EUROPEAN BROAD CASTING LAW AND POLICY Part 6 ppsx

develop-The original version of the Television Without Frontiers Directive In its original version Article 21 provided: Each Member State shall ensure that all television broadcasts tran

and in terms of the appropriate legal regime within the relevant memberstate that should be applied.

The original version of the TWFD sought to address the issue of diction The number of cases which arose on the interpretation of thatprovision suggests that this was not an entirely successful venture TheAmended Directive adopted the solution that the European Court ofJustice (ECJ) developed Yet, as we face a second revision process, the issue

juris-of jurisdiction has once again arisen This chapter will trace the ment of the jurisdiction clause and consider the impact on the viewingexperience In the light of this we shall assess the extent to which anappropriate balance between trade and non-trade issues has been found

develop-The original version of the Television Without Frontiers Directive

In its original version Article 2(1) provided:

Each Member State shall ensure that all television broadcasts transmitted by broadcasters under its jurisdiction, or by broadcasters who, while not being under the jurisdiction of any Member State, make use of a frequency or a satellite capacity granted by, or a satellite up-link situated in, that Member State comply with the law applicable to broadcasts intended for the public

in that Member State.

The provision envisages two possible situations: first, that where a ber state would normally have jurisdiction; and secondly, one in whichsatellite frequencies and uplinks come into play Looking first at the ‘nor-mal’ situation, the approach was not helpful In effect, the Union defined

mem-‘jurisdiction’ by saying that those that have jurisdiction have jurisdiction.The definition did not help in defining who would normally have the juris-diction to regulate broadcasts in a given situation This is perhaps symp-tomatic of the different viewpoints held on this matter; one Advocate-General suggested that the use of such vague terminology was designed tocover the fact that there was no political agreement as to the approach to betaken.2

The Commission, however, thought the matter of jurisdiction was clear

In its original proposal, the draft directive proposed by the sion included two defined terms not found in the TWFD as enacted:

Commis-‘internal broadcasts’, and ‘cross-frontier broadcasts’ ‘Internal broadcasts’

2 Case C-222/94 Commission v UK [1996] ECR I-4025, para 46 The Advocate-General

in his opinion in this case gives a thorough review of the possible interpretations of the jurisdiction clause.

were defined as the ‘initial transmissions by public or private ings engaged in broadcasting on the territory of a Member State ’

undertak-‘Cross-frontier broadcasts’ concerned only those transmissions capable

of reception by the public in another member state These definitionsindirectly addressed the issue of jurisdiction, and illustrate the Commis-sion’s approach in this matter The term ‘internal broadcast’ assignedresponsibility for regulation by reference to where the broadcasting bodywas established in the sense used in relation to the right of establishmentcontained in Article 43 EC This principle of home-country regulationwas reinforced by the inclusion in the definition of ‘internal broadcasts’

of the phrase ‘including transmissions exclusively intended for tion in other Member States ’ On this approach, place of receptionwas irrelevant This principle the Commission sought to re-emphasise in

recep-its explanatory memorandum and in recep-its first Report on the Application

of Directive 89/552/EEC.3 As the Commission noted, the member state

in which the broadcasting body was established would have jurisdiction

‘irrespective of the destination of the broadcast’.4

Although the Commission might have been clear in its views on thispoint, there were other possible ways of viewing jurisdiction The Con-vention on Transfrontier Television (CTT), enacted at approximately thesame time, took a different approach, as the British government arguedwhen the Commission brought action against it for faulty implementa-tion of the TWFD.5The UK government had interpreted Article 2 TWFD

to mean that jurisdiction to regulate content devolved to the state whichcontrolled the radio frequency on which the television programme wasbroadcast, taking into account the intended recipients of the broadcast.The ECJ broadly agreed with the Commission and held that jurisdic-tion depended on ‘establishment’, although it should be noted that theECJ seemed keen to distinguish between establishment in the usual treaty

sense of the term, as defined in Factortame,6and establishment in the cific context of broadcasting The test for establishment is usually taken

spe-to be ‘the actual pursuit of an economic activity through a fixed lishment in another Member State for an indefinite period’.7 The ECJ

estab-3 Commission, Report on the Application of Directive 89/552/EEC and a Proposal for a European

Parliament and Council Directive amending Council Directive 89/552/EEC (COM (95) 86

final), p 27.

4 Commission, Explanatory Memorandum, para 101.

5 Case C-222/94 Commission v UK.

6 Case C-221/89 Factortame and Others [1991] ECR I-3905.

7 Case C-221/89 Factortame, para 20.

determined establishment in the broadcasting context to be ‘the place inwhich a broadcaster has the centre of its activities, in particular the placewhere decisions concerning programme policy are taken and the pro-grammes to be broadcast are finally put together’.8None the less, despitethe definition highlighting the importance of the location of the editorialteam for determining establishment in the broadcasting sector, this ele-ment of the test would only become relevant if there were more than onelocation within the Union which could be considered to be a broadcaster’splace of establishment.9Reception as a criterion remained excluded.

This approach was maintained, with the exception of the De Agostini

case,10in subsequent cases which came before the ECJ on this point prior

to the amendment of the TWFD.11The EFTA Court has taken a similarline.12The issue of editorial control has resurfaced as the TWFD undergoesits second review, this time not in the context of determining the location

of the broadcaster but in determining the type of service (see furtherbelow)

Although this basic principle of establishment may have been clear

since Commission v UK, the ECJ’s later jurisprudence identifies a number

of refinements In VT413the issue of double control arose The Belgianauthorities sought to regulate the retransmission by cable or satellitebroadcasts originating from (and regulated by) the UK The company was

established in a ‘Factortame’ sense in the UK; not only was the company

incorporated under English law but senior management was based in the

UK and some programme decisions were made there Equally, however,VT4 had a physical presence in Belgium and some programme decisionswere made there Given that the definition of broadcasting in the orig-inal draft directive had been amended by the deletion of any reference

to ‘retransmission’ to ensure that member states’ regulatory authoritiesshould not exert secondary control in such circumstances, it is not sur-prising that the ECJ ruled against the Belgian authorities, despite the factthat the programmes were aimed at Flanders

8 Case C-222/94 Commission v UK, para 58.

9 See Advocate-General Lenz’s views in Case C-14/96 Criminal Proceedings against Paul

Denuit [1997] ECR I-2785.

10Joined Cases C-34-36/95 Konsumerntombudsmannen v De Agostini (Svenska) Forlag AB

and Konsumerntombudsmannen v TV-shop i Sverige AB [1997] ECR I-3843.

11Case C-11/95 Commission v Belgium [1996] ECR I-4115, Case C-14/96 Denuit, Case C-56/96 VT4 Limited v Vlaamse Gemeenschap [1997] ECR I-3143.

12Joined Cases E-8 and 9/94 Forbrukerombudet v Mattel Scandinavia A/S and Lego Norge

A/S, Report of the EFTA Court, 1 January 1994–30 June 1995, p 115.

13Case C-56/96 VT4 Limited v Vlaamse Gemeenschap.

Such an approach, although it prohibits two sets of regulation, doesnot address the question of which regulatory authority should have theright and the responsibility to regulate The problem is illustrated perhaps

more clearly in the earlier case of Denuit,14which concerned a companywhich was established in the UK but which broadcast to Belgium Editorialdecisions were made in the USA, as the company established in the UKwas the subsidiary company of an American company Despite the factthat the UK had the least to do with the actual programming broadcast,the ECJ, in the interests of protecting the internal market and the one-stopshop principle, held that the Belgian authorities could not regulate theservice The Belgian authorities argued that, given the British rules, which

at that time, distinguished between domestic and non-domestic satelliteservices, the UK authorities were not regulating the service Arguably,then, there was no duplication of regulation; indeed, unless the Belgianauthorities regulated, there was an absence of regulation The ECJ rejectedthis argument Member states cannot use another member state’s failure

to comply with Union law to justify their own failure to comply withUnion law

VT4 raised another issue; that of the ‘abuse’ of Union law to avoid

national regulation This issue had arisen in the context of broadcasting

before in the cases of TV1015 and Veronica.16 In its early jurisprudence

in van Binsbergen,17the ECJ had accepted that Union law should not beused to avoid national regulation This principle is sometimes referred

as anti-avoidance or the circumvention principle It was extended to the

broadcasting sector in TV10 and Veronica, both cases which concerned

broadcasters establishing themselves in Luxembourg, a state which mitted the broadcasting of advertising, but broadcasting at the Dutchaudience, thereby circumventing the Dutch restrictions on advertising

per-In the first of the two cases, Veronica, the ECJ accepted that the

establish-ment in Luxembourg was motivated by a desire to avoid the Dutch rules

It then held that Dutch legislation could in this situation be applied to the

14Case C-14/96 Denuit.

15Case C-23/93 TV10 SA v Commissariaat voor de Media [1994] ECR I-4795.

16Case C-148/91 Vereniging Veronica Omroep Organisatie v Commissariaat voor de Media

[1993] ECR I-487.

17Case 33/74 Van Binsbergen v Bestuur van de Bedrijfsvereniging voor de Metaalnijverheid

[1974] ECR 1299, para 13: ‘a member state cannot be denied the right to take measures to prevent the exercise, by a person providing services whose activity is entirely or principally directed towards its territory, of the freedom guaranteed by Article [49] for the purpose

of avoiding the professional rules of conduct which would be applicable to him if he were established within that state ’.

broadcaster What the ECJ did here was not state that the anti-avoidanceprinciple was an exception to the free-movement right, but instead thatthe company could not rely on those rights as it was, in reality, established

in the Netherlands This is a clearly different approach to establishmentfrom that taken under the TWFD, though, as we have noted, the two tests

of establishment (that in TWFD and that with regard to Article 43 EC)are not exactly the same.18

The implications of the Veronica judgment were examined more closely in TV10, with an emphasis on the circumstances in which the anti-avoidance principle would be applied Since the early case of van Binsbergen, it seemed that the central concern addressed by the ECJ

was that evasion of national rules was taking place; the nature of the

national rules evaded in a given case did not seem significant In Veronica,

a slightly different approach can be identified The ECJ had emphasisedthat the Dutch rules in question were aimed at protecting a public interest,although the ECJ also mentioned that the broadcaster was ‘improperlyevad[ing]’ the Dutch regulation.19 This arguably shifts the focus of theinquiry from the person (and possibly that person’s motivation) to thenational rules20 and, in particular, limits the permissible interests pro-tected by national rules to those viewed under Union law as being inthe public interest.21 By contrast, in TV10 both the Advocate-General

and the ECJ adopted a formulation in which a requirement for the avoidance principle to apply was that the national rules being evadedwere not incompatible with Union law.22 This formulation of the anti-avoidance or circumvention principle is arguably wider than that used in

anti-Veronica, as it is not necessarily limited to circumstances in which

‘overrid-ing interests’ in the sense of Union law (that is, goals Union law recognises

as being in the public interest; see chapter4) are in issue Although theprecise scope of permissible national rules is not clear,23the focus is once

18See, e.g., ECJ’s assumption in Case C-14/96 Denuit, para 23.

19 As we have seen in ch 5, the ECJ has accepted that measures designed to protect media pluralism are in the public interest, though it has found very few of them in practice to be acceptable under Union law, viewing most of them as disproportionate.

20 L Hell Hansen, ‘The Development of the Circumvention Principle in the Area of

Broad-casting’, Legal Issues of European Integration 25 (1998 /2), 111, p 122, for criticism in the lack of clarity in the ECJ’s reasoning here.

21 For a discussion of the scope of derogations in Article 46 EC and interests of overriding

public interest, see, e.g., L Woods, Free Movement of Goods and Services in the European

Community (Aldershot: Ashgate,2004 ), ch 12, esp pp 249–54.

22Case C-23/93 TV10: Advocate-General Lenz, Opinion paras 12–15; judgment, paras 20–1.

23 There may, for example, be problems with the acceptability of rules perceived as portionate to their aims; see further ch 4

dispro-again on the body seeking to rely on arguments about the right to freedom

of movement These cases suggest that a company which establishes inone member state and broadcasts to another to evade the receiving state’ssystem of regulation aimed at protecting media diversity and freedom ofexpression would find itself subject to the receiving state’s rules The ECJ’stheory underlying this point is not so clear

In some ways, it seems that the focus of the ECJ’s approach is on

wrong-doing, not on the substance of the rules evaded, as we can see in TV10,

which narrowed the scope of the anti-avoidance principle in another

important aspect In TV10, the ECJ appeared to set down a two-stage test:

the broadcaster’s output should be directed wholly or principally towardsthe member state seeking to claim jurisdiction; and the broadcaster musthave established itself in another member state in order to enable it to avoidthe rules in issue.24 Although an approach focussing on the beneficiary

of the free-movement right seems to broaden the scope of action left

to member states, the formulation here seems to limit the application

of the principle to cases of deliberate, and therefore blatant, evasion

This formulation is much narrower than the early formulation in van Binsbergen Although it might be argued that the question of whether the

broadcaster was directing its broadcasts wholly or principally at anothermember state is an objective question of fact, neither the ECJ nor theAdvocate-General gave any indication as to what factors should be takeninto account A difficulty arises as, in adopting a two-stage test, the ECJ

is reintroducing the question of motive, implicit in its comments in van Binsbergen,25 into the anti-avoidance equation The question, then, ishow would one prove motive? As noted in the cases brought under theTWFD, many of the factors that one might rely on to show intent toevade, or indeed the fact that a broadcast is aimed at another memberstate, are based on assumptions about where the nationals of particularmember states would ‘normally’ be working They are therefore based

on assumptions contrary to fundamental principles of Union law, whichprohibit discrimination based on nationality and assumptions such as theDutch not normally working in Luxembourg

Given that the question of establishment turned out to be crucial forthe application of TWFD, and especially given the difficulties encoun-

tered in cases such as Denuit and VT4, the potential application of the

anti-avoidance principle within the context of TWFD was important, ticularly from the perspective of the receiving member state’s regulatory

par-24Case C-23/93 TV10, para 26. 25Case 33/74 van Binsbergen, para 13.

authorities In VT4, the regulatory authorities argued that the sole reason

that the company established itself in the UK was for the purpose of ing the monopoly granted to VTM on the broadcasting of advertising Ittherefore constituted a blatant case of forum shopping, or regulatoryarbitrage; that is, choosing one’s place of establishment with a view toaffecting the law applicable to one’s activities The referring court did notraise this question in its reference to the ECJ, which therefore did notaddress the issue.26The Advocate-General, however, did, suggesting that

avoid-the TV10 principle should continue to apply even after avoid-the entry into force

of the TWFD, although he suggested a very restrictive interpretation ofthat principle.27

The matter of jurisdiction within the terms of the TWFD also arose in

de Agostini, which, on the face of it, concerned similar patterns of facts to

the Belgian cases A broadcaster established in the UK was broadcasting

to Sweden in contravention of a number of the Swedish rules on ing, both advertising aimed at children and misleading advertising TheAdvocate-General in this case adopted an analysis which followed the

advertis-ECJ’s approach in Commission v UK and the Belgian cases Although

he did recognise the potential application of the anti-avoidance principle,

he emphasised that it should not be read too widely.28The ECJ, however,took a different approach Instead of looking at formal criteria relating

to where the broadcaster was established, which assumes that the TWFD

is the relevant piece of legislation, it considered the subject-matter ofthe TWFD and whether the TWFD was the only Union act to take intoaccount That is, did the TWFD harmonise the field exhaustively, even ifonly at a minimum level? By referring to the recitals, it became apparentthe TWFD was not the only possible piece of relevant legislation TheTWFD envisaged that, in the field of advertising, other Union measuresexisted which would also govern advertising, though the terms of therecitals are not limited to specific directives This fact opened the wayfor the ECJ to mitigate the impact of its rulings regarding jurisdictionalallocation of power, by removing the subject-matter of the dispute fromthe scope of the TWFD at an earlier point in the analysis The issue for theECJ was not one of whether the matter concerned broadcasting ratherthan another form of communication service, but whether the TWFD

26 Note that the EFTA Court in a similar case under the TWFD did not adopt the

anti-avoidance principle: Cases E-8 and 9/94 Mattel and Lego.

27In this he took the same approach as he had done in Case C-11/95 Commission v Belgium.

28Cases C 34-6/95 de Agostini, Opinion of the Advocate-General, para 45 For criticism of

this approach, see Hansen, ‘Circumvention Principle’, pp 132–3.

was the end-point of the legal analysis within the broadcasting sphere In

de Agostini, there turned out to be a difference between the rules

relat-ing to children, which the ECJ determined were covered entirely by theTWFD in its provisions relating to the protection of minors in the con-text of advertising, and the misleading advertising provisions As well asbeing dealt with by the TWFD, the prohibition of misleading advertis-ing was harmonised within the context of advertising generally Surpris-ingly, the ECJ also held that the recitals which referred to other Unionmeasures also implied that there might still be room for member stateaction within the scope of areas which the TWFD co-ordinated but didnot harmonise.29 The ECJ stated that member state national rules onmatters co-ordinated by the TWFD would be permissible provided thatthey did not constitute a secondary means of control over broadcasts,which would undermine the TWFD This statement is problematical

In its analysis, the ECJ seems to treat the problem relating to tising as separate from that concerning broadcasting, which overlooksthe fact that, as advertising is content, it is hard to distinguish betweenbroadcasting and advertising in this way It is questionable whether, in

adver-practice, de Agostini saves many national laws as, given the link between

advertising and the broadcasting service, it is hard to imagine a situationwhere national advertising rules would not act as a secondary means ofcontrol

Prior to the revision of the TWFD the issue of jurisdiction wasclear, though giving rise to concern The possibility of using the anti-avoidance principle to relocate establishment to the receiving memberstate within the terms of the TWFD was slim Questions of editorialdecision-making notwithstanding, formal institutional criteria were ofgreater weight than those relating to the substance of the broadcast con-tent itself Some member states and some commentators were worriedthat the approach adopted by the ECJ, although it did not follow exactlythat of the Commission, was orientated towards the commercial consid-erations of broadcasting That is, it did not seem to take into account thecultural aspects of broadcasting, allowing no place for member state sen-sitivity in these areas and overlooking the interests of citizens The earlier

approach in Veronica and TV10 allowed some scope for member states

to clamp down on those broadcasters which were deliberately ‘playing

29 A similar approach has been taken with respect to the e-Commerce Directive (Directive 2000/31/EC), discussed in J H¨ornle, ‘Country of Origin Regulation in Cross-border Media:

One Step Beyond the Freedom to Provide Services?’, International and Comparative Law

Quarterly 54(1) (2005 ), pp 89–126.

the system’ so as to evade inconvenient national rules, the scope of thisapproach was limited and also unclear Once the TWFD was enacted, thescope of the anti-avoidance doctrine was narrowed down still further Theproblem for the ECJ in this context is that an over-broad interpretation

of the anti-avoidance principle can be used to undercut entirely the dom of establishment and the freedom to provide services.30Although de Agostini might, as discussed, provide some legal space for national rules,

free-this would apply to limited types of content, mainly advertising-based

content, and give rise to other practical problems De Agostini illustrates

one of the ironies underlying the TWFD, in that it is in the areas inwhich the member states have recognised the greatest need for action,such as the protection of minors, that the internal market rules operatethe most clearly to bring the level of protection down to the lowest levelwithin the Union (see chapters4and10) Despite the fact that the TWFDallows member states to take action to impose higher standards on broad-casters within their jurisdiction, these standards cannot be imposed onbroadcasters established elsewhere As ever, the ECJ’s toleration of reversediscrimination functions so as to trigger a downward spiral in standards

to the lowest level

The 1997 Amending Directive

Although the 1997 Amending Directive retains the principle of the stop shop’, namely that there should only be one regulator throughout theUnion in respect of a given broadcaster, it recognises that the variety offactual situations was not adequately dealt with by the interpretation given

‘one-to the previous version of Article 2 The revised Article 2, relying heavily

on the approach taken by the ECJ in its case law, details various factualpermutations and the impact thereof on the determination of jurisdiction.The ultimate fall-back position, however, is that of the Commission, the

use of the Factortame definition of establishment.31

Although the Amending Directive, in reaffirming the ‘one-stop shop’principle, recognises internal-market concerns, it also takes note of the

30 In the context of freedom of establishment, see the development of the case law in Case

C-212/97 Centros v Erhvervs-og Selskabsstyrelsen [1999] ECR I-1459 etc; is part of the

development of case law to do with the difference between access to the territory/market versus professional rules for behaviour in the market?

31This remains in the draft second amending directive: Commission, Proposal for a Directive

amending Directive 89/552/EEC, COM (2005 ) 646 final, 2005/0260 (COD), SEC ( 2005 )

1625 and 1626, p 15, Article 2(5).

anti-avoidance principle by making express reference to it in Recital 14.This suggests that, despite the difficulties noted earlier in the ECJ’s rulings

in this area, the anti-avoidance principle remains available to the tory authorities in recipient member states to allow them to take actionagainst broadcasters which are playing the system Recitals are not, how-ever, legally binding provisions, and there is no expression of the principle

regula-in the operative parts of the directive Given that recitals are aids to regula-pretation, one might suggest that the jurisdiction clause be read in the light

inter-of Recital 14 If the anti-avoidance principle is seen as affecting the

deter-mination of establishment, as it did in TV10, the lack of a legally binding

anti-avoidance principle in the TWFD complicates an already confusedstate of affairs The problem is exacerbated by the fact that some of thecriteria that can be used to identify the abuse of free-movement rights,such as location of workforce, are also used to determine jurisdictionwithin the TWFD There thus seems to be the possibility of blurring thetest for establishment with that for the application of the anti-avoidanceprinciple

The draft second amending directive (DSAD) introduces provisionswhich allow member states to counter ‘abuse or fraudulent conduct’, sub-ject to compliance with certain procedural requirements although thewording changed through the legislative process.32Crucially, DSAD doesnot define what it meant by ‘abuse or fraudulent conduct’, specifying thatthe requirement to act is to be proven on a case-by-case basis Recital

23 to DSAD indicates that the provision is intended to codify the ECJ’sjurisprudence in this regard Given the somewhat unclear line of reason-ing the ECJ has adopted, it is interesting that the recital refers to only some

of the ECJ’s decisions in this area: van Binsbergen, TV10 and Centros This suggests that the limitations imposed by the Veronica line of reasoning

will not find their way into the TWFD; it does not help to clarify theprecise circumstances in which the provision may be used The vagueness

of this drafting is a serious weakness in the provision, opening the wayfor inconsistencies in the way it is used, which provides no benefit either

to promoting the internal market or respecting the cultural competence

of the member states

The jurisdiction clause as it currently stands is structured so as to tify a range of possible factual circumstances, starting with the simplest,and moving on through a range of more complicated company structures

iden-32 See draft second amending directive COM( 2005 )646 final, Article 2(7)–(10) See also

appendix

Jurisdiction is determined by applying the criteria set out in paragraphs3–5, starting with (3)(a) The relevant provisions provide:

(3) For the purposes of this Directive, a broadcaster shall be deemed to be established in a member state in the following cases:

a the broadcaster has its head office in that member state and the editorial decisions about programme schedules are taken in that member state;

b if a broadcaster has its head office in one member state but editorial decisions on programme schedules are taken in another member state, it shall be deemed to be established in the member state where a significant part of the workforce involved in the pursuit of the television broad- casting activity operates; if a significant part of the workforce involved

in the pursuit of the television broadcasting activity operates in each of those member states, the broadcaster shall be deemed to be established

in the member state where it has its head office; if a significant part of the workforce involved in the pursuit of the television broadcasting activ- ity operates in neither of those member states, the broadcaster shall be deemed to be established where it first began broadcasting in accordance with the system of law of that member state, provided that it maintains

a stable and effective link with the economy of that member state;

c if a broadcaster has its head office in a member state but decisions on programme schedules are taken in a third country, or vice versa, it shall

be deemed to be established in the member state concerned, provided that a significant part of the workforce involved in the pursuit of the television broadcasting activity operates in that member state.

(4) Broadcasters to whom the provisions of paragraph 3 are not applicable shall be deemed to be under the jurisdiction of a member state in the following cases:

a they use a frequency granted by that member state;

b although they do not use a frequency granted by a member state nor

a satellite capacity they do use a satellite capacity appertaining to that member state;

c although they use neither a frequency granted by a member state they do use a satellite up link situated in that member state.

(5) If the question as to which member state has jurisdiction cannot be determined in accordance with paragraphs 3 and 4, the competent member state shall be that in which the broadcaster is established within the meaning

of Art [43] et seq of the Treaty establishing the European Community.

The article is arranged in a hierarchical manner This works accordingly:

if you do not fall into the first situation, then you move on to consider

the other possibilities Subparagraph 4 operates only if 3 does not apply,and 5 comes into play only if neither 3 nor 4 does.

Although the TWFD in its amended form recognises some of theproblems in the area of jurisdiction, it is not trouble-free Looking atthe amended text, it can be seen that paragraph 3 is more sophisti-cated than its predecessor Although the starting-point in 3a takes a fairlystraightforward approach, paragraph 3b recognises that there may bemore complicated corporate structures than the one mentioned in para-graph 3a This is evidenced by the separation of the criteria of ‘head office’and ‘editorial decisions on programme schedules’ Whilst this distinction

is aimed at making the case for jurisdiction more clear cut, it actuallyobscures the issue By failing to define clearly what constitutes ‘editorialdecisions on programme schedules’ or ‘the head office’, the criteria ofestablishment are confusing and potentially incompatible Further, thedefinition adopted will have a profound impact on where establishmentlies in a given case The meaning of the term ‘editorial decisions aboutprogramme schedules’ is itself very problematic The assumption made

in Article 2 is that the editorial decisions and programme-schedulingare done in the same place This is not necessarily the case Editorialdecisions tend to be policy-oriented decisions made by the Director ofProgramming, or a person who is senior in the management hierarchy.Decision-making about local programme-scheduling, however, is often

a commissioning decision and may be made by a Commissioning Editorbased in the receiving member state, that is, someone further down thecorporate hierarchy.33

Even assuming this difficulty can be addressed, we still need to identifythe level of autonomy ascribed to the notion of editorial decision-making.This may vary widely between different broadcasters, particularly depend-ing on where and how an individual broadcaster sources its content.The same content and scheduling may be broadcast to different mem-ber states, changed only in relation to dubbing or subtitling, meaningthe local offices, in practice, have little autonomy By contrast, it may bepossible for branch offices or subsidiaries to have a greater degree of con-trol over scheduling, or even over some elements of programme content

In this case, it is debatable whether the internal-market rationale shouldapply to those channels which customise programmes for their own par-ticular markets, in effect creating a different product In this instance, the

33C Murroni and N Irvine (eds.), Quality in Broadcasting (London: IPPR,1997 ).

impact of programme-classification or scheduling requirements on theinternal market will need to be reconsidered.

The operation of the jurisdiction clause becomes even more atic when we consider the impact of interactive television and the variousadditional services that may be provided in addition to ‘standard’ or ‘tra-ditional’ television Editorial services for electronic programme guides(EPGs) may be provided by a different entity from that providing thecontent In addition, some interactive services, as well as splitting thelocation of the service between provider and recipient, may not havemuch editorial content at all Further, as we shall see below, there areproblems with the concept of editorial decision-making when the broad-caster is merely retransmitting pre-packaged bundles of channels We canthus see, as suggested in chapter1, that changes in the broadcasting envi-ronment affect the operation of regulatory systems, as categorisationsappropriate to an environment at one stage of its evolution do not fit wellwith it at a later stage of its evolution

problem-Once the location of the head office and the location of the editorialdecisions are separated, the question of establishment is determined by

a third factor outlined in Article 3b ‘a significant part of the workforceinvolved in the pursuit of television broadcasting activity’ Again, thisphrase has not been defined, or distinguished from any of the other termsused in the provisions It is not clear whether dubbing and subtitling torender programming appropriate to national markets is sufficient to con-stitute some form of editorial input, or whether it should merely be seen asfalling within the ‘pursuit of television broadcasting activity’, or whether

it can be seen as both broadcasting activity and editorial activity Clearly,the determination of the meaning of terms and phrases like ‘head office’,

‘editorial decisions on programme schedules’ and ‘a significant part of theworkforce involved in the pursuit of the television broadcasting activity’

is important if we are to understand fully how a broadcasting company’sstructures interrelate and so ascertain which member state has jurisdic-tion In paragraph 3b any failure to identify the member state which hasjurisdiction leads, by default, to consideration of the head office as theplace of establishment Given that ‘head office’ may not do anything butact as a legal or financial base, and that it may not even see or controlcontent for which it is technically responsible, it would seem to be moresensible to have, as the default position, the country in which editorialdecisions are being made Problems arise, of course, were this to be athird country state, as has been the case where American companies areproviding content for their European subsidiaries

Paragraph 3c highlights the difficulty of trying to identify jurisdictionwhen a third country, which is responsible for editorial decisions aboutprogramme schedules, is located outside the Union Given the nature ofthe media industry, with the sector being dominated by a few transnationalconglomerates, this may be increasingly likely to be the case In such acase, jurisdiction is established in the member state in which the headoffice is located, provided that a significant part of the workforce which isinvolved in the pursuit of television broadcasting activity is also located

there As in Paul Denuit, this may not always be the case In recognition

of this point, paragraph 4 locates jurisdiction with the member state in

which the satellite link or licence is located Applying this to Paul Denuit,

the country containing the satellite uplink, Luxembourg, could have beenthe country which held jurisdiction, even though editorial decisions aboutprogramming schedules were made in the USA and the content received

in Belgium Even if a programme/channel is not intended for reception

in the Union, it, according to the terms of Article 2(4), can fall withinthe jurisdiction of a member state if the broadcaster is using capacityconnected with a member state or an uplink in a member state Thiscould bring a number of channels not intended for the European marketbut using the Astra satellite within the Luxembourg jurisdiction, althoughthere are some safeguards against this.34

A further change introduced by the 1997 revision of the TWFD wasone that might not seem to have an immediate impact on the definitionclause: that is, the definition of broadcaster, introduced in Article 1 It is,however, significant because it outlines the scope of the TWFD Memberstates will have jurisdiction over broadcasters as understood in the terms

of the TWFD, which might, or might not, coincide with the concepts used

in the individual member states’ regulatory regimes According to Article1(b) of the current TWFD:

‘broadcaster’ means the natural or legal person who has editorial sibility for the composition of schedules of television programmes within the meaning of (a) and who transmits them or has them transmitted by third parties.

respon-It can be seen that there are parallels between the concepts used here andthose used to determine jurisdiction There are similar problems with

a lack of clarity as to the meaning of the terms used The term caster’ seeks to determine some boundaries: the reference to television

‘broad-34 See draft second amending directive COM( 2005 )646 final, Article 2(6).

programmes refers to the definition of television broadcasting itself, andseeks to exclude data services The key concept in the definition is ‘editorialresponsibility’ It operates to distinguish between content-based decisionsand transmission decisions, thus re-emphasising the boundary betweencontent and delivery mechanisms, again a difficult boundary to draw(see chapter6) This still leaves unclear the question of what is ‘edito-rial responsibility’ It is doubtful if the idea of editorial responsibility isadequate or entirely appropriate in a multi-channel environment, whencompanies may well be reliant on prepackaged American offerings withwindows left for regional advertising or some programming It seems edi-torial responsibility has to cover a wide range of circumstances reflectingthe new economic reality of a vertically integrated market The breadth

of these circumstances is unhelpful for policymakers who wish to identifycertain points in the broadcasting process that in their view need to beregulated As Gibbons notes, it is not necessarily the top end of the supplychain which is central, despite the fact that it has the closest link to thetraditional idea of editorial responsibility.35

The impact of technological change on regulatory categorisations isfurther complicated in the Union, since there are a number of regimeswhich regulate electronic communications When the TWFD was enacted,the nature of broadcasting and thus the type of activity regulated by theTWFD seemed fairly clear if not self-evident Broadcasting was defined

in the TWFD by reference to the transmission of television programmes,with some data services being specifically excluded As we shall see whendiscussing advertising (see chapter9), this definition of broadcasting isproblematic We argue here that the definition may be inadequate Thenature of broadcasting is not so clear in these days of narrowcasting, web-casting and interactive television The problem was becoming evident

by the 1997 revision of the TWFD, when, although the actual definition

of broadcasting remained the same, the distinction between near video

on demand (NVOD) and video on demand (VOD) was introduced todelimit the scope of the TWFD Without actually discussing the nature ofbroadcasting, it seems the European institutions have determined that theboundary between broadcasting and other ‘information society’ serviceslies here (see chapter3) The term ‘information-society service’ is defined

as ‘any service normally provided for remuneration, at a distance, by

35 T Gibbons, ‘Jurisdiction Over (Television) Broadcasters: Criteria for Defining

“Broad-caster” and “Content Service Provider”’, in The Future of the ‘Television without Frontiers

Directive’, Schriftenreihe des Instituts fur Europ¨aisches Medienrecht (EMR) 29, (2004 )

p 57.

electronic means and at the individual request of a recipient of services’.36Information-society services can be delivered via all digital communica-tion platforms such as the Internet, 3G mobile phones and also by digitaltelevision Although television broadcasting itself within the meaning ofthe TWFD is not an information-society service, because its programmesare not provided at individual request, a distinction between near video

on demand (NVOD) services which broadcast to many viewers at onceand video on demand (VOD) services which are broadcast to individualshas been made: NVOD is caught by TWFD; VOD is not The differenceappears to lie in the individuality of the service rather than its interac-tivity NVOD is still delivered to mass audiences; although that audiencemay have some freedom to select a start time that suits each viewer’s indi-vidual convenience, their choice is exercised within the framework of apredetermined set of options as to content and timing VOD is not subject

to these constraints The significance of the distinction is that, currently,information-society services are subject in general terms to much lightertouch regulation than is broadcasting.37 The viewing experience within

an information-society context is therefore less carefully controlled

In this, the TWFD is consistent with earlier views, particularly thoseexpressed by the Commission, about the mass nature of broadcast-ing Some of the problems of the boundary between broadcasting and

information-society services were considered by the ECJ in Mediakabel,38

which concerned pay-per-view (PPV) television The service offered wasavailable as follows: a subscriber had the option of ordering a film from

a catalogue offered by Mediakabel; any order would be made separately,using the subscriber’s remote control or telephone using a personal iden-tification code and paying by automatic debit After payment, the sub-scriber would receive an individual key which would allow him to viewone or more of the sixty films on offer each month, at the times indicated

on the television screen or in the programme guide Mediakabel arguedthat this service was accessible only on individual request and that itshould therefore be classified not as a television broadcasting service but

as an information-society service supplied on individual demand withinthe meaning of the third sentence of Article 1(a) of Directive 89/552 The

36 Art 1 of Directive 98/34/EC as amended by Directive 98/48/EC, OJ [1998] L 217, p 18.

37 Definition of geographical jurisdiction might vary also: note the exception clauses in the e-commerce directives which allow for different public interest objectives to be taken into account than are listed in TWFD For a discussion of the jurisdiction clause and exclusions

in the e-commerce directive, see J H¨ornle, ‘Country of Origin Regulation’, passim.

38Case C-89/04 Mediakabel BV v Commissariaat voor de Media, judgment 2 June 2005.

ECJ held that the manner in which images are transmitted is not a mining element in the assessment as to whether a service is broadcasting

deter-or an infdeter-ormation-society service In this, the ECJ was following its dition of technology neutral assessments under TWFD The ECJ arguedthat

tra-a ptra-ay-per-view television service, even one which is tra-accessible to tra-a limited number of subscribers, but which comprises only programmes selected by the broadcaster and is broadcast at times set by the broadcaster, cannot be regarded as being provided on individual demand 39

Whether this distinction remains viable with the introduction of personalvideo recorders (PVRs), Internet access via television programmes andtelevision delivery via mobile telephone is debatable Further, the ‘push’versus ‘pull’ distinction which is sometimes used to justify this boundary

is problematic It is based on viewer choice, that is, viewers have chosen toselect and watch information-society services such as VOD, in that theyhave chosen to pull the information There is, it is argued, less need forregulation of these services The implicit contrast is that in the traditionalbroadcasting environment viewers did not have the range of choice andtherefore content provided to these viewers needed to be more heavilyregulated Whether this argument justifies treating VOD, which from theviewers’ perspective is not readily distinguished form NVOD, differentlyfrom NVOD is highly questionable, as the same content may be shown

by both VOD and NVOD As we noted in chapter5, it is also able whether such an approach respects the much-vaunted principle oftechnological neutrality

debat-The proposed solution of the European Parliament, and one that hadbeen raised earlier during the consultation on convergence but rejected,was that there should be one content directive (covering all electroniccontent, including television) Quite apart from the question of whether

it is possible to make a clear boundary between content and transmission,this proposal would raise some difficult questions about the appropriatelevel of regulation Typically, point-to-point communications (and those

in which the viewer is active in selection of material rather than passive)have been subject to lighter levels of regulation than the traditional point

to multipoint broadcast media Additionally, the Internet breaks downnational boundaries to a greater degree In the light of this develop-ment and the earlier introduction of satellite direct to home (DTH)

39Case C-89/04 Mediakabel, para 32.

broadcasting, we can no longer talk about closed national informationsystems The new technologies therefore bring into question some funda-mental assumptions about the broadcast media, its function and the wayits content is distributed.

These issues were discussed during the review process of the TWFD in

2005, with the Commission putting forward a proposal which sought tointroduce a broader directive covering all audiovisual content, but withcertain types (that is point-to-multipoint transmissions by whatever tech-nology) being subject to a greater level of regulation To this end, DSADcontains a definition of ‘audiovisual media service’ as well as televisionbroadcasting although it too was amended during the legislative pro-cess.40Given the scope of audiovisual media service is potentially broad,the recitals state that DSAD does not cover non-economic activity, as well

as personal correspondence by email.41 Given the breadth of the ECJ’sapproach to the scope of services,42it is questionable how many serviceswill actually be excluded by this definition

A basic level of obligations is imposed on all media service providers;43broadcasters remain subject to extra obligations The recitals note that

‘the importance of audiovisual media services for societies, democracyand culture justifies the application of specific rules’ to audiovisual mediaservices Interestingly, there is no attempt to justify why traditional broad-cast media are subject to more stringent rules, although the explanatorymemorandum highlights the importance of not restricting the market

in developing services, thus suggesting a commercial emphasis to theunderlying rationale of DSAD The distinction between the two is thelinear or non-linear nature of the service Broadcasting is defined as alinear audiovisual service Although a linear service is not defined, DSADcontains a definition of ‘non-linear service’, being ‘an audiovisual mediaservice where the user decides upon the moment in time when a specific

40 For a description of all the elements in the ‘audiovisual media service’ definition, see

Commission, Non-paper on Definitions in the Proposal for an Audiovisual Media Services

Directive, February 2006, available on http://europa.eu.int/comm/avpolicy/regul/regul/

en.htm#4 See also appendix

41 Draft second amending directive COM( 2005 )646 final, Recitals 13–16.

42See, e.g., Joined Cases C-51/96 & 191/97 Christelle Deli`ege v Ligue Francophone de Judo et

Disciplines Associ´ees ASBL et al [2001] ECR I-2549, discussed in L Woods, Free Movement

of Goods and Services, pp 172–4.

43 These concern the protection of minors, a prohibition on the incitement to hatred, a requirement that the media service provider be identified, a requirement that commercial communications should be identified as well as some qualitative restrictions on commer- cial communications.

programme is transmitted on the basis of a choice of content selected bythe media service provider’ Thus, DSAD draws the line for the higherobligations between NVOD and VOD As the recitals to DSAD note,the notion of editorial responsibility is ‘essential for defining the role ofthe media service provider’ and consequently for the services covered.This indicates, as we have suggested above, that editorial responsibility isabout scheduling decisions and content-packaging rather than decisionsabout the content in individual programmes In this context, the mean-ing ascribed to editorial responsibility is counter-intuitive Although theproposed changes mean we are less likely to have to decide which Unionmeasure to apply (TWFD or e-Commerce Directive), nevertheless the dis-tinction between broadcasting and information-society services remains,given the graduated approach proposed in DSAD The question of juris-diction will be reformulated, however, as to whether the basic regimefor all audiovisual media services applies, or whether the more stringentbroadcasting regime is applicable.

Conclusion

The operation of the jurisdiction clause has allowed forum shopping

on the part of some broadcasters Forum shopping threatens ual member states’ approach to broadcast regulation, despite the recog-nised division of competence between the Union and the member states.Although to a certain extent this process had occurred under the treatyprovisions, particularly Article 49 EC as relating to services, the impact

individ-of the TWFD, and particularly the ECJ’s approach to jurisdiction, seems

to have exacerbated this tendency The issue of jurisdiction remains tested as member states seek to protect their cultural concerns againstthe impact of commercial considerations in a framework which seems toallow the dislocation of regulation and favour internal market goals.Although the doctrine existed to allow ‘exceptions’ to the treaty free-doms in the form of the circumvention or anti-avoidance principle, thishas been interpreted increasingly narrowly, and the ECJ has not, in prac-tice, used it in the context of the TWFD Despite some concern by a num-ber of member states, this is the approach that continues to be adopted,even in a Union that, post-Nice, has not only some level of cultural compe-tence but provisions in the Charter of Rights that recognise the importance

con-of press (and media) diversity and pluralism Instead, the ECJ’s approach

in de Agostini has highlighted problems with the scope of the TWFD and

the fact that the original directive (and, indeed, the Amending Directive)