The French government announced the prospect of an audiovisual reform bill, notably as part of the upcoming transposition of the Audiovisual Media Services Directive (AVMSD). It is against this backdrop that the Competition Authority was called upon by the National Assembly’s Cultural Affairs and Education Commission to provide its analysis of the impact that the digital revolution is having on audiovisual services, and particularly on the economic and competition dimensions. The Competition Authority sought Arcep’s opinion to help shed light on these issues. With the former’s agreement, today Arcep is publishing this opinion, in the hope of making a useful contribution to the legislative work being performed.
Audiovisual services in the throes of dramatic change
Arcep began by underscoring the tremendous and ongoing changes in how people in France access their audiovisual services:
- Growing use of time-shifted services: catch-up TV, video on demand, unlawful video sites;
- Use of multiple devices: televisions, computers, tablets, smartphones;
- Popularity of TV over IP (triple play bundles sold by ISPs) compared to DTT (digital terrestrial TV) services.
On the supply side, over-the-top (OTT) pure players which deliver their services chiefly over the internet (e.g. Netflix) have become key figures in the audiovisual landscape. Television networks are also finding growth outlets in their online video products.
In its opinion, Arcep stressed one major development: the emergence of new intermediaries, i.e. devices – a topic on which Arcep published a detailed report in February entitled, “Are devices the weak link in achieving an open internet?”, after more than a year of work and consultations on the issue. Whether smart TVs, new multimedia streaming devices such as Chromecast, Apple TV or Roku, or virtual voice assistants seeking to become veritable all-purpose remotes for the home, these new intermediaries could, in future, have a heavy influence over the content that users watch. Arcep called attention to the issues raised by this growing influence, in terms of competition and freedom of choice, and ultimately pluralism and universal access.
Arcep’s three proposals
Arcep believes, first, that DTT channels should be given enough freedom to adapt to the tremendous changes taking place in the sector. It seems crucial to ensure that this applicable legal and regulatory framework not impede the players’ ability to adapt their choice of broadcasting/distribution methods to French users’ preferences (first proposal). Here, Arcep suggest relaxing DTT coverage obligations, giving channels greater choice in the technology or technologies they want to use for broadcasting across the country.
Arcep points out that the plethora of technological broadcasting options raises the issue of the universality of French users’ access to content. If this universality is currently guaranteed on the internet, thanks to net neutrality, and on DTT in combination with satellite broadcasting for the networks in question, this is not necessarily so with TV over IP, which today is the most widely used. Arcep also proposed better guaranteeing users’ access to DTT television channels in triple play bundles (second proposal). The goal is to prevent TV viewers from once again becoming the potential victims of business negotiations between the networks and ISPs.
ISPs are not, however, the only intermediaries concerned, and the growing influence of devices (smart TVs, voice assistants, etc.) must also be anticipated. Service providers could encounter difficulties in accessing the users of these devices, difficulties made all the more likely by the fact that certain device suppliers can have a significant market power, and/or be vertically integrated with audiovisual services that compete either directly or indirectly with television channels. But devices are not subject to open internet obligations which, in the telecoms universe, guarantee users’ freedom to access the content and applications of their choice, thanks to net neutrality and related European regulations.
On this matter, Arcep refers back to its report, “Are devices the weak link in achieving an open internet?” which identified several impediments created as much by smartphones as smart TVs or voice assistants. In light of this work, Arcep has concluded that regulatory action aimed at these new device industry players must be considered immediately. This should be horizontal regulation (so not fragmented) covering every device, in the same spirit as applying the principle of an open internet to telecoms networks (third proposal).
Finally, Arcep looks at convergence and dual exclusivity practices that can exist between service providers and ISPs. As the Authority already had occasion to express, these practices run the risk of distorting competition over internet access provision, while limiting consumers’ access to audiovisual content. However, because these practices are not currently widespread, Arcep is confining itself here to appealing for vigilance from the Competition Authority and government authorities.
Associated documents
- Arcep opinion to the Competition Authority (in French)
- Report: " Smartphones, tablets, voice assistants: are devices the weak link in achieving an open internet?"