THE LEGAL AND REGULATORY FRAMEWORK FOR THE NEW MEDIA ENVIRONMENT
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- Prosper Knight
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1 THE LEGAL AND REGULATORY FRAMEWORK FOR THE NEW MEDIA ENVIRONMENT
2 AFTERNOON AGENDA What is the Broadcasting Commission? -Hot button issues being addressed by BCJ -CABLE INDUSTRY AND ADVERTISING -DIGITAL TELEVISION -MEDIA OWNERSHIP -COMPETITION -SPECTRUM -INDEPENDENCE -BROADBAND DEPLOYMENT -HOW BCJ RULINGS ARE LIKELY TO IMPACT THE FUTURE OF MEDIA AND BUSINESSES OPERATING IN THE NEW MOBILE DIGITAL MEDIA SPACE
3 The Broadcasting Commission The Broadcasting Commission was established under the Broadcasting and Radio Re-Diffusion Act of Its role is to monitor and regulate broadcast radio, television and subscriber television. Its subject areas include: Administering the Broadcasting and Radio Re-Diffusion Act and the Television and Sound Broadcasting Regulations
4 The Broadcasting Commission Evaluating licence applications and making recommendations to the Minister of Information on grant, renewal, terms and conditions of licences Ensuring that the operations and the programming of licensees it regulates meet the standards set out in law Providing media policy advice to the Minister of Information Conducting or commissioning research on all areas relating to the electronic media in Jamaica.
5 The Broadcasting Commission Fully independent in its decision making, but not fully autonomous. Acts in an advisory capacity in relation to the grant, suspension or revocation of licences. The Minister of Information is the final authority on licensing matters for broadcast and subscriber television. Spectrum Management Authority allocates spectrum and manages spectrum matters.
6 JAMAICA COMMUNICATIONS NOW AND IN THE FUTURE The All Media Monitoring Survey of 2006, tells us that there are approx 980,000 television sets in Jamaica, with a potential audience of 1.5m, down from 1.7m in There are 1.9m radio sets with an audience of 1.2m declining from 1.6m in 2005 and 1.7m in There is a greater trend towards TV viewership than radio Question: Where are the TV and Radio people going? (new media/web/mobile Digicel TV?)
7 JAMAICA COMMUNICATIONS NOW AND IN THE FUTURE Internet use still relatively low at 3.85 users per 100 population (30% of population) 2.1 million people use mobile phones almost 100% of population 2004 cable figures estimate 268,200 with approx 1.5m potential audience, estimated 10% of all homes.
8 JAMAICA COMMUNICATIONS NOW AND IN THE FUTURE Radio, newspapers, local TV/cable share the market at 33%, 32% and 35% respectively. Television enjoys lion share of audience
9 STRUCTURE OF JAMAICAN INDUSTRY 3 free-to-air stations, TVJ, CVM, LOVE TV, with radio and print affiliates RJR, Hot 102, Love FM,The Gleaner, XXX News, Power radio stations 51 subscription licensees in 246 zones all island operator coming soon. Local cable channels and content providers, HYPE, RETV, CPTC, Music+. Independent content providers.
10 The historical, legal, and institutional contexts in which innovation takes place. Conversion: It changes everything The term paradigm shift is overused, but conversion of technology fits the bill. At the fundamental level of the legal and regulatory framework, convergence can be expected to change the rules of engagement between regulator and regulated, the market, and dynamics of relations between citizen, customer, consumer and service providers/vendors.
11 The historical, legal, and institutional contexts in which innovation takes place. Convergence Challenges Migration to converged license regime Alternative infrastructure providers Independent and unified regulatory framework Competition issues Level the playing field Removal of licensing restrictions Lower upfront license fees Technical standards and Frequency spectrum Technology neutrality Evolving standards Optimal allocation of spectrum Culture and Content Cross-media ownership limitations Conditions for foreign media investment Internet governance and content Self-regulation and co-regulation Universal Service and promoting wider access Improving teledensity in rural areas Affordability and cherry-picking Challenges of awareness
12 THE DYNAMIC MEDIA ENVIRONMENT Radically change in home viewing environment since last 10 years. Melding of new and traditional media leading to emergence of new media platforms Increase in number of available channels, increase in foreign signals, VCR s, DVD s, personal computers, electronic games. New media technologies are relatively inexpensive & less complicated Increased programming choice = increased market competition ultimately influencing business models. Broadcasters cannot rely solely on advertising revenues in the new digital age. commercial and entertainment programming, now mainstay of media content
13 What s hot THE DYNAMIC MEDIA ENVIRONMENT Internet radio/webcasting radio broadcasting utilising the Internet platform Satellite radio two developments are accelerating its deployment 1. Providers forging ties with the automobile industry. 2. More portability. No longer confined to cars (Note XM-to-go) Video-on-demand/ pay TV viewers are able to control what they want to watch and when.
14 THE DYNAMIC MEDIA ENVIRONMENT What s hot Datacasting. Once a separate activity associated with telecommunications networks, it is expanding to broadcasting. Technology being perfected to allow customers to interact with broadcast content Podcasting a form of personal radio broadcasts involving personal storage and retrieval devices (ipods). Sort of the broadcasting version of web logs (blogs) DVR allows users to record programmes in digital format so that they can be viewed at a more convenient time; allows users to alter time e.g. they can pause movies being broadcast, skip over commercials etc.
15 THE DIGITAL REVOLUTION some observations Products that are able to transcend national borders. Access to content originating outside of national boundaries gaining momentum. Command and control of audiences - a feature of traditional media landscapes - being replaced by liberation of audiences (for example, from inflexible programme schedules). As a consequence, certain concepts that are part of the broadcasting landscape will be eroded. E.g. No more prime time or family hour.
16 THE DIGITAL REVOLUTION some observations Mass adoption of technologies that offer new possibilities: interactivity, interoperability, selectivity of content ability to by-pass conventional networks, standard systems of delivery and many regulatory controls. Boundless opportunities to be heard, read and seen, without mediation particularly via the Internet.
17 THE DIGITAL REVOLUTION some observations Wireless and compression technologies are increasing the portability of media. Youth are extremely attracted to portable multimedia devices Implications present for exposure of children to potentially harmful content. Aggressive marketing of violent, sexual and profane content is a concern
18 PARENTAL REGULATION OF CHILDREN S MEDIA EXPOSURE Inadequate parental supervision of media use single-parent families (40%) children with neither parent at home (17%) PLUS it is extremely difficult to supervise children s use of personal media e.g. handheld video games, ipods and mobile phones
19 POLICY ISSUES, CHALLENGES AND DIRECTIONS Urgency for media literacy, as monitoring of content by media regulators gets more difficult whilst the digital revolution moves at a very fast pace. While literacy campaigns belong in the sphere of education, media regulators must be provide strong support for media literacy initiatives
20 WHAT MEDIA LITERACY TEACHES 4. We all have the capacity to create and produce media content e.g. Time Man of the Year 2006 You for phenomenal growth in media production and sharing on Internet-based social sites such as UTube
21 New and dynamic media framework present challenges that are different from those that previously obtained. Carriage vs content debate. Global experience suggests that the form of delivery will become inconsequential to a large extent. Content issues will remain as the dominant concern Greater empowerment of audiences is now necessary given the pervasive nature of electronic media and easy access to a range of problematic content, especially by children
22 -CABLE INDUSTRY AND ADVERTISING Cable advertising is not intended to counter over the air tv advertising the markets are different; we are targeting local content creators
23 -CABLE INDUSTRY AND ADVERTISING Indeed, the development and rapid spread of cable and satellite television can be attributed at least in part to the market failures inherent in over-the-air, advertiser-supported television. over-the-air, advertiser-supported television. Economists have long debated how advertising should be treated in a rational-choice framework.
24 -CABLE INDUSTRY AND ADVERTISING. To the extent that broadcasters cannot deliver the optimal type and amount of programming to viewers, other firms may develop innovations allowing viewers to purchase more preferred programming directly from providers. Possibly because the broadcast networks forgo advertisingunfriendly program content, the cable channel HBO responds with a deliberate counter-programming niche strategy, explicitly airing programming with darker and more difficult advertisingunfriendly content.
25 -DIGITAL TELEVISION TV broadband roll out is now possible through grant of FLOW licence, we must complement that with digitalterrestrial TV expansion although a TV broadband roll-out was technically possible, the government was prioritizing terrestrial or digital-terrestrial TV expansion. history warned against over-bold predictions of consumer preferences: and this applied to broadband development,
26 -DIGITAL TELEVISION Future of DTT in Doubt By Valerie Milano The cable industry s urgent embrace of digital technology and its aggressive deployment of services such as VOD and SVOD (subscription VOD) is causing some experts to question the global future of digital terrestrial television (DTT). Overall, DTT has gotten off to a disappointing start worldwide, after launches in North America and Europe in November In Europe, satellite remains the primary mode of digital delivery, followed by cable and then terrestrial. Europe s five major TV territories Ñ the U.K., France, Germany, Italy and Spain Ñ ended 2000 with more than 15.7 million digital pay-tv homes combined. Of those countries, the U.K. leads the pack thanks to the efforts of Sky, which has aggressively promoted digital via free set-top box giveaways. Their nearly seven million digital homes represent a 26 percent penetration and their year-to-year growth is an astonishing 129 percent. By comparison, at the end of 2001, Europe reportedly had less than 1.5 million DTT homes.
27 -DIGITAL TELEVISION Future of DTT in Doubt There is concern that terrestrial digital could fail as a delivery system because of the established strength of cable and satellite services and the issue will only become more contentious as the number of digital channels continues to grow, but some governments are already stepping up to the terrestrial plate. In July 2001, France s broadcasting regulator, the Conseil Superieur de l Audiovisuel, announced its promotion of terrestrial digital television, with 22 national commercial channels up for grabs. There will be a total of 33 digital channels, eight of which have been designated as public-service channels, with three reserved for regional and local channels. Hoping to give terrestrial a much-needed boost, France relaxed laws preventing any company from owning more than 49 percent of a national network. Under the new regulations, a company can own 100 percent of a network as long as it doesn t have an average annual audience share of greater than 2.5 percent. And companies cannot bid for channels if more than 20 percent of their capital is held outside the European Union.
28 -DIGITAL TELEVISION CORDEL S NOTE ON THE BENEFIT OF DIGTALISATION STV s will be able to offer customers more channels on their system without having to spend a lot of money upgrading their external infrastructure, rather they would be doing in office upgrading at the Head End. The other benefit is that the digital signal and converter boxes are less susceptible to hacking, so the cable operator will have more control over the service. Currently, most of the channels received by cable is in digital format which is then converted to analogue at the cable Head End and transmitted in that form. It must be noted that the switch over to digital systems by cable operators will be passed on to the customers. Broadcasters stand to benefit the most from digitalisation because most of their customers receive free to air tv through cable, so TV stations will not have to invest in digital boxes, albeit they will need to invest in digital equipment. They will also be able to now provide multiple channels, which will all have to be carried under the must carry rule. They should therefore shoulder some of the public education that is required for the digital switch-over.
29 -DIGITAL TELEVISION Retailers would be required to display signs near analog televisions. This would help ensure that consumers who are thinking of buying an analog television understand that after Feb. 17, 2009, they will need to connect the television to a converterbox, or to cable or satellite service, to receive broadcast television signals. Cable and satellite operators would be required to include information in their bills notifying subscribers about the DTV transition and the digital-to-analog converter-box program. Cable and satellite subscribers will be largely unaffected by the transition, but this requirement will help ensure they understand what is happening.
30 -DIGITAL TELEVISION FCC Confirms Must-Carry Rules after DTV Transition The Federal Communications Commission (FCC) has adopted a Notice of Proposed Rulemaking (NPRM) on proposals to ensure all cable subscribers, including those with analog TV sets, can view must-carry television stations on cable systems after the transition to digital television (DTV) occurs on February 17, By statute, cable operators must ensure that all cable subscribers have the ability to view all must-carry local broadcast stations. To ensure that this statutory requirement is satisfied, the FCC proposes that cable operators must either: (1) carry the signals of all must-carry stations in an analog format to all analog cable subscribers, or (2) for all-digital systems, carry those signals only in digital format, provided that all subscribers have the necessary equipment to view the broadcast content. The FCC also reaffirmed that cable systems must carry high definition broadcast signals in HD format.
31 -SPECTRUM POLICY Political control of spectrum This refelected the broader debate on the ethical and practical dimensions of spectrum utilization and service access Overview: Bringing New Wireless Technology to Market As new wireless technology is developed, its success in the marketplace ultimately depends on appropriate radio spectrum being made available by government regulations. The solution to the current lack of spectrum lies in persuading policy makers in the U.S. and throughout the world to adopt two fundamental reforms. The first is to allow more unlicensed use and the second is to allow more flexibility within licensed use.
32 -SPECTRUM POLICY Other areas of interest are the provision of High Definition Television (HDTV) and broadband services. The latter would enable services such as video/audio via broadband, on-line gaming and telecommuting. Broadband would also facilitate the development of internet in Jamaica. It has been estimated that there are about 62 million broadband subscribers worldwide. However, as in other parts of the world, the full potential of the internet is yet to be tapped in Jamaica and the benefits to be accrued to the Government, the telecommunications industry, businesses and consumers are immeasurable. Other applications include Voice over Internet Protocol (VoIP) which has emerged as a viable, cost effective alternative to traditional telephony, Internet Television, and Wireless Fidelity (WiFi). It is not only the number of technologies which will pose a challenge to the management of the spectrum, but there is also the issue of convergence of technologies and how this will affect the present planning and allocation of frequencies.
33 -SPECTRUM POLICY NEXT STEPS -Consult with industry on the plans for digitalisation or the extent to which they are already digitalised and the standard being used (US or European). Irie FM, for example is a highly ditigised service. -Investigate any government support needed for digitisation for example a waiver on duties to import equipment over a specific period. -Determine policy issues for consumer protection eg A law requiring that only digital enabled tv s be imported and that the sale of analogue boxes carry information that they will need to be used with a digital box.
34 POLICY-MEDIA OWNERSHIP permitted more crossownership of TV stations and newspapers in local markets, relaxed limits on owning two TV stations in a market and for the first time allowed one owner to control three TV stations in a handful of the country s biggest cities. FLOW LICENCE Technological and marketplace developments especially the growth of multichannel programming distributors and the Internet have fundamentally altered the landscape in which the Commission s ownership rules were originally adopted. Consumers nationally and in local markets of all sizes now enjoy access to, and benefit from, a vast array of information, opinion, and entertainment from a wide range of diverse sources, including television and radio stations, nonbroadcast and multichannel outlets, print publications, and the virtually unlimited voices available on the Internet. The Commission should modernize its local ownership rules to reflect these dramatic changes in the media marketplace, and to ensure that local television and radio broadcasters, as well as daily newspapers, are not unfairly hampered in their ability to serve the public by outmoded regulations that limit them and not their competitors.
35 POLICY-MEDIA OWNERSHIP Consolidation of the media industry. Across all countries, there are significant trends towards horizontal and vertical consolidation. In France, the major broadcasters all have production arms. Horizontal consolidation (e.g., across cable companies in the US) seems in addition to generate pressure for vertical consolidation to reap the benefits of scale.
36 POLICY-MEDIA OWNERSHIP Consolidation of the media industry. There is cross media ownership in Jamaica, as evidenced by the RJR, Gleaner and CVM Groups. As with all aggregated vertically integrated media, there is a risk of conflict of interest in cross promotional situations. There are signs that the market will aggregate. Content sharing, media ownership will become more open and the influence of new operators in the marketplace is bound to have an effect.
37 POLICY-MEDIA OWNERSHIP Consolidation of the media industry. Is consolidation an inevitable consequence? Will Jamaica buck the US and Canadian experience? 1) Consolidation In Canada and the U.S., there is only one firm per service territory In the last 10 years, the industry in Canada has gone from about 6 large, roughly equal sized firms, 15 mid-sized firms and 1000 small firms to 4 large/mid-sized firms and about 250 small firms The largest 4 firms constitute about 85-90% of the market This evolution has been driven by the basic economic factor of scale economies
38 COMPETITION Research on ICT and other sectors indicates clearly that increased competition has the greatest positive impact on sectoral efficiency and inno- vation. The experience of much of East Asia suggests that government s insistence on rigorous interfirm competition makes more difference than whether a firm is private, public, foreign, or domestic.
39 COMPETITION With such a number of operators in the Jamaican marketplace, it is not surprising that standards are inconsistent. There seems to be a general lack of acceptance of the media s responsibility to its audience. Commercial imperatives and a culture of narrow competitiveness are diversions from broadcasters attention from basic social obligations.
40 COMPETITION Can we have sustained competition without the ongoing regulatory intervention? How do we avoid inappropriate regulation, which would stifle innovative products and services. Threats to competition? New threats 1. Content -Monopolisation -Piracy (DRM) New threats 2. Platforms -Abuse of market power -Innocent and strategic barriers to entry -Government and regulatory barriers to entry
41 COMPETITION Refer to FLOW licence -Balancing knowledge as a public good and as (personal) intellectual property (the economic design of intellectual property) -the relation of competition to licensing and copyright enforcement, intellectual property issues arising from direct and indirect network externalities, and globalization. patent values and the return on R&D investment,
42 COMPETITION The non linear relationship between competition and quality (Put in diagram showing competition up and quality down) There is a central concern currently for media regulators, at this time of massive increase in outlets, channels, media genres. It was the central theme of recent BCJ consultations. That concern is quality. as far as some people are concerned it is not the business of regulators and governments to concern themselves with quality in broadcasting in the first place. There are three reasons given for this view. A first and to large extent American-influenced reason would be the sacredness of the first amendment to the US constitution guaranteeing freedom of expression. Second, some right wing economists argue that regulators and governments should concern themselves merely with opening markets to true competition and from this quality will flow as night follows day. However, no market is ever perfect, especially given the fact of continuing spectrum scarcity in a country like the UK.
43 COMPETITION The non linear relationship between competition and quality Third, some of our licensees have argued from time to time that, since the Radio Authority was set up to be a light touch regulator it should therefore not concern itself with quality at any detailed level. Commercial radio stations alone know the listener s needs and the regulator could not be expected to have the radio expertise or understanding of the modern listener to make such judgements. If government and regulators know quality and we know what it is then it should be pursued through PBS - public service broadcasting. Fourthly, people who claim they know about quality are no more right than those who claim to know the future of technology. If quality controllers had their way Elvis Presley and Bob Marley would never see the light of day one a hip shaking corrupter of young people and the other an unkempt noise maker.
44 COMPETITION Quality is necessarily a subjective value judgement, inevitably influenced by who is deciding what is and what is not quality. It is a bit like good sex. He who gives it knows about it and that is every man, until you start asking women their opinion. BUT we all agree sex is necessary, which is not the same as saying it must be good. Procreation is not dependent on good sex, but sex simplictor. But we know that at the very least broadcasting cannot be simplicitor, at the very least there must be good technical standards and the service must be compliant with its agreed format and with industry codes of conduct WHAT WE KNOW AS A FACT competition in the media industry does not and will not by itself produce quality; it tends to produce shoulder to shoulder competition in the middle brow of public taste.
45 COMPETITION Quality IS our business Quality must be somebody s business. If industry has no credible quality control then the regulator must establish it the absence of quality is chaos
46 COMPETITION Quality IS our business What IS inappropriate content? The critical distinction that has to be made when evaluating content is TASTE vs HARM. Personal benchmarks of what might be offensive to an individual must take a back seat to an objective question WILL THIS MATERIAL CAUSE HARM? (ESPECIALLY TO CHILDREN)
47 HOW BCJ RULINGS ARE LIKELY TO IMPACT THE FUTURE OF MEDIA AND BUSINESSES OPERATING IN THE NEW MOBILE DIGITAL MEDIA SPACE Issues for Consideration for Policy Makers Convergence is changing the marketplace The alignment and alliances of companies in ICT, broadcasting and general media services Developments in convergence have implications for both infrastructure and content -People s demands and behaviour will drive regulatory approach: they want information faster, digitised, personalized, on demand, and accessible across all platforms and devices (broadcast media, fixed telephony, internet and mobile).
48 HOW BCJ RULINGS ARE LIKELY TO IMPACT THE FUTURE OF MEDIA AND BUSINESSES OPERATING IN THE NEW MOBILE DIGITAL MEDIA SPACE Comparative Review of Content Regulation A McKinsey Report for the Independent Television Commission 1 May 2002 There are now far too many sources of content to regulate in a uniform way across the board. Most regulators are holding to the principle that regulatory controls should be proportionate to the pervasiveness and impact of the service involved. (Cordel one issue is whether is it really realistic and practical for mobiles to be bound by the same rules as public broadcasting?
49 HOW BCJ RULINGS ARE LIKELY TO IMPACT THE FUTURE OF MEDIA AND BUSINESSES OPERATING IN THE NEW MOBILE DIGITAL MEDIA SPACE Comparative Review of Content Regulation A McKinsey Report for the Independent Television Commission 1 May 2002 In pursuit of that principle, regulators continue to maintain active monitoring of editorial standards across traditional mass-market media, notably the leading freeto-air television channels. (Cordel - This will continue as long as they capture the lion s share of media consumption,) Regulators are tending to take a lighter touch approach to new niche or encrypted channels, aimed at an inherently smaller and more self-selecting audience. In the face of ever-increasing content proliferation, there is a perceptible trend around the world towards self-regulation. Content users are being supplied with a growing array of self-regulation tools such as ratings mechanisms and content filters (Cordel and codes of practice covering issues such as adult content, spam, premium rates, assistance for the disabled and elderly and location based services).
50 HOW BCJ RULINGS ARE LIKELY TO IMPACT THE FUTURE OF MEDIA AND BUSINESSES OPERATING IN THE NEW MOBILE DIGITAL MEDIA SPACE Co-regulation and self regulation The Commission encourages self-regulation. However, self-regulation will not always be in the public interest - unless self is given a liberal interpretation to include civil society in the regulatory process. Where the licensed industry fails to regulate itself, the Commission will not resile from its obligation to intervene. It is against this background that the Broadcasting Commission introduced the Children s Code for Programming on January 13, 2003.
51 HOW BCJ RULINGS ARE LIKELY TO IMPACT THE FUTURE OF MEDIA AND BUSINESSES OPERATING IN THE NEW MOBILE DIGITAL MEDIA SPACE Comparative Review of Content Regulation A McKinsey Report for the Independent Television Commission 1 May 2002 The next few years will test the efficacy of a self-regulation regime for multi-channel television and the Internet. Some countries are clearly tempted to pursue a more interventionist approach, and there have been several recent examples of judicial bodies seeking to impose legal liability for content carriers, including in the U.S. In determining the Jamaican approach the BCJ will be guided by the following imperatives: Critical to all of this is stability and predictability when it comes to regulation. The future as it pertains to technology and industries convergingm is far from predictable. In the unpredictable, the regulator s actions must be measured, so that they and the industry have time to get things right in terms of innovation, levels of invest and implementation. Care must be taken, even as we distinguish between media, to ensure that heavily regulated entities do not come under unfair competition from more lightly regulated ones.
52 HOW BCJ RULINGS ARE LIKELY TO IMPACT THE FUTURE OF MEDIA AND BUSINESSES OPERATING IN THE NEW MOBILE DIGITAL MEDIA SPACE In the unpredictable, the regulator s actions must be measured, so that they and the industry have time to get things right in terms of innovation, levels of invest and implementation. Intellectual rights -What are the implications for rights protection when technologies are converging? The complexity of the rights associated with content and the way they are currently licensed, seems out of sync with rapid technological developments and the new content markets being created, eg a new mobile TV genre. Collecting societies are being accused of operating as national monopolies of being inflexible in the way they license content, resulting in higher costs, delays and uncertainty in launching new music services (Vodafone CEO). There is a call for greater transparency in the contents rights market, open access to the rights for those businesses which are interested in them and more effective appeal mechanisms, to enable and promote proper commercial negotiations. (Vodafone CEO).
53 What is the outlook for the industry from here on? Given the dynamism of the electronic media sector, any predictive statement about the industry would need to be based on empirical data. Completion of a forecast of the 2010 media landscape by the Broadcasting Commission is slated for completion by March Certainly, broadcasting legislation that is sensitive to the landscape is one of the areas in which change is likely to be witnessed. Proposals for legislative reform would result from the comprehensive policy review by the Commission that is to be carried out in the 2007/8 operational year.
54 FINALE What has Pavarotti got to do with a talk on business professionalism
55 FINALE What has Pavarotti got to do with a talk on business professionalism? NOTHING!!!
56 Feedback Contact: tel (toll-free): CABLE website:
57 Where to Get More Information CABLE (22253) THANK YOU
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