Satellite Television Service Regulations 1997 (Hansard, 8 July 1997)

§ Lord McIntosh of Haringey
rose to move, That the draft regulations laid before the House on 18th June be approved [4th Report from the Joint Committee].
The noble Lord said: My Lords, these regulations have been laid before your Lordships' House under Section 2(2) of the European Communities Act 1972. The purpose of the regulations is to implement a judgment of the European Court of Justice concerning 560 the UK's implementation of Articles 2(1), 2(2) and 3(2) of the 1989 EC Broadcasting Directive, perhaps better known as the television without frontiers directive.
The court found that the United Kingdom had failed to fulfil its obligations under the directive, first, by misinterpreting the basis on which satellite broadcasters fell within UK jurisdiction; secondly, by applying different licensing regimes to domestic and non-domestic satellite services; and, finally, by exercising control over broadcasts transmitted by broadcasters falling within the jurisdiction of other member states of the European Community.
The Broadcasting Directive is a single market instrument which governs transfrontier television broadcasting within the European Community. For it to work effectively it is essential that certain elements are implemented in a common manner by all member states. One such element is the determination of which country should have jurisdiction over a broadcaster.
In the United Kingdom the Independent Television Commission licences and regulates all broadcasters which come under UK jurisdiction, with the exception of the BBC and S4C. From the European Community perspective, the crucial factor is that each broadcaster should come under the jurisdiction of one—and only one—member state. In order to achieve that, it is clearly essential that a single system of determining jurisdiction is in operation throughout the Community. This is where a problem arose. The wording of the 1989 directive was ambiguous. When member states came to implement the directive at national level, differing interpretations of the provisions on jurisdiction were exposed.
In implementing the directive, the UK chose to use satellite uplink as the basis of jurisdiction. That was the criterion used in the Council of Europe's Convention on Transfrontier Television, which predated the directive and was to some extent a model for European broadcasting regulation. However, other member states used the broadcaster's place of establishment.
Establishment and uplink are fairly complex issues, but, in simple terms, a broadcaster's place of establishment is generally held to be the place in which it has its head office and where decisions about programming content are made. Uplink is the technical process whereby programmes are broadcast from a specific transmitter on the earth to a satellite, from where they are subsequently downlinked back to satellite receptors on earth.
The situation did not cause too many practical problems for the UK because the vast majority of services uplinked from the UK are by broadcasters also established in the UK. In 1992, however, the European Commission initiated legal action against the UK on the grounds that, by using uplink as the basis of jurisdiction, the UK had misinterpreted the Broadcasting Directive. That process culminated in the European Court of Justice's judgment last September which recognised that the existing directive was ambiguous but found that establishment was the correct basis for determining jurisdiction. We need now to implement that judgment and these regulations do so by changing the basis of jurisdiction from uplink to establishment.
561 We now also have the benefit of the revisions to the 1989 directive, including Article 2, where the ambiguity to which I referred is removed. The revised directive, which was adopted by both the Council of Ministers and the European Parliament earlier this month, states clearly that establishment shall be the basis of jurisdiction, and sets out a hierarchy of criteria for defining the place of establishment of broadcasters. These regulations can now be read alongside this detailed guidance in the revised directive.
I would emphasise that the practical effect of the change is minimal. According to the Independent Television Commission, of the 150 or more broadcasters currently holding satellite broadcasting licences, fewer than half a dozen will be affected.
In the second part of its judgment, the European Court of Justice found that the UK had unlawfully established two licensing regimes for satellite broadcasting. The 1990 Broadcasting Act established two different licensing regimes. Domestic satellite services were defined as those which used UK frequencies and were designed for general reception in the UK. Non-domestic satellite services were those which did not use UK frequencies and were intended for general reception in the UK and elsewhere. The domestic regime required broadcasters to ensure that at least 25 per cent. of transmission time was allocated to independent productions, whereas non-domestic satellite licensees were only bound by the provisions of the broadcasting directive, which requires at least 10 per cent. of independent productions, where practicable. The court's judgment found that the distinction between these two regimes was discriminatory and that the UK was favouring its own viewers by imposing a more rigorous content regime on domestic satellite service licensees.
That had not, in fact, been either the intention or the effect of the UK's distinction between the two regimes. The large majority of the 150 or more licensed non-domestic satellite services use non-UK frequencies but in fact broadcast wholly or mainly to UK audiences. The different domestic satellite regime merely applies to UK satellite frequencies the kind of procedure applied for commercial UK terrestrial broadcasting frequencies; bids for the use of the spectrum and controls on content reflecting the scarcity of the resource.
Nevertheless, under the revised directive the UK clearly must license all satellite broadcasters established in the UK on the same basis. These regulations accordingly remove the distinction between the two types of satellite service. The domestic satellite service will be abolished and the non-domestic satellite service will be known as satellite television service licences.
Here again, the real effect of this change on existing licensees is minimal. There are at present no domestic satellite service licence holders, and there never have been. The new integrated regime may encourage more services to emerge. In particular, the duration of domestic satellite service licences, which requires broadcasters to plan and broadcast for 15 years as opposed to 10 years for non-domestic services, may have acted as a deterrent to broadcasters from using 562 UK allocated frequencies. It is in the UK's interest to retain those frequencies and the Government hope that the reduction in the duration of licences will encourage future applications for this resource.
The Government are fully committed to complying with their international obligations. The making of these regulations will enable the United Kingdom to do so in respect of the EC Broadcasting Directive. They will not however have any material effect on the thriving UK satellite broadcasting industry. I commend the regulations to the House. I beg to move.
Moved, That the draft regulations laid before the House on 18th June be approved [4th Report from the Joint Committee].—(Lord McIntosh of Haringey.)

§ Lord Inglewood
My Lords, I am sure the whole House will be grateful to the noble Lord, Lord McIntosh of Haringey, for his full explanation of the background to the making of these regulations. When I had the honour and privilege of being the Parliamentary Under-Secretary of State at the Department of National Heritage in the last administration, I considered these matters and it was I who set the process in motion which led to tabling these regulations and our discussion of them this afternoon. I confirm that the noble Lord's description of what was involved was extremely clear, full and thorough. In the meantime, the Government have changed, the Conservative Party has changed and I am not quite the man that I was then. At least, my view has not changed. We on these Benches support the regulations.
I was grateful that the noble Lord referred to the television without frontiers directive. I believe that its recent revision has been a triumph for United Kingdom policy and represents the culmination of much hard and skilful work by officials of the Department of National Heritage and our officials in Brussels. It is right and proper that they should be given credit for what was a major achievement for the United Kingdom. It shows, if these matters are carried forward skilfully, how it is possible to end negotiations in the European forum with very considerable success. We support the regulations.

§ Lord Kirkhill
My Lords, I consider it helpful that my noble friend made reference early in his remarks to the Council of Europe's model outline. Those of us who are delegates to that body spent many long hours in Luxembourg considering the detail and the difficulties of European implementation of the Council of Europe model. It is worth placing on the record, as my noble friend has done, that the Government see the Council of Europe model as a role which they are now supporting.

§ Lord McIntosh of Haringey
My Lords, I am grateful to both noble Lords for their welcome for the regulations. I acknowledge the parentage—perhaps it is the god-parentage—of the noble Lord, Lord Inglewood, and his colleagues in the preparation of the regulations in response to the judgment of the European Court of Justice. I am delighted to hear from him that the Conservative Party is changing. I hope that that process continues for a very long time.
563 My noble friend Lord Kirkhill referred to the Council of Europe trans-frontier television directive. I acknowledge the work of the Council of Europe and the noble Lord's part in it in the origins of television without frontiers. But I have to tell him that the judgment of the Council of Europe that the basis of the regulations should be uplink rather than establishment has in fact been overturned by the European Court of Justice. It is the Council of Europe which is now out of step with the European Community.
With those words, I commend the regulations to your Lordships.

§ Lord Kirkhill
My Lords, before my noble friend sits down, perhaps I may say that he should make a distinction, which he has not properly made, between the Council of Europe and the European Union. The Council of Europe and the Union are often out of step but the Council of Europe's convention remains.

§ Lord McIntosh of Haringey
My Lords, I thought I had recognised that fact. The Council of Europe has a very much wider membership and its convention still applies to those members of the Council of Europe who are not members of the European Union. But members of the European Union have to abide by the EC directive, as revised, and by the European Court of Justice.