the law of September 30, 1986 to all audiovisual communication services. It hopes that this provision will enable it to impose on SMAd the implementation of any scheme adapted to the nature of these services and enabling children to be protected from programs not intended for their age group, including those that are not recommended for children under twelve.

In fact, some of the approaches adopted for television services (timetables, signage enabling parents to be alerted to the degree of harmfulness of programs for youngsters, and consequently to exercise control over the presence of children in front of the family television set) do not appear to be adapted to SMAd, whose programs are, in principle, accessible at all hours and for normally individual consumption. Appropriate, graduated rules should therefore be laid down for these services, in line with those adopted for television services.

The Conseil also approves the provision prohibiting all audiovisuel communication services, including SMAd, from showing programs likely to cause serious harm to persons under 18.

c) - On the reference to decrees for some of the obligations of ADM services

The draft legislation refers to a decree the setting of obligations for SMAd shown by networks not using frequencies summonsed by the French Superior Audiovisual Council. This provision reflects the government's desire to take account of the specific nature of ADMs when setting a system of obligations that will have to be adapted to their particular nature.

The explanatory memorandum gives few details of the obligations to which ADMs may be subject in terms of advertising, teleshopping, sponsorship, respect for the French language, exhibition of works and contribution to their production.

Nevertheless, the Council approves of the choice of a specific framework for ADMs, which allows greater flexibility in the obligations imposed on them. This framework must be appropriate and proportionate to the size and economics of the service.

As stated in its contribution of April 15, 2008, the Conseil recommends that LDCS be subject to minimum obligations and regulation, adopted cautiously and progressively, taking into account their characteristics so as not to threaten the development of innovative services. We must avoid encouraging French operators to relocate their online services to other countries, and curbing innovation and the diffusion of new formats that meet the expectations of viewers and Internet users.

Obligations should therefore only be imposed if they are strictly necessary to maintain fair conditions of competition, particularly with cinema services. Thus, for the Conseil, the main criterion for justifying regulation should be the existence of direct competition with TV services that are currently heavily regulated, first and foremost among which are thematic movie channels.

With regard to the exhibition of works and the contribution to their production, the Conseil recommends basing itself as far as possible on inter-professional agreements that the Conseil could validate or, in the absence of such agreements, on flexible rules that the Conseil could lay down. This would appear to be the most appropriate proceedings in a rapidly evolving field.

Lastly, the law should make provision for derogations in favor of services that clearly display an exclusive editorial choice, or one that is very heavily oriented towards works from certain countries.

d) - Extension of other articles of the law of September 30, 1986 to SMAd

The Conseil strongly hopes that article 17-1 of the 1986 law will be made applicable to SMAd. Difficulties have already arisen with the distribution of certain catch-up TV services, notably public service channels. It is therefore important for the Conseil to be able to settle disputes between SMAd providers and distributors, so that the latter can benefit from the flexible, rapid and efficient dispute settlement proceedings provided for under article 17-1 for radio and television services.

For the same reasons, it seems essential that article 41-4 of the 1986 law should apply to LMDAS, to enable effective collaboration between the Conseil supérieur de l'a udiovisuel and the Conseil de la concurrence in the regulation of this rapidly rising sector.

B - Other amendments to the law of September 30, 1986

1°) The draft legislation makes provision for costs relating to audio description of works (adaptation of the work for the visually impaired) to be taken into account in the contribution to audiovisual production (amendment of articles 27 and 33 of the 1986 law).

In the same spirit, and in order to promote the accessibility of programs to the deaf or hard-of-hearing, the Conseil believes that the draft legislation should also include a scheme enabling part of the costs of making programs accessible to the deaf or hard-of-hearing to be taken into account in this contribution. It would also like to see a provision for the inclusion of adapted subtitling - where this has already been done - when a program is subsequently transferred to another publisher, as is now made for in new agreements with publishers.

2°) The Council approves the new powers conferred on it by the Government's draft legislation with regard to rules governing, on the one hand, access by television services to short extracts of events of great interest to the public and, on the other, product placement.

The Council's determination of fair, reasonable and non-discriminatory conditions enabling television service editors to have access to short extracts from events of great interest to the public, for which another editor holds exclusive broadcasting rights, is a logical extension of the Council's ongoing reflection on the right to sports information, and of the inter-professional agreement it intends to draw up. However, the Council would like the draft legislation to specify that it is responsible for drawing up the list of events of major interest to the public.

III - Other schemes

1°) On the advertising interruption regime for works

The draft legislation makes provision for a second advertising break for audiovisual and cinematographic works.

The Conseil considers that this measure will improve the financial situation of private publishers, which is favorable to the development of audiovisual creation. In addition, for viewers, this second advertising break will be a strong differentiating factor between private TV channels and public channels, the latter not being able to interrupt advertising.

However, the Conseil once again stresses the need to guarantee the level of funding for public companies in the audiovisual industry. It also hopes that the authorities will ensure that all private broadcasters, whatever their broadcasting method, benefit equally from these new advertising resources.

With regard to article 73 of the law of September 30, 1986, the Conseil approves the deletion of the reference to the notion of financing involving remuneration from users, replacing it with a reference to the nature of the service. This will enable private television services to restrict the scope of the ban on the interruption of advertising for a cinematographic work to cinema television services alone, without affecting other subscription-based services distributed by cable, satellite, broadband or personal mobile television (PMT).

2°) On the Council's regional technical committees

The Conseil is in favor of extending the powers of its regional technical committees, which will enable more effective regulation of local audiovisuel services. The decree implementing this scheme should make provision for appeals to the French Superior Audiovisual Council. It might also be useful to trial this new scheme in the radio sector before extending it to local television.

Paris, October 7, 2008
For the French Superior Audiovisual Council,
The Chairman
Michel Boyon

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