Converging at light speed


The speed with which the EU is moving on issues relating to technological convergence is hardly surprising. Some of Europe's most powerful media companies are constantly pushing out the regulatory boundaries, seeking new alliances, alignments and ways to increase market share and create monopolies. Only last week the Commission had to stop two of Germany's biggest media giants, Kirch and Bertelsmann, from promoting their digital pay TV services and marketing their joint set-top decoder. The Commission is using competition rules to investigate whether Kirch and Bertelsmann's pooled digital TV project, Premiere - one company supplies content and the other the technology - complies with competition laws, and more importantly, whether it gives the impression that the decoder is already the definite digital standard for Germany.

The biggest giant of them all, Microsoft is currently the subject of six EU inquiries.

The EU Commission has just published a major Green Paper on Convergence of the Telecommunications Media and Information Technology Sectors and the Implications for Regulation Towards and Information Society Approach.

The long-winded title is not necessarily an indication that it will remain on a shelf in Brussels. A consultation process will take place until April. A report will be published next June. By summer the Council of Ministers and the European Parliament should have adopted resolutions and the Commission will respond with a convergence action plan by the end of next year.

The digital revolution is already upon us, with hundreds of new television services planned. Tradition boundaries within the communications and media industries - between broadcasting, voice telephony and online computer services - are already beginning to break down. The challenge facing governments is that each sector operates on a different "platform" (TV sets, telephones and computers); and up to now each has been regulated by different laws and different regulators, mainly at national level.

Nowadays digital technology allows a substantially higher capacity of traditional and new services to be transported over the same networks and to use integrated devices for computing, television and telephones. Already telecommunications, media and information technology companies are offering services outside their traditional business sectors, often, on an international or global scale.

The Green Paper points to what has already taken place:

Internet services delivered to TV sets via systems such as Web TV;

email and the Web available through digital TV decoders and mobile phones;

webcasting of radio and TV programmes and using the Internet for voice telephony.

But the 57-page document represents two distinct cultures, cultures that might be personified in the two Commissions whose names are attached. The free market approach of telecomms Commissioner Martin Bangemann contrasts with that of the Commissioner responsible for broadcasting, Marcelino Oreja, who reportedly softened the pure market-driven ideas by pushing some cultural and democratic balance.

However, even with Mr Oreja the Green Paper still suggests some frightening scenarios for public service broadcasters such as RTE. It forecasts that their market share is likely to diminish as users face a growing choice, in a market already near saturation in terms of the potential for individual consumption of audio-visual services. It says escalating prices for content could subject them to budgetary pressures that might outstrip the capabilities of existing funding arrangements.

Public service broadcasters should be allowed to enter the marketplace, it says, to take advantage of the new opportunities offered by convergence and find new sources of revenue. However, it warns: "If State funds intended to support a public broadcaster in fulfilling its public service mission were used to cross-subsidise these new activities or the use of new technological platforms such as the Internet, then such practices would be subject to the treaty rules on competition and on the freedom to provide services."

The paper suggests that others might be allowed to compete for the public service role, and says EU member States must agree a date for switching off analogue TV signals, so forcing all citizens to invest in digital TVs.

Its main concern is with creating the regulations necessary to development technologies. It puts forward two views: that current outdated regulatory structures are holding back development of the information society; and that the media industry "as the bearer of social, cultural and ethical values within our society is independent of technology" and should be regulated separately.

The paper identifies several major barriers to the information society's development:

the cost of telephone calls across the EU;

the slow pace of the liberalisation of the telephone network;

weak laws protecting intellectual property; and

a shortage of sufficiently high quality programmes to fill the expanding market.

Some delays

Despite the authors' optimism that the subject could be incorporated in an action plan by the end of 1998, there will be delays. The Television Without Frontiers directive took two years to find agreement. Some of the provisions will be hotly debated within the European Parliament.

National governments will be slow to adopt some of the provisions discussed in the paper. Some have been able to find the will to change chronically outdated existing regulations. But the speed at which the EU at least wants to travel should frighten the Irish Government. Broadcasting legislation here is hopelessly out of date. No decision has been taken as to how the transfer to digital will be undertaken. The RTE Authority has given proposals to the Government and is still waiting for a reply. RTE's proposal is for a terrestrial digital system that would carry about 30 channels operated by a company consisting of RTE, plus strategic partners from the private and public sectors. It has suggested to the Government a timetable that would include a policy by early in 1998, followed by legislation by the end of next year, with the first digital channels on air by the autumn of 1999.

Michael Foley is at:

The Green Paper is at: