Regulatory impact of Brexit on linear TV and video on demand services
Ofcom has helpfully prepared a set of frequently asked questions ('FAQs') to provide information to linear TV broadcasters and VOD service providers on the impact of Brexit on their licensing obligations following the Transition End Date.
The FAQs emphasise that until the end of the transition period, the regulatory framework as set out under the Audiovisual Media Services Directive (Directive (EU) 2018/1808) ('AVMS Directive') will continue to apply, including the country-of-origin principle whereby such service providers are subject to regulation only in the Member State in which they are established or, if not established in a Member State, use a satellite uplink in or satellite capacity pertaining to a Member State.
Following the Transition End Date, the AVMS Directive and the accompanying regulatory framework will cease to apply to the UK. It is not possible to preserve their effect by means of a trade agreement. It follows that linear TV and VOD service providers established in the UK who wish to provide their services to audiences in Member States will no longer benefit from the country-of-origin principle. They will therefore need to take steps to bring themselves under the jurisdiction of a Member State in order to avoid facing barriers to reception and retransmission for failing to comply with any other Member State’s regulatory requirements. We are aware that this has already led several UK broadcasters to make arrangements to become regulated in one or other Member States. They have not thought it sufficient to rely on the country-of-origin principle established by the Council of Europe’s Convention on Transfrontier Television ("ECTT"), not least because countries such as Ireland, the Netherlands, Belgium, Sweden and Denmark have not ratified it, nor does it extend to broadcasters’ video on demand services.
As to the reverse situation, that is, of broadcasters established in EU Member States who wish to have their services carried on UK platforms to UK audiences, the position is as follows:
- Linear TV service providers. For entities that provide linear TV services in the UK, the UK Government has amended the applicable UK licensing regimes to address the loss of the country-of-origin principle following the Transition End Date. For services that appear on regulated UK Electronic Programme Guides, any such service requires a UK licence and will be subject to UK regulations. Excluded from this are TV services made available from countries that are parties to the ECTT, and certain specified Irish services: those services will be subject to the country-of-origin principle and the regulations of their ‘home’ jurisdiction.
- Video on demand service providers. The ECTT only applies to linear TV services, so its country-of-origin principle does not apply to video on demand service providers. Following the Transition End Date, such services will be subject to Ofcom regulation where both the head office is in the UK and editorial decisions are made in the UK. Any such services outside of UK jurisdiction but who provide their services to people in the UK will still be available. If Ofcom considers that they are flouting regulatory rules, Ofcom will liaise with their foreign regulator.
Content Quotas
The AVMS Directive requires Member States to ensure video on demand service providers promote the production of and access to European Works through financial contributions, rights acquisitions and the prominence of European works in the available catalogue. Broadcasters are required to reserve for European works a majority proportion of their transmission time. Within this allocation, broadcasters are required to reserve at least 10% of their transmission time and programming budget for European works for independent producers.
The AVMS Directive defines 'European Works' as: '(i) works originating in Member States; (ii) works originating in European third States party to the European Convention on Transfrontier Television of the Council of Europe and fulfilling the conditions of paragraph 3; and (iii) works co-produced within the framework of agreements related to the audiovisual sector concluded between the Union and third countries and fulfilling the conditions defined in each of those agreements'. Paragraph 3 provides that the works are to be made mainly with authors and workers from that state, and that one of three conditions relating to the producers, production or financing of the works is to be fulfilled.
Since the UK is a party to the ECTT, this provides comfort to UK producers that their programmes will not become less attractive, after Brexit, to European broadcasters and VOD service providers seeking to meet these quota requirements. We have noted a concern, though, that the definition in the AVMS Directive may be amended to exclude works that qualify only by virtue of originating in a state such as the UK which is a signatory of the ECTT.
The quota provisions of the AVMS Directive have been updated through Directive 2018/1808 ('Updated AVMS Directive'). The Updated AVMS Directive amends the AVMS Directive to provide that video on demand service providers are required to ensure that 30% of their catalogue consists of European Works, and to ensure the prominence of such works. The UK has a deadline to transpose the Updated AVMS Directive into UK law by 19 September 2020. To date, no such transposition measures have been taken, but in its FAQs Ofcom has indicated that it will consult on the impact of the amendments to the AVMS Directive for linear and video on demand service providers.
Copyright implications
Background
Copyright exists on a national level, but it is broadly harmonised worldwide through various international treaties, and more specifically across the EU by various directives and regulations. Because of the overarching international harmonisation, certain key principles will continue to apply following the Transition End Date. The UK's withdrawal from the EU necessitates many changes of detail to UK copyright law. In anticipation of that, the UK has already taken steps to address the issues that will arise following the Transition End Date through The Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019. Broadly, these Regulations end some of the reciprocal arrangements between the UK and Member States, and amend definitions and references in UK legislation as appropriate. The Regulations will come into force on ‘exit day’, which in this context means 11pm on 31 December 2020.
Key impacts of Brexit
While there are many implications for UK copyright law as a result of Brexit, some are more relevant to linear TV and VOD service providers than others. We have provided a high-level summary of the impact of these key changes in the table below, followed by a more detailed analysis.
Impacts of Brexit on key copyright law issues for linear TV and video on demand service providers
- Satellite broadcasting copyright clearances. The Satellite and Cable Directive (Council Directive 93/83/EEC) ('SatCab Directive') sets out a country-of-origin principle for copyright licensing for broadcasters making their services available through satellite broadcast to other European Economic Area ('EEA') states. It provides that the act of communication to the public by satellite transmission occurs solely in the EEA state where "the programme-carrying signals are introduced into an uninterrupted chain of communication leading to the satellite and down towards earth" (Article 1(2)(b)). This means that broadcasters do not need to obtain licences from copyright owners in all EEA states where the signal is receivable, a licence from the rights holder for the country-of-origin will suffice.
Following the Transition End Date, the UK will no longer benefit from the country-of-origin principle enshrined in the SatCab Directive. This opens up the possibility that UK based broadcasters may need licences in each EEA state where their signal is received; whether such a licence will be required will depend on the laws of the applicable EEA state. Perhaps to set an example for EEA states to follow, the UK Regulations provide that the country-of-origin principle will still apply to works broadcast by satellite into the UK, subject to the following exception: UK specific permission from the rights holder will be required where: (i) the commissioning or uplink to a satellite of the broadcast is done in the UK; and (ii) the originating country offers lesser copyright protection than the UK.
- Portability. The regulation on cross-border portability of online content services in the internal market (Regulation (EU) 2017/1128)) ('Portability Regulation') provides that EEA subscribers to an online content service must be enabled to access that service while temporarily in other EEA states as if they were in their home state. Their access is deemed, for copyright purposes, to take place solely in their home state. Following the Transition End Date, the Portability Regulation will no longer apply to subscribers travelling between the UK and the EEA.
What this means is that such service providers will no longer be required by law to provide this kind of content portability. In practice, they may continue to make content available in such a matter, but this will ultimately depend on their licensing arrangements with content providers.
- Cable retransmission. The SatCab Directive provides that where a copyright work is included in a cable retransmission of a broadcast from another EEA state, the rights holder may only exercise its rights through a collective management organisation ('CMO') (Article 9). Following the Transition End Date, this rule may no longer apply in EEA states to UK originated broadcasts. As a result, rights holders whose works are made available in such a way may choose to license such retransmissions directly themselves.
Other copyright implications
We have set out below a brief overview of the other more relevant impacts of Brexit on copyright law for completeness.
Sui generis database rights – The database rights as defined by the Database Directive (Directive 96/9/EC) will not apply to UK databases created after the Transition End Date. Copyright in databases (which is separate and distinct from the sui generis database rights) will remain unchanged.
Collective rights management – The operation of European CMOs is governed by the Collective Rights Management Directive (Directive 2014/26/EU). If an EEA CMO offers multi-territorial licences for musical works, the Directive imposes an obligation on such CMOs, if asked, to include in these licences the catalogues of other EEA CMOs that do not license on a multi-territorial basis. Following the Transition End Date, this obligation on EEA CMOs will no longer extend to the catalogues of UK CMOs as the UK will no longer be an EEA state. Nonetheless, the practice may still continue on a contractual basis for practical purposes as the relevant CMOs may find this beneficial in their licensing negotiations. The key difference is that it will no longer be a requirement. However, UK CMOs offering such licences will still be bound to include the catalogues of other CMOs in their multi-territorial licences if requested.
EU satellite decoder cards – After the Transition End Date, it will be an offence to use such devices targeted at EU audiences to access programmes in UK broadcasts where the purpose is to avoid being charged for such access. This is because cards placed on the market in an EEA member state will not be protected against barriers to importation into the UK.
New EU copyright directives
Many significant changes are being introduced into EU copyright law by the new copyright directive (Directive (EU) 2019/790) ('New Copyright Directive'), including increased platform liability through Article 17 and fair remuneration for authors and performers in Articles 18-23, among others. On 21 January 2020, the Secretary of State for Business, Energy and Industrial Strategy said the UK Government would not be implementing the New Copyright Directive in UK law. That said, it is important to note that these new rules will impact UK service providers providing their services in EU countries. Additionally, the transposition deadline for the New Copyright Directive is 7 June 2021, so if the transition period is extended and the Transition End Date pushed back, the UK may be required to implement the New Copyright Directive.
A second copyright directive (Directive (EU) 2019/789) ('Second Copyright Directive') has also been adopted by the EU and serves to extend certain principles of the SatCab Directive. Under the SatCab Directive, the country-of-origin principle regarding determination of where the actual copyright protected act takes place (as set out above) does not apply to online transmissions. The Second Copyright Directive applies the principle to online radio services and to certain online TV services, namely TV news and current affairs programmes and TV productions (other than sports events) fully financed by the broadcaster. The cable retransmission rule in the SatCab Directive (also set out above) is also extended to cover retransmissions made over the internet, along with provisions addressing who is responsible for copyright clearances in instances of 'direct injection' (i.e. situations where a signal distribution platform operator gets a signal from a closed telecoms line instead of from over the air terrestrial or satellite signals available to the public). The deadline for transposition of the Second Copyright Directive is also 7 June 2021, and to date no UK measures have been taken to implement it. The Government has not stated whether it intends to implement its provisions. As the deadline falls after the Transition End Date, there is no obligation to implement the Second Copyright Directive, but this may change if the transition period is extended.
Client Briefing 2020-379
