Ofcom warns of 'risks' of EC's AVMS directive

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Ofcom has warned of "important economic risks" to nascent digital media such as internet protocol television (IPTV) that are "inherent" in the European Commission's proposed Audiovisual Media Services (AVMS) Directive.

The UK media regulator has also said that AVMS, which would replace and broaden the scope of the Television Without Frontiers Directive for establishing minimum content rules in areas such as advertising and the protection of children, poses "a significant problem of regulatory risk" for audiovisual media, as well as threatening "innovation" and "European competitiveness".

The EC is proposing to extend the scope of regulation from TV to all audiovisual media services, which have been defined as those the principal purpose of which is the provision of moving images—with or without sound—to the general public, in order to inform, educate or entertain.

The exact formats that will be affected by the suggested new rules have not yet been made explicit. However, Ofcom said that "a number of strategically significant new media sectors could potentially fall within the scope of the new directive, including mobile multimedia, online gaming and IPTV".

Ofcom's warning over AVMS follows the publication of an independent study—commissioned by the UK body—by thinktank RAND Europe into the possible impact of the mooted European directive.

The paper concludes that pressures put upon providers of burgeoning audiovisual formats could increase the chances of media firms relocating outside the European Union, meaning that "no economic benefit would accrue to Europe".

The RAND study notes that "it will be important to avoid the situation in which the costs of compliance with the AVMS Directive become a critical factor in determining the prevalence" of media migration out of the EU.

Ofcom added: "The worst case scenario for Europe is that economic activity, providing jobs and stimulating growth here, will take place elsewhere, be it in the US or in the Far East".

Ofcom has declared its support for RAND's recommendation of 'light touch' regulation, "wherever possible delivered through industry self-regulation", which the thinktank claims is "important in both reducing the size of regulatory costs and reducing regulatory risk and uncertainty".

As a result of the RAND study, Ofcom has offered a number of conclusions:

  • The EC should make further efforts to clarify the scope of the services covered by AVMS.
  • There must be clear guidance to the EC and national authorities to ensure that the implementation of AVMS is conducted in a proportionate, transparent, evidence-based and 'light touch' way.
  • There ought to be emphasis on the fact that, when conducting a review of the proposed directive, and in accordance with Better Regulation principles, the EC examines whether or not there is a continued need for regulatory measures.

Lovelace Consulting  |  21.09.2006

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