Law enforcement & execution

Any defined DTTB/MTV policy embedded in the relevant regulatory framework (see previous section 2.11) should have a form of law enforcement to have the set policy executed. For the introduction of DTTB/MTV services, and similarly for any service requiring spectrum, law enforcement focuses on the following policy aspects:

1. Defining the National Spectrum Plan (see section 2.4);

2. Assigning spectrum and broadcast licenses(see sections 2.2, 2.5, 2.6 and 2.8);

3. Assigning local/building permits (see sections 2.2 and 2.7).

For maintaining the proper execution of the National Spectrum Plan and the assigned spectrum/

broadcast licenses, often specific law enforcement entities exist. Varying from country to country, these entities are to include entities like the ‘Radio Agency’, the ‘Communications/Broadcast Commission’, the ‘Electronic Media Regulatory Authority’ or the ‘independent Competition Authority for the communications industries’.

For maintaining the proper execution of assigned local/building permits, usually a non-DTTB/MTV specific regulatory framework exists. In this section we will not address this type of law enforcement because this falls outside the scope of these guidelines. However, as discussed in section 2.7 it is important though that local councils/administrations are well informed about the specifics of DTTB/MTV broadcasting and are aligned with national spectrum policies (see section 2.7.3).

In this section the law enforcement organizational structure for the above first two policy aspects are discussed. This section is structured as follows:

1. Centralized and segmented models;

2. Impact of convergence;

3. Implementation guidelines.

2.12.1 Centralized and segmented models

Regulators enforce DTTB/MTV policies by carrying out certain market interventions (like spectrum and broadcast licensing). In general Regulators will intervene only where there is evidence that regulation is necessary, but then will do so firmly, effectively and decisively. However, using the least intrusive regulatory methods possible to achieve the public policy ends of which the Regulators are the guardians. When regulation is necessary, Regulators tend to promote and to facilitate effective co-regulation and self-regulation, placing greater reliance upon licensees and the industries to police their own affairs.

As said before, the organizational structure in which law enforcement is embedded, varies from country to country. Basically two basic models can be distinguished; a segmented model in which the various regulatory duties are split between Ministries and different specialized entities (very often organized per industry) or a centralized model in which all regulatory duties for one or more industries (e.g. the communications industries, including broadcasting and telecommunications) are centralized in one single entity. Good examples of the latter model are the Federal Communications Commission (FCC) in the US and Ofcom in the UK¹⁶⁸.

168 For example Ofcom was formed by bringing together five existing Regulators – Oftel (telecoms),

Radiocommunications Agency (spectrum), ITC (television), the Radio Authority (radio) and the Broadcasting Standards Commission (standards, fairness & privacy in relation to all broadcasters including the BBC).

The figure below illustrates the two different models and has included the key regulatory activities directly related to DTTB/MTV (and as addressed in the previous sections 2.1-2.10).

Figure 2.12.1 Segmented and centralized regulatory models

Both models can have their own country specific implementations. For example in the segmented model it is possible that for example the Radio Agency does not directly report to any ministry but is directly governed by Parliament. Also, a centralized model can still operate in a non-coordinated way where different departments are working in their separate compartments. Both models do exist and little can be said about their relative effectiveness and efficiency. However, some countries are moving towards a more centralized or coordinated model.

Before assigning any DTTB/MTV license one should check whether the above key tasks and duties are clearly assigned and coordinated between the existing regulatory entities. The trend towards a more centralized model is not directly related to the introduction of DTTB/MTV. However, the introduction of MTV is very often quoted as the example of the wider industry trend of convergence as it brings together the telecommunications and broadcasting industry¹⁶⁹. In other words, the introduction of DTTB/MTV may prompt a review of the organizational structure of the regulatory entities.

It is the wider industry trend of the converging industries of broadcast and telecommunications that makes a more coordinated model necessary. As indicated in previous sections (see 2.2.2 and 2.11.2) asymmetry in legislation between the industries can occur and should be avoided. For example, asymmetry can occur when setting ‘must carry’, cross- and foreign ownership rules or selecting assignment procedures (auction or public tender). In a segmented model with entities organized by industry and without close coordination between them, such asymmetry is more likely to happen.

169 Not only because of device convergence, integrating two receivers onto one device, but also that shared business models between broadcasters and telecom operators are necessary. For more details on business models see section 3.4 of these guidelines.

Independent

2.12.2 Impact of convergence

Apart from any efficiency considerations, regulatory convergence (i.e. towards a more centralized or coordinated model) is mainly driven by the widely observed market convergence trend. As illustrated in the figure below, this market or industry convergence trend will result in a restructured value chain (see also part I and section 2.2.1 of these guidelines).

Figure 2.12.2 Industry convergence

Convergence takes place at basically three different levels, all having their specific impact on the regulatory framework:

1. Network convergence;

2. Device convergence;

3. Industry/corporate convergence.

Network convergence

By the definition of network convergence, convergence will have taken place when all the different electronic communications networks (broadcasting, cable, satellite, telephony fixed and mobile) are each capable of providing all the different services (radio, television, voice, data) and with reasonable

shares of consumer usage by each network¹⁷⁰. From a consumer perspective, the various networks are interchangeable and service roaming could be seamless.

An important development in this network convergence trend is the adoption of the Internet Protocol (IP) for transporting any data, regardless whether this data represents information, voice, video or audio. Many telecom and broadcast companies follow a so-called “all IP” strategy facilitating efficient network operations, data exchange and seamless service roaming between networks.

Telecom networks are now able to deliver typical television services (e.g. by means of IPTV networks) and, conversely, broadcast networks are delivering typical telecom services like telephony and internet. More specifically, DTTB/MTV networks have become interactive by delivering, for example, services such as video-on-demand, gambling, shopping and voting.

With this network convergence an increased need for coordination arises between the telecommunications and broadcast regulations, especially for:

1. Setting content requirements (see section 2.8). Traditionally the telecom Regulator concentrates on regulating carriage but not content whereas the broadcast Regulator very often has statutory content regulation powers;

2. Setting platform access requirements (see section 2.1.1, 2.2.2 and 2.6.1). Also here the telecom Regulator has to liaise with the Broadcast Regulator as in the telecommunications industry platform access is not regulated in the same way. In the telecommunication industry a regulated ‘wholesale’ model is common, whereas in the broadcast industry access was regulated mainly at the level of site/antenna sharing.

However, as previously discussed in these guidelines the introduction of DTTB/MTV may argue for the application of an wholesale model (see section 2.1.1).

Device convergence

Device convergence, however, is happening and at seemingly a faster rate than network convergence.

The mobile handset in the 3/4G world receives voice, data, still and (real-time) moving pictures – one-to-one and one-to-many communication. The PC screen routinely accesses movies, music, radio and television stations. The MP4 players or Personal Media Players (PMP) have become a combined Internet access device, DVD player and television set.

Although device convergence may not lead to one single device accessing any platform or service, a small number of devices, the PC, the PDA, the TV set, the games machine, the mobile phone will be accessing, seamlessly, a much broader range of what were once separate, device-dependent services.

In a segmented regulatory model, this development will pose the question of why, for example, the (broadcast) Regulator can regulate the content of one service (e.g. television programming displayed on a television set) but not of the other (e.g. the moving picture sequence downloaded from the Internet but also displayed on the same television set). From a consumer point of view, both services look pretty much the same on their television set.

170 The ultimate form of network convergence would be one single unified network. However due to the specific characteristics of specific networks this is not even desirable. For example, broadcasting networks are very cost efficient in delivering large amounts of data to many. In fact the incremental costs are zero.

The costs to transmit to one television set within the transmitter coverage area are exactly the same as to transmit to ten million television sets. This is in sharp contrast with, for example, an IPTV network delivering television services.

With this device convergence an increased need for coordination arises between the telecommunications and broadcast regulations, especially for:

1. Setting technology & standardization requirements (see section 2.1). As discussed access to a telecom service is differently organized than in the broadcasting industry. For example in the broadcasting industry it is common practice to lay down conditional access requirements (having a Common Interface) for the Integrated Digital Television sets (IDTV), this is unknown in the telecoms industry. With the ever increasing number of different devices, a device specific regulation may well not be sustainable in the long run;

2. Setting limits for subsidizing and bundling services. In the telecoms industry some Regulators restrict the possibilities of handset subsidizing whereas in the broadcast industry subsidizing receiver equipment is very often an accepted practice. Also dissimilarities may exit between the broadcast and telecom industry in the area of bundling services (e.g. only offering a single television, internet and telephony package may be prohibited in the telecoms industry)

Corporate convergence

Corporate convergence might have been at it’s height during the dotcom boom but corporate convergence is still taking place. Perhaps not at the same scale as the examples of Telefonica, the Spanish telecoms company, buying Endemol, the TV production company or Time Warner and AOL merging or Vivendi in France adding Hollywood movie studios to its telecoms business.

Nevertheless, telecoms companies today, fixed and mobile, have started to offer television services and have built up know-how of the content business, whether or not they choose to acquire content properties. Conversely, content or broadcast companies have started to deliver telephony & Internet services and their programming over a widening range of networks and to different audiences.

With this corporate convergence, especially, arises the regulatory issue of defining the legal entities/players like telecommunications, broadcast network operator and mobile network operator.

For the different legal entities, different regulatory regimes might be applicable. For example, mobile operators might have obligations to share transmitter sites whereas broadcast network operators might not have. Review and revision of defined entities might be necessary. Again this will require coordination between the relevant regulatory entities.

2.12.3 Implementation guidelines The following guidance can be provided:

1. Before assigning any DTTB/MTV licenses, the involved Ministries and Regulators should check if the following tasks are clearly defined and no jurisdiction problems could occur:

a. Policy formulation, including aspects such as defining the National Spectrum Plan, setting standards, setting license terms & conditions etc;

b. Assigning spectrum licenses and monitoring proper use of the assigned spectrum;

c. Assigning broadcast licenses or permission to broadcast television and radio content;

d. Monitoring broadcast and advertising compliancy (e.g. by applying codes of conduct for editorial content, EPG, access services and advertising);

2. Continuously align and coordinate the DTTB/MTV efforts between the involved regulatory entities, which seems especially relevant for licensing MTV services and for the areas as indicated in section 2.12.2 (including setting requirements for content, platform access, technology & standardization, subsidizing and bundling services);

3. Although not strictly related to the introduction of DTTB/MTV services, the Government might consider a (phased) restructuring of the regulatory entities towards a more

converged or centralized model. However, this should never hamper the realization of any set targets for the Analogue Switch-Off - ASO - (e.g. as communicated to the public by official publication)¹⁷¹ or the planned assignments of DTTB/MTV licenses (e.g. as indicated in the National Spectrum Plan).