27 October 2006 – AER SUBMISSION ON THE REVIEW OF THE RECOMMENDATION ON RELEVANT PRODUCT AND SERVICE MARKETS WITHIN THE ELECTRONIC COMMUNICATIONS SECTOR SUSCEPTIBLE TO EX-ANTE REGULATION IN ACCORDANCE WITH DIRECTIVE 2002/21/EC
The Association of European Radios (AER) is a Europe-wide trade-body representing private and commercial radio broadcasters in France, Germany, Italy, the UK, Greece, Spain, the Netherlands, Denmark, Finland, Sweden, Switzerland and Romania. AER represents the interests of over 4.500 private and commercial radio operators.
Since its creation in 1992, AER has actively contributed to the Commission’s work on electronic communications and services (Telecom Package) and spectrum policy initiatives and thanks the Commission for its invitation to comment on the review of the EU Regulatory Framework for Electronic Communications and Services.
AER welcomes this review taking place in the framework of the i2010 Initiative as an opportunity to remind the European Commission of the central role played by radio broadcasting in Europe and to alert DG Information Society and Media to the adverse effects that some of its policies could have on the future of the radio industry in Europe.
There are currently approximately 10.000 privately and commercially-funded radio stations broadcasting news, music, services and entertainment programmes to over 456 million listeners across the 25 EU Member States. Most are SMEs broadcasting to local and regional communities and offering free-to-air programmes. These are programmes which public service broadcasters, TV or even telecom operators do not provide or provide only against a fee. These radio stations are financed by advertising revenues which are currently their only source of income.
Radio – and indeed commercially funded radio – offers services of general interest and serves the public in particular at local and regional level. AER would like to point out that when all other technology fails, radio still functions (in emergency situations for example). At the moment, radio faces difficult and sometimes even adverse conditions which include:
- the absence in some Member States of adequate regulatory frameworks – and indeed of digital radio strategies – at national level for digital radio;
- the swift development of digital technologies which has led to a diversity of sometimes conflicting digital strategies by radio broadcasters;
- uncertainty regarding advertising revenues in the long term and thus sufficient means to invest in new technologies;
- the privileged position of public service radio broadcasters in terms of access to funds allowing public radio to be present on all analogue and digital platforms if it so wishes;
- the privileged position of public service radio broadcasters with regard to access to digital licences;
- the privileged position of public service radio broadcasters with regard to access to analogue and digital spectrum;
- difficult bottleneck situations when platform owners/gatekeepers decide over spectrum and retransmission of programmes;
- finally and most importantly, competition for spectrum between players who are not in a position to compete on equal terms: for example, rich telecom operators and less wealthy commercial radio broadcasters, in particular the small and medium-sized broadcasters representing the vast majority of radio stations across the EU.
AER extensively commented on the Commission’s proposals (AER submission dated November 13th, 2000) and has always supported the liberalisation of the electronic communications sector as a means to achieve the Lisbon Agenda. We also participated in the “Call for Input” in early 2006.
AER regrets, however, that virtually none of the concerns of the radio industry has been taken into account and believes that the discouraging situation faced by much of the private radio broadcasting industry is, in part, a direct result of the Commission’s policies for electronic communications and its intentions regarding spectrum.
Free-to-air radio broadcasting is at risk and this surely cannot be the intention of the European Commission.
We therefore trust that the specificity of radio broadcasting will find its way into the Commission’s review, future proposals and more generally into the i2010 Initiative.
The European Commission Framework Directive and the EU-Commission Recommendation on Relevant Markets are key for the Member States´ analysis of the relevant product and services markets of the electronic communications sector, by listing markets where there is a lack of competition and where ex-ante regulation is still necessary.
One of the markets needing sector specific ex-ante regulation is Market number 18: “Broadcasting transmission services, to deliver broadcast content to end users”.
AER underlines the urgent need for ex-ante regulation of this market. At the same time AER regrets that many Member States have not yet finalized their market analyses. In Germany, for example, the market definition will not be concluded before the end of 2006. As a result, commercial radio broadcasters had to conclude interim contracts for Hertzian tariffs (“UKWEntgelte”) with the infrastructure provider T-Systems with little legal security.
In our view there is no question but that the market should be included. We have repeatedly said that the move to digital will not end scarcity of spectrum for broadcasting in general and radio broadcasting in particular in the mid or even long term. In most Member States terrestrial transmission is the most important transmission platform for radio which cannot be easily replaced by other infrastructures and which has limited capacities even when digitized. In Germany for example, 79 % of radio broadcasting is Hertzian/terrestrial.
AER therefore believes that markets must be defined in more detail. In most of the Member States, radio transmission via satellite or cable is not a substitute for terrestrial radio transmission. For broadcasters, access to the networks and transmission of the programmes are essential. More and more they are facing monopolies controlling both access and conditions for transmission (fees). Therefore, ex-ante regulation is indispensable, especially with regard to transmission tariffs. Current experiences show that prices in the digital world can be prohibitive, because they are increasing and at the same time there is no digital perspective for broadcasters because of a lack of frequencies.
AER is of course available to elaborate on this position if this would prove helpful for the European Commission.
Notes: Brussels-based AER (the Association of European Radios) represents the interests of 14 national private and commercial radio associations in 11 EU Member States, Switzerland and Romania.
The AER web site provides further information at www.aereurope.org