Contemporary Trends in Media Regulation Dr Monika Metykova Department of Media Northumbria University Newcastle, UK Email:monika.metykova@northumbria.ac.uk Technological developments ‘Wouldn’t it be great if the fridge could call you at work or in your car to let you know you were out of milk and tell you to buy some on the way home?’ (John Patrick of IBM on Transmission Control Protocol/Internet Protocol use in fridges; World Internet Conference June 1996) Technology in Policy Debates Throughout the world, information and communication technologies are generating a new industrial revolution already as significant and far-reaching as those of the past. It is a revolution based on information, itself the expression of human knowledge. Technology now enables us to process, store, retrieve and communicate information in whatever form it may take – oral, written or visual – unconstrained by distance, time and volume. (Chapter 1 of the Bangemann Report that outlines recommendations to the European Council on infrastructures in the sphere of information of 1994) Global Information Society Visions of the future: lpolitical – GIS key to prosperity, optimized use of digital technologies secures growth; digital nervous system for government, education, healthcare, culture and commerce lcommercial – global marketplace consisting of numerous electronic shopping mall. All consumers can be reached individually via their network connections lsocial – virtual village green with open networks for individuals to communicate and share ideas on an informal basis. A place to access free information, learn, a place for scientists and academics to exchange and develop knowledge. Global Information Infrastructure 1995 – US Vice President Al Gore – build the GII using these five principles as foundation: lencouraging private sector investment lpromoting competition lproviding open access to the network for all information providers and users lcreating a flexible regulatory environment that can keep pace with rapid technological and market changes lensuring universal service. Vision of the European Commission 1993 European Commission white paper on growth, competitiveness and employment: lstimulate the use of information technologies via strategic projects with a European dimension lprovide basic pan-European services such as ISDN and broadband lcreate an appropriate framework to address issues such as privacy, security and intellectual property ldevelop training on new technologies limprove industrial and technological performance. Changes in consumption patterns, markets, services Some examples from the UK: lUK television broadcasters generated revenue of £11.1bn in 2009, a fall of £49m (-0.4%). Growing subscription revenues – up 7.5% to £4.6bn – failed to offset declining net advertising revenue (NAR), which fell by 9.6% to £3.1bn. lThe BBC’s estimated spending on TV services grew by 1.5% to £2.7bn. lThe commercial public service broadcasters (PSBs) – ITV1 and the Channel 3 licensees, GMTV1, Channel 4, Five and S4C – jointly saw the steepest decline in advertising revenue during 2009, down 14% to £1.9bn. lSince 2004, the BBC’s share of total TV revenue has remained broadly flat, at around 24%, while subscriptions’ share grew by seven percentage points to 41%. lSince 2004, advertising’s share fell by six percentage points to 28%. Technological Convergence – Bundling of Services ‘Pure bundling’ occurs when products or services are sold as a fixed package and cannot be bought separately (e.g. a car is an example of a pure bundle because it is unlikely that you would buy it in individual parts to build the car yourself). ‘Mixed bundling’ is when products are available as a part of a bundle or individually, but the package of items together is sold at a discounted price (e.g. Home contents and building insurance is often sold as a discounted package but each can be bought individually). ‘Tied bundling’ is when one product can only be purchased with another, but that other product is available to buy separately (e.g. shoes and shoelaces). All three types can be found in the communications sector, although the most common are mixed bundles and tied bundles. Bundled Communication Services – UK data lAround half of all UK households now buy two or more of their communications services from one supplier in a bundle, up from less than a third five years ago. Triple-play voice, broadband and TV bundles account for a third of the total. lSeventeen per cent of households took triple-play services in Q1 2010, compared to just 3% five years ago. lBut many people buy services on a stand-alone basis. Only half of all households (53%) that have a landline, fixed broadband service and pay-TV currently purchase these services as a triple-play bundle. lSeventy per cent of people with a communications service bundle said that the main reason for taking a bundle was because it was cheaper. Almost half (49%) of those with a bundle also said that it was more convenient to deal with one supplier. Free Market vs. State Intervention McChesney argues “all media systems are the result of explicit government policies, subsidies, grants of rights and regulations. ... Indeed, to have anything close to competitive markets in media requires extensive government regulation in the form of ownership limits and myriad other policies” (2003: 126). Similarly, McKenna (2000) stresses that deregulation does not indicate that regulatory pro-competitive provisions are not incorporated in broadcasting regulation. The US 1996 Telecommunications Act Changed the restriction on the ownership of radio stations (prior to the 1996 Act a single company could own 28 stations nationally and 4 in a single community) by completely removing the restriction on the number of national radio stations owned by a single firm and increasing the number of those owned in a community to 8. Clear Channel now owns nearly 1,200 stations. Self-Regulation The Codex of Czech Television Čl. 1 Divák – občan na prvním místě Čl. 2 Zvláštní pozornost dětskému divákovi Čl. 3 Poplatník televizního poplatku –otevřený vztah Čl. 4 Tvůrce – základní předpoklad úspěchu Čl. 5 Péče o informace ve zpravodajstvía aktuální publicistice Čl. 6 Diskusní pořady a pluralita Čl. 7 Otázky náboženství a etiky Čl. 8 Umělecké pořady a vkus Čl. 9 Jazykový projev Čl. 10 Vzdělávací a osvětové pořady Čl. 11 Zábavní pořady Čl. 12 Sportovní vysílání Čl. 13 Zákaz diskriminace The Codex - continued Čl. 14 Presumpce neviny Čl. 15 Respekt k soukromí Čl. 16 Pravidla při natáčení Čl. 17 Zobrazování Čl. 18 Živé vysílání Čl. 19 Kritické situace Čl. 20 Charitativní a dobročinná činnost Čl. 21 Komerční části programu Čl. 22 Střet zájmů Čl. 23 Česká televize jako instituce Čl. 24 Péče o archivní fond Čl. 25 Základní pravidla hospodaření Čl. 26 Žaloby a správní řízení Self-regulation The Czech Council for Advertising Convergence Convergence does not only blur the distinction among various forms of communication but also among services. In this respect Cooper (2003) makes an important point: advocates of convergence tend to equate all media while in fact distinct products are involved that are oriented at different geographic markets – both in terms of the commercial marketplace and the forum for democratic discourse. To make this issue more concrete we can look at the example of fibre optic cable, which “offers the potential for the delivery to individual households of television and radio, networked computer facilities, interactive services such as home banking, shopping and video on demand, combined with telecommunications (telephone and fax) facilities. Indeed, the ultimate potential of digitalisation, allowing the transfer of all such material down a single line, seems almost boundless” (Feintuck 1999: 23). Issues for Regulators “Does the existence of different regulatory authorities responsible for different aspects of telecommunications, media and IT [information technologies] activities offer a workable structure for regulatory supervision in the light of convergence or does convergence require a reassessment of regulatory responsibilities at a national or international level, and if so, in which areas?” (Drucker and Gumpert 2000: 48) Competition Law cost advantages associated with size will dictate that an industry should be an oligopoly unless some form of market intervention or Government regulation prevents the firms from growing to their most efficient size. If no such intervention takes place, existing firms in the industry may create barriers to entry where natural ones do not exist so that the industry will be dominated by a handful of large firms only because they are successful in preventing the entry of new firms. But substantial economies of scale in any industry will, in themselves, act as a natural barrier to entry in that any new firms will usually be smaller than established firms and so they will be at a cost disadvantage (Doyle, 2002: 9). Preventing Media Concentration “Competition policy has traditionally worked on the assumption that the efficiency of markets depends directly on their competitive structure and, especially, on the extent of seller concentration. So competition policy may sometimes involve ‘structural’ interventions – i.e. attempts to bring about market structures which are less concentrated – on the assumption that this will ensure good behaviour by competing firms to promote improved industrial performance” (Doyle, 2002: 168). Limits on media ownership are a typical example of such a structural intervention. Ownership Regulation – Czech Broadcasting 231/2001 Sb. ZÁKON ze dne 17. května 2001 o provozování rozhlasového a televizního vysílání a o změně dalších zákonů ČÁST ŠESTÁ ZAJIŠTĚNÍ PLURALITY INFORMACÍ V ROZHLASOVÉM VYSÍLÁNÍ A TELEVIZNÍM VYSÍLÁNÍ § 55 Zajištění plurality informací v celoplošném analogovém rozhlasovém a televizním vysílání (1) Jedna právnická osoba nebo jedna fyzická osoba nesmí být držitelem více než jedné licence k celoplošnému analogovému televiznímu vysílání. (2) Jedna právnická osoba nebo jedna fyzická osoba nesmí být držitelem více než jedné licence k celoplošnému analogovému rozhlasovému vysílání. (3) Provozovatel celoplošného analogového rozhlasového vysílání se nesmí majetkově podílet na podnikání jiného provozovatele celoplošného analogového rozhlasového vysílání. (4) Provozovatel celoplošného analogového televizního vysílání se nesmí majetkově podílet na podnikání jiného provozovatele celoplošného analogového televizního vysílání. Behavioural Regulation A different type of intervention – behavioural one – is becoming more frequent, this involves regulation that encourages monopolistic firms into behaviour in the public interest. Media Economics lmedia generate two commodities, content and audiences thus they represent a so-called dual-product market lmedia industry characterized by economies of scale, “economies of scale are said to exist in any industry where marginal costs are lower than average costs. When the cost of providing an extra unit of a good falls as the scale of output expands, then economies of scale are present” (Doyle 2002: 13) leconomies of scope are also commonly characteristic of media enterprises, these are economies at the disposal of firms “large enough to engage efficiently in multi-product production and associated large scale distribution, advertising and purchasing” (Lipsey and Chrystal as quoted in Doyle, 2002: 14).