Competition Issues in Television and Broadcasting

1 Competition Issues in Television and Broadcasting 2013 The OECD Global Forum on Competition discussed Competition Issues in Television and Broadcasting in February 2013. This document includes an executive summary of that debate and the documents of the meeting: a background note by the Secretariat as well as written submissions by Bulgaria, Chile, Colombia, Congo, Croatia, Egypt, the European Union ,France, Greece, India, Indonesia, Ireland, Israel, Japan, Korea, Latvia, Lithuania, Mexico, the Netherlands, Peru, the Philippines, Poland, Romania, the Russian Federation, Singapore, South Africa, Spain, Chinese Taipei, Tunisia, Turkey, Ukraine, the United Kingdom, the United States, Venezuela , Zambia and BIAC. A note by Prof. Allan Fels and a detailed summary of the discussion are also included. Digital Economy (2012) Market Definition (2012) 2011 Latin American Competition Forum session: Triple/Quadruple Play in Telecoms Media Mergers (2003) Competition and Regulation Issues in Telecommunications (2001) Competition and Regulation in Broadcasting in the Light of Convergence (1998) New technologies and the dynamic effects of convergence are changing the way consumers access audio-visual content.

2 This adds considerable uncertainty to business planning, in particular concerning future demand, and implies the need to ensure a cautious, and technology neutral approach in the design of regulation and the application of Competition law. At the same time, the application of regulation and Competition law becomes more complex as rapid technological changes and increasing demand for triple and quadruple play services complicate the process of delineating relevant markets and increase risks of overlapping regulatory jurisdictions. While the emergence of new products and services facilitated by convergence has lowered barriers to entry and rendered markets more competitive, participants to the forum provided many examples of restricted access to the market. The debate also revealed that Competition authorities are increasingly aware of new Competition challenges arising in the sector and have therefore become more active in launching policy interventions.

3 In some cases these also involved a consideration of public interest criteria other than Competition concerns raising questions regarding division of competences between NCAs and sectoral authorities, as well as the model for their co-operation. Unclassified DAF/COMP/GF(2013)13 Organisation de Coop ration et de D veloppement conomiques Organisation for Economic Co-operation and Development 28-Oct-2013 _____English - Or. English DIRECTORATE FOR FINANCIAL AND ENTERPRISE AFFAIRS Competition COMMITTEE Global Forum on Competition Competition Issues IN Television AND Broadcasting JT03347396 Complete document available on OLIS in its original format This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

4 DAF/COMP/GF(2013)13 Unclassified English - Or. EnglishCancels & replaces the same document of 09 October 2013 DAF/COMP/GF(2013)13 2 FOREWORD This document comprises proceedings in the original languages of a Roundtable on Competition Issues in Television and Broadcasting held by the Global Forum on Competition in February 2013. It is published under the responsibility of the Secretary General of the OECD to bring information on this topic to the attention of a wider audience. This compilation is one of a series of publications entitled " Competition Policy Roundtables". PR FACE Ce document rassemble la documentation dans la langue d'origine dans laquelle elle a t soumise, relative une table ronde sur la t l vision et la radiodiffusion qui s'est tenue en f vrier 2013 dans le cadre du Forum mondial sur la concurrence. Il est publi sous la responsabilit du Secr taire g n ral de l'OCDE, afin de porter la connaissance d'un large public les l ments d'information qui ont t r unis cette occasion.

5 Cette compilation fait partie de la s rie intitul e "Les tables rondes sur la politique de la concurrence". Visit our Internet Site -- Consultez notre site Internet DAF/COMP/GF(2013)13 3 TABLE OF CONTENTS EXECUTIVE SUMMARY .. 5 BACKGROUND NOTE .. 9 CONTRIBUTIONS FROM DELEGATIONS Bulgaria .. 45 Chile .. 49 Colombia .. 61 Congo (Version Fran aise) .. 67 Congo (English version) .. 71 Croatia .. 75 Egypt .. 83 European Union .. 91 France (Version fran aise) .. 99 France (English version) .. 125 Greece .. 149 India .. 157 Indonesia .. 169 Ireland .. 175 Israel .. 189 Japan .. 195 Korea .. 203 Latvia .. 207 Lithuania .. 213 Mexico .. 219 Netherlands .. 229 Peru .. 235 Philippines .. 241 Poland .. 245 Romania .. 251 Russian Federation .. 261 Singapore .. 269 South Africa .. 275 Spain .. 281 Chinese Taipei .. 287 Tunisia .. 293 Turkey .. 301 Ukraine.

6 307 United Kingdom .. 311 United States .. 327 Venezuela (Version fran aise) .. 331 Venezuela (English version) .. 337 Zambia .. 343 BIAC .. 357 DAF/COMP/GF(2013)13 4 EXPERT CONTRIBUTION Allan Fels Competition Issues in Broadcasting and Internet Content: Navigating the Unknown and the Unknowable.. 367 Radiodiffusion et contenu internet : Navigation dans l inconnu et dans l inconnaissable .. 383 SUMMARY OF DISCUSSION .. 401 ** SYNTH SE .. 415 NOTE DE R F RENCE .. 419 COMPTE RENDU DE LA DISCUSSION .. 457 DAF/COMP/GF(2013)13 5 EXECUTIVE SUMMARY By the Secretariat Considering the discussion at the roundtable, the background paper as well as the delegates and experts written submissions, several key points emerge: (1) The Television and Broadcasting sector has been undergoing significant technological and structural changes, which have given consumers access to a great variety of communications and media services.

7 Convergence is changing the way in which consumers use communication services and consume content, as it is available on new platforms and on various wireless portable devices. At the same time, technological change has impacted on regulation and conditions of Competition . The penetration of new technologies and the dynamic effects of convergence are changing the way that consumers access and view audiovisual content. Nowadays, it can be provided via multiple platforms: analogue or digital terrestrial broadcasts, satellite, cable or Internet Protocol (IP) and Over-the-Top (OTT) Television . A fundamental change affecting traditional Broadcasting stems from the migration of networks to IP data transmission. Combined with significant broadband penetration, increases in bandwidth and the proliferation of digital devices, this has enabled different devices to use the same networks and has facilitated the ability of the communication industry to offer new and bundled services.

8 This allows consumers to receive and decode video services across a variety of fixed and mobile devices. Technological developments affect the conditions of Competition as they alter: the range and quality of services; the underlying costs; the extent of barriers to entry (new technologies provide new means by which the market is contested); the ability of customers to switch suppliers; and pricing mechanisms (technological developments allow for provision of pay per view services). Therefore, digitisation generally reduces barriers to entry. One implication of convergence is the need to ensure a technology neutral approach in the design of regulation. Furthermore, NCAs have to be aware of network neutrality Issues and focus on potential forms of network traffic discrimination that may be anticompetitive in specific circumstances: introduction of a fast lane for some services, degradation in the quality of some services or the method chosen to count video consumption towards data cap.

9 Certain countries (Chile, the Netherlands and Slovenia) have developed regulations that reflect a stricter approach towards respecting network neutrality. It can affect Competition in TV markets, which is found in a number of cases: KT/Samsung in Korea (2012), Free/Google in France (2013) or Comcast/NBCU in the United States (2009). Further, the substantial competitive pressure coming from online video distributors (OVD) is reflected in certain decisions of some NCAs: Comcast/NBCU (2009), Project Kangaroo (2009) and Newscorp/BSkyB (2012). Therefore, in the future, NCAs should pay a great deal of attention to discrimination in video markets, especially regarding OVDs. DAF/COMP/GF(2013)13 6 Convergence has added further uncertainty to business planning, in particular concerning future demand, the deployment of new technologies, the choice of a profitable business model or potential sources of competitive products.

10 These uncertainties also create dilemmas for Competition regulators. On the one hand, when market circumstances are difficult to assess, intervention may rule out an otherwise desirable market development. On the other hand, the potential for innovation means that it is crucial to keep opportunities open for future Competition to develop. For regulators this represents a reason to be cautious, because regulatory ignorance is considerable in the presence of uncertainty generated by the current forms of convergence. However, some regulatory risks are unavoidable and a policy of non-intervention can lead to the rapid emergence of new forms of market power. Professor Fels suggested that the paradigm of sequential innovation might serve as a source of guidance in shaping the regulatory policy, with a high priority going to ensuring that new generations of supply can displace the existing generation.