Does the Commission’s proposed Online Transmissions and Retransmissions Regulation spell the beginning of the end of territorial licensing?
The Commission published its proposed EU copyright reform package on 14 September 2016, as part of its Digital Single Market strategy (discussed in more detail here). The reform package includes a Regulation laying down rules on the exercise of copyright and related rights applicable to certain online transmissions of broadcasting organisations and re-transmissions of television and radio programmes.
The proposed Regulation has been inspired by the existing Satellite and Cable Directive and, if adopted, would mean broadcasters situated in one Member State could potentially make content available online across the
whole of the EU without having to obtain the rights to such content in other Member States.
The Regulation has two principal components:
- the application of the ‘country of origin’principle to ‘ancillary online services’; and
- the extension of the compulsory collective management regime for retransmissions of broadcasts in other EEA member statesfrom just cable retransmissions to other forms of retransmission services.
The country of origin principle and online services
The Commission’s proposal is that that the ‘country of origin’ principle should apply to online services that are
“ancillary” to a traditional broadcast of radio or telephone programmes. These are defined so as to
include the provision of radio and television programmes online simultaneously with the broadcast (i.e. simulcasting) or for a defined period of time after the broadcast (i.e. catch-up TV) or other material which is ancillary to such broadcasts. It is not intended to include stand-alone online services or VOD services that are not related to a broadcast, but there is currently no attempt to define the period of time during which catch up TV services would be covered by ‘country of origin’ principle.
The Regulation does not force broadcasters to offer online services cross-border (although they may be required to provide such services to subscribers who are temporarily present in another member state under the draft Portability Regulation – discussed here). Recital 11 of the Regulation also asserts that “through the principle of contractual freedom it will be possible to continue limiting the exploitation of the rights affected by the principle of country of origin laid down in the Regulation“.
However, as Recital 11 goes on to make clear, such contractual freedom is subject to the requirement that any limitations on the exploitation of those rights are in compliance with EU law. As the Commission is continuing to investigate whether contractual requirements to geo-block content between broadcasters and film studios are a breach of EU competition rules (read more here), any contractual provisions that restrict online exploitation of rights to certain territories within the EU will need to be considered carefully from a competition law perspective. This could mean that the common practice of licensing content on a territory-by-territory basis would come under increasing threat if this Regulation is adopted.
Comment: This is not an attempt by the Commission to implement its much discussed “accessibility” proposals. There is no obligation on broadcasting organisations to provide their online ancillary services across borders. Instead, this legislation is designed to make it simpler and faster to clear
rights that are needed for simulcasts and catch up services.
The second aspect of the Regulation concerns rights in retransmission. It effectively extends the current compulsory collective management regime that applies to simultaneous retransmissions of broadcasts in other EEA member states by cable to retransmission services offered on satellite, digital terrestrial, closed circuit IP-based, mobile and similar networks. This means operators of these types of retransmission services would only have to reach an agreement with the broadcaster, as the Regulation provides that other holders of copyright and related rights can only exercise their rights through a collective management organisation. The proposed compulsory collective management regime would not extend to retransmission through an internet access service.
Timing and transitional provisions
The current proposals would see the Regulation coming into force six months following its publication in the Official Journal of the EU. However, content that is licensed to broadcasters under agreements that are in force when the Regulation starts to apply will not be subject to the ‘country of origin’ principle for ancillary online services for a further three year period.
These proposals have not yet been finalised, so it remains to be seen whether they will be passed in their current form.
The process for finalising the legislation is as follows:
The Commission submits the proposal to the European Parliament, which must approve it by simple majority. The Council must then approve it by qualified majority. There is no legislative timetable for this. Both the European Parliament and the Council can propose amendments, which may trigger a second round of “reading” and voting. If the European Parliament and Council cannot come to an agreement than a Conciliation Committee is convened where they negotiate the final proposed amendments which are then voted on at a third and final reading.