1. Policy & Regulatory Challenges of convergence: Mobile, Digital, IP
Dr. Thomas Hart
Regulatory Expert
EU-China Information Society Project

2. OUTLINE I i2010 Information Society – The umbrella
II Electronic communications (telecom) policy
III Audiovisual policy
IV Applying the Framework to Convergence

3. OUTLINE I i2010 Information Society – The umbrella
II Electronic communications (telecom) policy
III Audiovisual policy
IV Applying the Framework to Convergence

4. A comprehensive five-year strategy to boost the digital economy, by fostering growth and jobs in the Information Society and Media industries
A key component of the EU’s overall strategy to promote growth, jobs and global competitiveness

5. i2010: Three Priorities 1. A Single European Information Space
2. Innovation and investment in research
3. Inclusion, better public services and quality of life
The information society is at a turning point: recent technological progress has been huge and ICT are entering a phase of mass deployment which may fundamentally change the way in which we work, live and interact. Rich media content is becoming available in new, diverse formats and can be delivered independent of location or time, personalised to individual citizens’ preferences or requirements. In technical terms, communication networks, media, content, services and devices are undergoing digital convergence. Improvements in networks, combined with new compression techniques, create new and faster distribution channels and trigger new content formats and services (e.g. Voice over IP, Web TV, on-line music).
New content creation, services and business models are driving growth and jobs. For example, Western European online content markets are expected to triple by 2008 (with the consumer part growing tenfold)[3]. These developments are expected to multiply across the sector, today already accounting for 8% of EU GDP. However, the impact of digital convergence will be felt globally and will lead to increased worldwide competition. If Europe is to benefit fully from its economic potential, a proactive policy approach is needed to stimulate favourable market developments and the promotion of the knowledge society (e.g. lifelong learning, creativity and innovation), consumer protection and a healthy and safe European information society.
The creation of a Single European Information Space needs to address at the outset four main challenges posed by digital convergence:
- speed: faster broadband in Europe services to deliver rich content such as high definition video;
- rich content: increased legal and economic certainty to encourage new services and on-line content;
- interoperability: enhancing devices and platforms that “talk to one another” and services that are portable from platform to platform;
- security: making internet safer from fraudsters, harmful content and technology failures to increase trust amongst investors and consumers.
Objective 1: A Single European Information Space offering affordable and secure high bandwidth communications, rich and diverse content and digital services.
Digital convergence calls for a consistent system of rules for information society and media. In this area, the internal market is governed by a wide set of rules covering e.g. audiovisual media, digital television, on-line trading, intellectual property rights and support measures for the creation and circulation of European content. Some regulatory elements (e.g. the e-Commerce directive) are recent and reflect digital convergence. Others, notably the Television without Frontiers Directive are due for review. The Commission undertakes to examine the rules affecting the digital economy to make their interplay more coherent and oriented to economic and technological realities. Concretely the Commission will:
- by end 2005, propose a revision of the ‘Television without Frontiers’ directive to modernise the rules on audiovisual media services;
- by 2007, the Commission will have analysed the community acquis affecting information society and media services and will bring forward proposals for change where necessary.
Complementary policies will promote fast and efficient implementation of the updated frameworks and support will continue for the creation and circulation of European content and knowledge [4].
Regulation of electronic communications has been transformed in the last decade. The European electronic communications regulatory framework, in force since 2003, is an example of best practice. Where it has been implemented consistently and effectively it has opened up competition, encouraging lower prices and investment. Regulation must keep pace with technological and market developments. Therefore, in the 2006 review of the framework, the Commission will thoroughly examine its principles and mode of implementation, especially where bottlenecks are delaying the provision of faster, more innovative and competitive broadband services .
New high speed wireless applications are driving demand for radio spectrum [5]. Policy aims to facilitate spectrum access across the EU through market mechanisms. This will be assisted by the planned switching off of analogue terrestrial television by The Commission will consolidate its proposals by defining a strategy for efficient spectrum management in 2005 to be implemented in the 2006 review of the electronic communications framework.
Digital convergence requires devices, platforms and services to interoperate . The Commission intends to use all its instruments to foster technologies that communicate, through research, promotion of open standards, support for stakeholder dialogue and, where needed, mandatory instruments. Such a policy mix was the foundation of Europe’s mobile telephony success. Under i2010, the Commission will also seek to establish a comprehensive approach for effective and interoperable digital rights management .
Trustworthy , secure and reliable ICT are crucial for a wide take up of converging digital services. During 2006 the Commission will propose a Strategy for a Secure Information Society to combine and update the instruments available, including raising awareness of the need for self-protection, vigilance and monitoring of threats, rapid and effective response to attacks and system failures. Support will be given to targeted research to ‘design-in’ security and to deployment measures that test solutions for key issues such as identity management. Revision of regulation will be considered where necessary, for example in protection of privacy, electronic signature or discouraging illegal and harmful content.
In summary, the i2010 agenda on the Single European Information Space will accelerate the economic pay-off from digital convergence by the following measures:
Review the electronic communications regulatory framework (2006), including defining an efficient spectrum management strategy (2005) Create a consistent internal market framework for information society and media services by modernising the legal framework for audio-visual services, starting with a Commission proposal in 2005 for revising the Television Without Frontiers Directive analysing and making any necessary adaptations to the community acquis affecting information society and media services (2007) actively promote fast and efficient implementation of the existing and updated acquis governing the information society and media services Continued support for the creation and circulation of European content Define and implement a strategy for a secure European Information Society (2006) Identify and promote targeted actions on interoperability, particularly digital rights management (2006/2007) |

6. Tools for Implementation
Stakeholders
Dialogue
MS Cooperation
Reporting
Review and revision of the regulatory frameworks
High level
events
i2010 events
MODINIS
ICT FUND - CIP
FP 6 and 7
Others (SF)
Specific discussion

7. Review and Revision of Regulatory Frameworks
 Communications Policy:
e-Communications Regulatory Framework
 Audiovisual Policy:
“TV Without Frontiers” Directive

8. OUTLINE I i2010 Information Society – The umbrella
II Electronic communications (telecom) policy
III Audiovisual policy
IV Applying the Framework to Convergence

9. Communications Networks and associated facilities
Electronic Communications Scope is all networks and services – independent of infrastructure
Content Services Outside scope of EU framework (e.g. broadcast content, e-commerce services)
Communications Services (e.g. telephone, fax, )
Communications Networks
(e.g. fixed, mobile, satellite, cable TV, powerline systems, networks used for radio and television broadcasting)
and associated facilities

10. Regulatory Approach to the Existing Framework
Identify markets
Product markets (e.g. call termination)
Geographical markets (e.g. local, national, global)
See whether there are dominant operators on those markets (Significant Market Power)
Minimal and linked to degree of competition
Flexible BUT harmonised at a European level
Technologically neutral
Regulate only where an operator has a dominant position in an identified market where competition is not effective
Rely increasingly on competition law

11. Some Key Characteristics of the Existing Framework
Licensing – simplified market entry for communications service providers
“Light touch” regulation – linked to degree of competition
Identify markets
Identify firms with Significant Market Power (SMP)
Access (“Interconnection”)
Obligations on SMP operators
Independence of regulators

12. Proposals for Change Spectrum management Streamlining market reviews
Consolidating the internal market
Strengthening consumer protection and user rights
Improving security
Removing outdated provisions
Investment and innovation
How to deal with new, emerging services, e.g. IPTV
Structural separation
Regulatory models

13. OUTLINE I i2010 Information Society – The umbrella
II Electronic communications (telecom) policy
III Audiovisual policy
IV Applying the Framework to Convergence

14. Modernising the “TV without Frontiers” Directive
Existing EU rules: limited to traditional TV; created the conditions necessary for free movement of TV broadcasts within the EU
Minimum standards applicable to all MS  MS apply their national broadcast legislation, within the limits of the EU framework
Why change? Convergence of technologies and services
E.g. traditional (linear) TV plus Internet TV, mobile TV, video on demand, peer to peer exchanges, new advertising methods, etc.
Need to broaden the scope of the “TV without Frontiers” Directive to include existing novelties
Yet, at the same time, need to ensure that new services which are not the same as traditional broadcasting services, are not held up by heavy broadcasting rules

15. OUTLINE I i2010 Information Society – The umbrella
II Electronic communications (telecom) policy
III Audiovisual policy
IV Applying the Framework to Convergence

16. Is IPTV a relevant development?
2010: 12 per cent of all tv viewers worldwide will use IPTV (ABI Research)
Global revenue in 2010: US-Dollar 10 bn (Informa Telecoms & Media)
other research expects 60 Mn subscribers, US 27 bn revenue in 2010 (iSuppli)
The European market for IPTV will double in 2007
54 IPTV services across Europe, 19 of which are in operation in the five European markets of the UK, France, Italy, Germany, and Spain.
Screen Digest forecasts that subscriptions to IPTV services across Europe will almost double from 2.9m in 2006 to 5.6m in 2007, with subscription revenues from IPTV increasing from €470m to over €1bn.
Source:
“IPTV could be as disruptive to the core cable industry structure as voice over IP has been or is being to our core voice business.”

17. The top five IPTV operators in Europe accounted for 60 per cent of the total IPTV market in the five countries at the end of 2006

18. Regulation: Distinction necessary
Internet TV: content is transmitted across the public internet to the private internet access pipes into the homes (stream or on-demand)
IPTV: content usually sourced directly onto the private access pipes coming to the home. Content originates at the head ends and takes private pipes all the way.

19. IPTV – What is it?
It’s a “replacement concept”, not a complementary technology
IPTV protocol enables the creation of a single shared-use high-speed transport infrastructure
IPTV transport and service infrastructure can deliver digital television, data, voice signals, connectivity services, on-demand-P2P exchanges  IP will replace all others
the proposed IP suite and multiplexing processes can be used to deliver “broadband” (multiple services with multiple signal types) at a fraction of the cost of extending the current time divided multiplex (TDM) telephone network and/or the hybrid fiber coax (HFC) TV and channel slotted satellite/radio networks.
Massive amounts of consumer bandwidth, IP packet switching, and routing all together provide a much more flexible service infrastructure. This could even be used to eliminate the current expensive and inefficient service overlays for each revenue stream.
Source:
Much more detail:
Overview over distinction to Internet TV:

20. IPTV – What is it?
“IPTV is particularly good for the established media content production business, including Hollywood and all of the major television distribution networks on satellite and cable. IPTV allows these organizations to have total control of the content distributed and to greatly reduce opportunities for theft and piracy, which last year cost the cable industry $4.76 billion in unrealized revenue.”
Source: Businessweeek - "The real meaning of IPTV"
IPTV will offer essentially the same product and programming offered by digital cable and satellite providers. Similar on-demand and pay per view products probably with some extra integration with voice, and different pricing.

21. Basic Components of an IPTV system
Headend:
Client billing system
Middleware servers
CA/DRM server
Encoders for broadcast TV
VOD Servers for VOD
Client:
middleware display engine (browser or JVM)
CA/DRM client (software smartcard equivalent)
only general regulation, no IPTV-specific regulations

22. e.g. IPTV: BT Vision (UK): http://www.btvision.bt.com/

23. Internet-TV - what is it?
Based on existing and ubiquitous Internet technology: model is open to any rights holder, as it is based on the same publishing model that exists on the Web: anyone can create an endpoint and publish that on a global basis.
open to any rights holder no matter whether this is an individual creating a video for a very small audience or a traditional publisher that offers linear cable channels
Relatively device independent
Very strongly based on existing Internet user experience and hence will be deeply integrated into the Internet user behaviour
Internet Television promises access to many new products and much broader range of programming that we have been accustomed to retail video world and dramatically more control, as to when and where and how users can access that video/tv programming."

24. e.g. Internet-TV: Atomfilms www.atomfilms.com

25. e.g. User- generated Content: youtube.com

26. e.g. online Video Portals: Youku.com

27. e.g. online Video Portals: Baidu.com/ 56.com

28. Internet-TV: Regulation
“Internet-TV” does not exist from a regulatory perspective – it is merely another website
same regulation as for other Internet services applies
“light” regulation: no specific restrictions, no license requirements
general provisions on copyright, youth protection, hate speech, etc.
non-specific provisions apply fully (civil code, antitrust, criminal law)
country-specific regulations apply (e.g. age verification system, imprint requirement)

29. IPTV: Regulation
IPTV providers are primarily telecoms companies offering DSL lines  communications regulation applies in principle (market definition, SMP, ONP, interconnection, price reg. ...)
Content regulation: as for web services, not as for broadcasting services!

30. Broadcasting vs. IPTV different regulatory treatment
strong regulation of broadcasting because of high opinion-building power of tv programmes
soft regulation of IPTV because of fragmented audiences of all IP-services  little influence on public opinion
but IPTV networks and cable networks are able to carry the same content and service
And Cable TV Networks actually do the same …

31. The Mobile Challenge
A “New Mobile Horizon”?
The New Wireless World looks certain to provide an ever-increasing number of different offerings, rather than any single and uniformed service carried by any single kind of network.
Mobile telephony is replacing fixed voice services, due to decreased prices and the convenience of one handset, one address-book, one voic , etc. However, this feature is not easy to replicate when it comes to more advanced and “capacity-hungry” services.
Pricing strategies are critical; unlimited access at flat rates might not be sustainable where there is a capacity limit. Network build-outs can prove increasingly costly, and investments difficult to recover.
Pretty much identical to what they said about the “broadband challenge”

32. Mobile TV EU Commercial services in: Italy and Finland
trials in: Austria, Belgium, the Czech Republic, Denmark, Germany, France, Hungary, Ireland, Latvia, Lithuania, Luxembourg, The Netherlands, Poland, Portugal, Slovenia, Spain, Sweden, UK
69 million global subscribers are forecast by 2009, generating revenues of 4-5 billion Euro.
Example Projects supported by EU:
MELISA: Sports fans get closer to the action – in real time
INSTINCT: Bringing handheld mobile digital video broadcasting to reality
MAMBO: Digital video broadcasting over the Net. Wireless access network

33. A Light Touch on Mobile TV
Mobile TV can be broadcast over different types of networks and the regulatory models vary considerably across the EU
light touch regulatory approach favoured by EU Commission
Currently no plans for public service “must carry” obligations

34. EU’s Three Pillar Mobile TV Strategy
joint approach to the licensing of mobile TV  Authorisation procedures will be developed
making available spectrum for these services, possibly in the UHF frequency band  WRC approved of UHF use through non-licensed services
promoting the use of DVB-H as the mobile TV standard for Europe  DVB-H listed as official EU standard

35. Standards as regulators’ key task
Standardisation and Interoperability at the core of regulatory attention, but is an EU-endorsed standard required? DVB-H, MediaFLO, DMB, DAB-IP?
European Mobile Broadcasting Council was established mid-2006 with the aim of industry self-regulation, but did not come up with a standard
July 2007: Commission has adopted a strategy, urging Member States and industry to push mobile tv development and deployment. The DVB-H standards is recommended and will be included in the list of endorsed standards (compulsory “support and encouragement” by members)
Some member states keep supporting various standards: e.g. licenses for DMB and DVB-H in Germany
18 July The Commission adopted a Communication on Strengthening the Internal Market for Mobile TV.  COM(2007) final. 

36. Regulatory Environment is not fully consistent
“Despite a general European move towards deregulation, there is a disparity between the regulation of old-world TV platforms (terrestrial, cable, satellite) and new delivery technologies like IPTV (sometimes also referred to as DSL TV).
IPTV is widely regulated under telecoms law, despite providing a full-channel pay television service in every way equivalent to those on cable.
... there was a feeling that this could impact the way in which adult content and advertising content was regulated.”
Source:
Interactive content and convergence: Implications for the information society.
A Study for the European Commission (DG Information Society and Media),
2006

37. Modernisation of the “TV without Frontiers” Directive  “Audiovisual Media Services Without Frontiers”
Regulatory disparity requires revision of regulation
New rules for audiovisual services to be based on content, rather than mode of delivery
Distinguish between traditional broadcast or linear (‘push’) services and ‘on-demand’ (‘pull’) services
‘On-demand’ services to be subject only to a basic set of minimum principles
E.g. to protect minors and prevent incitement to racial hatred
Simplify and liberalise rules on inserting advertising in TV programmes (limits to hourly quantity remain), simplify product placement
Member States will be given 24 months to convert the new rules into national law, so that they fully apply in 2009.

38. For More Information….
e-Communications:Tomorrow’s Framework
EU Audiovisual and Media Policies:
Mobile Broadcasting: