In this article we discuss Part 2 of the Media Bill (“Prominence on Television Selection Services”) and how it compares to Part 2 of the draft Media Bill published earlier this year.
Background
When the draft Media Bill was first published, we summarised the changes that were proposed in respect of the revised prominence framework for public service broadcasters (“PSB”) and the impact such changes might have on “designated internet programme services” (“DIPS”) (e.g., BBC iPlayer) made available on “regulated television selection services” (“RTSS”) (e.g., large pay-TV platforms and smart TVs). We also discussed the recommendations made by the DCMS Select Committee in their final report on the draft Bill.
Now that the Media Bill has been updated and published, we discuss below what has changed from the first draft Bill, whether the Select Committee’s recommendations were accepted by the Government, and how this might impact stakeholders.
Select Committee recommendations
By way of brief reminder, the key recommendations of the Select Committee regarding Part 2 of the draft Media Bill were that:
- RTSSs should be obliged to give “significant” prominence to PSBs, rather than an “appropriate” degree of prominence;
- Ofcom should be allowed to de-designate legacy devices so that they can be exempt from the Media Bill’s prominence obligations; and
- the Government should examine the principles on which existing successful carriage deals have been negotiated to improve the drafting of the must-offer / must-carry agreement objectives for DIPSs on RTSSs.
The degree to which the Government adopted the Select Committee’s recommendations in respect of Part 2 is a bit of a mixed bag. Perhaps most significantly, the Government has rejected the Select Committee’s “significant” prominence standard, choosing instead to retain the lower “appropriate” prominence standard. This was justified in some detail in the Government’s response to the Select Committee, which called out that “requiring “significant” prominence (even when such prominence may be inappropriate) raises clear operability concerns. It would be at odds with the existing linear prominence regime (which refers to “appropriate” prominence) and too inflexible, for example, to account for regional variation, which … is crucial for STV and S4C. Ofcom, who will be enforcing the new prominence framework, told the Committee that “appropriate” works.” The Government also highlighted that not even all of the PSBs supported the proposal.
However, in respect of the de-designation of legacy devices, it appears that the Government did take the Select Committee’s recommendations on board, as this draft of the Media Bill clarifies that Ofcom may consider whether an RTSS is “capable of functioning” as an RTSS as well as the modifications, if any, that are needed to render it capable of doing so, such that legacy RTSSs that don’t make the cut can be de-designated by Ofcom.
Finally, the Government has also sought to clarify the scope of the draft Bill’s “agreement objectives”, which are objectives that DIPSs / RTSSs must take into account when negotiating with one another to fulfill their respective must offer / must carry obligations. One such objective under the previous draft Bill was that these arrangements must be “consistent with [platforms] being able to meet costs reasonably incurred in fulfilling the public service remit” for the licensed public service channel in question. From the wording of this objective, it was unclear whether RTSSs might, for example, be expected to subsidise PSBs or whether RTSSs would be prevented from imposing charges on DIPSs that might erode the latter’s programming budgets.
In this latest draft of the Media Bill, the Government appears to have scrapped the reference to cost, and has replaced it with a more general statement that these arrangements must not “adversely affect the ability of the provider of [a] channel to fulfil the public service remit for that channel […]” . Interestingly, however, the Explanatory Notes to the draft Media Bill do provide that the must offer / must carry obligation is “underpinned by a mutual recognition that the respective value of carriage fees and payments for content should level each other out (referred to as a zero net fee arrangement).” So whilst there may be costs associated with these arrangements, it appears that the Government’s expectation is that content-related costs will be offset by carriage costs (and vice versa) resulting in no fees actually being payable.
The CMS view
The Government’s rejection of the “significant” prominence standard for DIPS will doubtless be a disappointment for (some) PSBs - and a relief for RTSSs. However, what exactly constitutes an “appropriate” degree of prominence still remains to be decided by Ofcom. What may or may not be “appropriate” in a given circumstance could end up being quite “significant” from the perspective of the DIPS, the RTSSs, or both.
The fact that it is up to Ofcom to decide what constitutes an “appropriate” degree of prominence is one of the key themes of Part 2 of the draft Bill. Given the amount of detail (including the designation of DIPSs and RTSSs themselves) that must be filled in by the Secretary of State and/or Ofcom, it will be difficult to gauge the full impact of this Part of the draft Bill for some time.
We will be watching this Media Bill closely as it passes through Parliament, so keep an eye out for our updates on our dedicated CMS Media Bill webpage. If you would like to discuss any aspect of the draft Media Bill or how it may affect you, please get in touch.
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