Media and Identity in Contemporary Europe: Consequences of global convergence

Media and Identity in Contemporary Europe Consequences of Global Convergence Richard Collins

intellect

Media and Identity in Contemporary Europe Consequences of Global Convergence

Richard Collins

First Published in Great Britain in Paperback in 2002 by Intellect Books, PO Box 862, Bristol BS99 1DE, UK First Published in USA in 2002 by Intellect Books, ISBS, 5824 N.E. Hassalo St, Portland, Oregon 97213-3644, USA Copyright © 2002 Richard Collins All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without written permission.

Copy Editor: Cover Design: Typesetting:

Peter Young Luke Collins Macstyle Ltd, Scarborough, N. Yorkshire

A catalogue record for this book is available from the British Library Electronic ISBN 1-84150-866-7 / ISBN 1-84150-044-5

Contents 1

Introduction

1

Europe 2

Challenges and Opportunities. Broadcasting in Multi-national States

3

Television, Identity and Citizenship in the European Union

25

4

Locked in a Mortal Embrace. The European Union Audiovisual Policies of the UK and France

43

7

Public Service Broadcasting 5

Public Service Broadcasting and Freedom

65

6

Two Types of Freedom. Broadcasting Organisation and Policy on both sides of the Atlantic

81

7

Public Service and the Media Economy. European Trends in the late 1990s

95

8

Supper with the Devil. A case study in public/private collaboration in broadcasting. The genesis of Eurosport

107

Policy and Regulation 9

Cultural Development in an Open Economy. Trading in Culture: the role of Language

117

10

Paradigm Regained? Where to in Media and Communications Regulation

135

11

Back to the Future. Digital Television and Convergence in the UK

147

Bibliography

165

III

The Author Richard Collins, is Professor of Media Studies at the Open University. Formerly, he was Deputy Director and Head of Education at the British Film Institute. He has worked as a teacher and researcher in leading departments of media and communication studies: notably at the Polytechnic of Central London (now the University of Westminster), Goldsmiths’ College University of London and at the London School of Economics and Political Science. His tenure of fellowships in Australia, Canada, South Africa and the USA, his experiences as research director of the media and communications programme at one of the UK’s leading ‘think tanks,’ the Institute for Public Policy Studies (IPPR), and as advisor on broadcasting and convergence issues to Don Cruickshank, when he was Director General of Telecommunications at Oftel, give these essays strongly international and practical policy perspectives. Richard Collins’ books include: Culture Communication And National Identity: The Case Of Canadian Television. (1990b) University of Toronto Press. Toronto. p. 388. (Nominated for the Smiley Prize of the Canadian Political Science Association 1991, reprinted 1994). New Media, New Policies. [With Cristina Murroni]. (1996) Polity Press. Cambridge. p. 243. From Satellite to Single Market: The Europeanisation Of Television 1982–1992. (1998) LSE Books/Routledge. London. pp. xiv and 297.

IV

1

Introduction

The social sciences have never given the media so much attention. In geography, sociology, economics, social psychology and in political science the media are increasingly taken as an object for study, not least because globalisation is conditional upon communication between locations, identities, trading partners and communities that were hitherto separate. By definition, if people and places are connected – as is axiomatic in globalisation – they are communicating. And if they are not communicating, they are not connected. Formerly, communication was slow, expensive and of limited practicability. New technologies have changed all this. To take two convenient examples: satellite communication has abolished the customary interdependence between cost and distance in communication; and the Internet is paradigmatic of both the convergence of hitherto distinct media and, increasingly, of the decoupling of duration and price of communication. This is not to assert that location is unimportant and that everything and everyone is globalised, or to deny the robust continuing existence of the recognisably distinct and different media of radio, television, film, book and newspaper publishing, etc. But their importance has declined. Less and less does location define the limits of markets and possibilities of co-operative working relationships. The new media are growing faster than the old and reshaping the time honoured relationships, identities and structures of power that grew around the old media. Hence the prominence of the two new buzzwords, ‘Globalisation’ and ‘Convergence.’ These terms signify the re-orientation and new foci of concern of contemporary social sciences and media studies. ‘Globalisation’ and ‘Convergence’ both signal themes of integration. Once, media studies could address separate media – film, television, telecommunications, the press – each in a distinct national context. Now, the national context has given way – through globalisation – to a wider international connectedness (in Europe, particularly interestingly, by Europeans’ choice to create a trans-national economic, political and – perhaps – cultural community) and the media themselves are increasingly hybridised, substitutable and interdependent – through convergence. None of this is unprecedented. Steinberg (1969), for example, showed how rapidly printing changed the diffusion of knowledge across Europe and accelerated the integration of markets (not least in printed books themselves). Marvin (1988) develops this theme in her well-named ‘When old technologies were new.’ But, putatively at least, the scale and pace of change has itself changed. That is why the phenomena and processes that we identify as ‘Globalisation’ and ‘Convergence’ demand attention. But how much? ‘How much?’ is the question that lies behind much of what follows. ‘Convergence’ and ‘Globalisation’ are more than contingently connected. For media and communication are central to globalisation for two reasons. 1

Media and Identity in Contemporary Europe First, there can be no division of labour without communication between those who divide their labour. And the integration and interdependence of economies, which constitute one of the principle themes of globalisation, is a re-structuring of established patterns of labour division. The cost, functionality and accessibility of means to produce, store, process, transmit and receive information have all changed dramatically. ‘Moore’s Law,’ (which asserts that the price of a given quantity of computing power halves every eighteen months), is paradigmatic of these changes. Now it’s cheaper and easier to communicate globally than ever before. Indeed, new communication technologies have decoupled price and distance. Globalisation is intimately interdependent on global communication systems. As communicative networks grow, their utility increases exponentially as ‘Metcalfe’s law’ states (see Chapter 11 for a discussion of ‘Metcalfe’s Law’). The growth of global systems of communicative interconnection is thus self-reinforcing. Second, information has itself become an increasingly important traded commodity – the media and its contents are themselves traded internationally more and more. They constitute one of the components of the increasingly ‘weightless’ international economy (see, inter alia, Coyle, 1997 and Quah, 1996). Here too there is a fundamental ‘law’ at work. Because information is non-rival, it is not exhausted by consumption (you read this work and it remains available for others to read), development of cheap and effective reprographic technologies (technological change again), tends to extend and integrate markets across time and space. This trend is characteristic of the ‘weightless’ economy but is more marked for information than for other elements of the ‘weightless’ economy. Again, there is nothing particularly new about this. Writing is a technique and printing a technology which permit partial realisation of this intrinsic potentiality of information. Through these technologies information is captured, recorded and made available for consumption through time. As written and, a fortiori, printed works were transported from place to place so the same information was made available for consumption through space. But what is new is the acceleration and intensification of the realisation of this inherent potentiality of the information economy. Electronic communication – telegraphy, telephony, radio, television and the contemporary convergence of all these formerly distinct media of communication into interactive multimedia – have further contributed to realisation of the inherent potentiality of information to be consumed by many across time and space at zero marginal cost. But though these integrative trends are so salient – both in the academic literature of media and social sciences and in the daily experience of all of us – they are realised and experienced in highly situated ways. The past lies heavily – but weighs differently – everywhere. Realisation of the potential of modern media and communications to call into existence a seamless, integrated, global communicative community has been, and continues to be, conditional not only on technological change but also on the context, historical, political and cultural, in which media and communication operate. It is not only that the past shapes and situates the present but also the extent to which the future is realisable. 2

Introduction My evaluations of policies, institutions and informing ideologies centre on two themes: the role and future of one of the most distinctive features of media and communications in Europe, and of what Louis Hartz (1964) called ‘the daughters of Europe’ – public service broadcasting (Chapters 5–8). And on the power and limits of the nascent integrative regulatory paradigm for media and communications in the era of convergence – competition policy (Chapters 10 and 11). In these there is a close interdependence of themes. I argue for both public service and the market. The striking consequences of the surprisingly recent introduction of competition in European broadcasting has, overall, benefitted European consumers of broadcasting services. But, I argue, a ‘one size fits all’ roll-out of competition based policy and regulation is not sufficient to secure the public’s interests. Because the economics of information are different from those of other goods and services, different institutional arrangements are required to realise these interests. Public Service Broadcasting potentially (and to some significant extent actually) provides a good solution to the problems of securing the public interest in broadcasting (and in the new media post-convergence). The question is how to balance and reconcile the different institutional structures and traditions represented by competition policy and authorities on one hand and public service broadcasters and broadcasting on the other. I attempt to address these conceptual problems in Chapters 5, 6, 7, 10 and 11 and offer Chapter 8 as an account of an intriguing instance of the messy, concrete, empirical entanglement of principles and institutions that academic discourse customarily rigorously distinguishes. The concerns which I’ve outlined above are explored in three principle domains. First, the relationship between media and communications and between multi-national and multi-linguistic societies – notably the European Union but also Canada. These have been the two chief instances on which I’ve reflected and examples from these inform empirically much of what follows. Second, the contemporary position of public service broadcasting in a radically changed policy and institutional environment. And third, the regulatory and policy consequences of ‘convergence.’ Though each chapter foregrounds one of these areas of concern, each echoes through other chapters. For each chapter, distinctive though its focus may be, addresses the inescapable contemporary connectedness of what hitherto was once comfortably separate. A seamless, integrated, global communicative community? How so? If (big if!) the history of media and communications is a history of technological and institutional change directed to the realisation of an intrinsic potentiality in symbolic systems to offer instantaneous communication to any and all through time and space at zero marginal cost, then a seamless, integrated, global communicative community is the end point, the telos, of that history. If assent can be given to this teleological historical explanation which asserts, at least for heuristic purposes, that technology is no longer a major constraint then it follows that other factors chiefly shape and constrain the realisation of this potentiality. Technological change has been sufficiently important for there to be widespread, if not universal, acknowledgement of globalisation. The ‘removal’ of that variable from the equation throws into sharper view, and greater relative importance, the ‘other factors’ – 3

Media and Identity in Contemporary Europe economic, institutional/political and cultural/linguistic – which constrain and shape the situated and incomplete realisation of the potential for a seamless, integrated, global communicative community. Time for an obvious caveat. Doubtless, future writers will regard what now seems to be the leading edge of media and communication technology in the year 2000 as impossibly constraining. Media history is full of accounts of the gleeful optimism that attended the introduction of old technologies when they were new. See, for example, some of the comments at the birth of the telephone in de Sola Poole, 1983a. What of these ‘other factors’? The economic is an obvious one. The exploration of the distinctive economic characteristics of information constitutes an underlying theme throughout these essays (see, in particular, Chapters 7 and 9). But I should acknowledge something of also what’s not here. In these studies, I pay scant attention to the problem of the (half) empty glass. Though I recognise (who could not?) that different parts of the world and different classes within any particular society dispose of very different levels of resources, my interest has rather been focused on the societies, and the kinds of societies, in which I’ve lived. My examples, and the problems which I’ve addressed, are drawn from the developed world (and mostly from the North Atlantic world). Where I allow the North Atlantic ‘have nots’ to enter these essays it’s mostly under the comforting rubric of reductions in communicative inequality. I have preferred to take comfort in the affordability of the ‘quality’ press, the striking increases in penetration of telephony to the home and the rapid diffusion of Internet connectivity rather than reflect on the information poor and increased social stratification around cleavages marked by access to media and communications. I tend to look, in short, at the half full rather than half empty glass. See my discussions of the international context for audio-visual production in Canada (Chapter 9) as a case in point. These essays are rooted in a political economy approach to the media. But, as the foregoing remarks about preferring to see half full rather than half empty glasses suggests, my kind of political economy is not the usual kind. Most often, a political economy approach is seen to be synonymous with Marxism. Rather as the Frankfurt School sailed under the colours of ‘Critical Theory’ instead of Marxism so too is the political economy school of media studies seen as Marxism conveniently conforming to an acceptable academic dress code. It would be foolish to deny the importance of Marxism in my own formation. Evidence of my adherence to one of its many quixotic forms over much of the seventies and eighties is on the public record. And these essays continue, I think, to testify to my sense of the importance of this tradition. It’s one well worth arguing with. But the political economy of the media is more important and more interesting than an approach to the subject simply informed by Marxism could be. It’s not only Marxists who believe that resources are scarce and that the allocation and use of these resources both express and reproduce social power. It is not only left-inclined political economists who see media and communications as a locus of power of unprecedented importance – one which requires the expression of social power through politics and law to countervail commercial power – and vice versa! 4

Introduction Clearly, as the last provocative sentence suggests, my work bears the marks of its formation in more than one matrix – of Marxism certainly but no less clearly in the works of the ‘right’: in Daniel Bell (1976) and the Peacock Report (Peacock 1986) for example. My pluralism goes with the deep habits of a more generally sceptical and empirical turn of mind. Accordingly, the ‘other factors’ that are most salient in these essays are ones which, I believe, have often been neglected in the mainstream of media studies political economy: the contradictory forces of language and culture, institutions and agency. My discussions of language and culture below are framed in the context of the media and communications of the multi-national, and multi-linguistic, ‘states’ of Canada and the European Union. Chapters 2, 3, 4, and 9 are particularly relevant. I reach two major conclusions. First, language is of primary economic importance as a factor that shapes the economies of global media and communications. In the ‘weightless’ economy of a decoupling of the price of communication from time and distance of communication, it is language (and culture) which limit the integration of media and other information markets. But, although integration and globalisation are constrained by this factor, nonetheless, globalisation is taking place, not least because there are very high returns to economies of scale in media businesses because of the remarkable disparity (also a phenomenon that is conditional on technological change) between first and second and subsequent copy costs in this domain. And in this process of integration of markets, there are very powerful economic advantages for English speaking producers. Second, shared language and culture are rather less important for the cohesion of political communities than the dominant frame of reference, rooted in nationalist assumptions about the necessary congruence of polity and culture, has customarily supposed. Indeed, the media are rather less important than media studies has customarily proposed. A pendant discussion follows from the question that obviously arises if these heterodox conclusions are accepted. If that is so, why then is so much importance given in policy and regulation to trying to achieve the putatively necessary congruence between culture (and language) and polity? I find an answer in history (and economic interest) rooting my explanation of the differences in French and British European policy (Chapter 4) in the formation and national ideologies of these two major societies and cases in point. Language and culture are important and so too are institution and agency. As will by now be clear, I’m not a technological or economic determinist. What people do, and what they do through political institutions, matters very much. Hence the importance of media regulation, the self conscious attempt of political communities to shape their communicative fates. Even in an era of globalisation this counts for a lot (but not as much, as I show in Chapter 11, as regulators and policy makers customarily wish). We move, therefore, out of political economy and into media policy. Policy studies are fuzzily defined but I take policy to be the self-conscious social shaping reflexively undertaken by sovereign political communities to realise their values. Policy studies almost inevitably have a normative character whether explicitly or implicitly. Their normativeness testifies to their authors’ sense, whether well or ill founded, recognised or unacknowledged, that politics, policies and institutions can make a difference – that agency matters. I’ve sought to show throughout these essays (a theme that’s 5

Media and Identity in Contemporary Europe particularly evident in the chapters constituting parts two and three of this work – Chapters 5 to 11) that though people do not make history on the terms of their own choosing nonetheless they make – and can re-make – their own histories. Hence the distinctive sceptical and empirical approach represented in these studies. Sceptical, in my interrogation of established theoretical wisdoms; empirical in my attachment to context and the obdurate specificities of the actual. Reviewing these essays, published over a decade, it becomes clear quite how attached I have become to some very specific contexts and landmarks. There is, I now recognise, a familiar corpus of referents – the favourite quotations and examples that knit together the different themes explored in each chapter. I have made minor editorial changes for publication here – largely to reduce repetitions and redundancies (that favourite quotation from the Hahn Report wasn’t needed quite so much!) and to harmonise bibliographical references. But I’ve tried to resist the temptation to exercise the advantages of 20:20 hindsight! All this enquiry and reflection has taken place in a specific situated context – as does all such activity. It would be superfluous and simply banal to remind the reader of the obvious – but I’ll do it anyway. I’m a white middle aged male citizen of one of the most deeply rooted of modern political and language communities and this gives my work a distinctive character. Less obvious but no less important has been the remarkable good fortune which I’ve enjoyed in my professional life. First, employment at institutions which successively became leading academic centres of media and communication research in the UK; second, the opportunities which sustained periods of living outside the UK (but always within the global anglophone community) gave me to work with a less insistent presence of at least some of the endemic ills (‘toil, envy, want, the patron and the jail’) which Dr Johnson defined as the scholar’s lot; and third, again by chance, the opportunities which IPPR (the Institute for Public Policy Research) and Oftel gave me to see the policy community from inside and to try on the seductive dress of a policy and public intellectual. And of course the most significant sustaining context of all has been that of my friends, family and colleagues – in most of whom I’ve had remarkable luck. To you, I owe more than I can ever tell – my thanks to you all.

6

2

Challenges and Opportunities: Broadcasting in Multi-National States

Introduction Europeans have often looked to Canada for a foretaste of the future and for field-tested solutions to broadcasting policy problems new to Europe but familiar in Canada. So much has the relevance of Canada’s experience for Europe been taken for granted that the cycle of changes to European television in recent times has often been described as a process of ‘Canadianisation’ (see Juneau, 1984; Gerlach, 1988; Raboy, 1994). Whereas ‘Canadianisation’ has customarily been discussed as a structural process (marked by the proliferation of channels, developing competition, fragmentation of the audience, and the erosion of cultural sovereignty), the changes signalled by the term ‘Canadianisation’ were nowhere more apparent than in the successful ‘reinvention’ of television drama in the United Kingdom which followed the breaking of the BBC’s monopoly by the introduction of commercial television in 1955. In the late 1950s the Canadian Sydney Newman – who had worked both in NBC in the USA and for CBC in Canada and who later became Commissioner of the National Film Board of Canada – became successively the head of independent (that is commercial) television drama at ABC in 1958 and then of the BBC’s television drama department in 1963 (see Shubik, 1975, for an insider’s account of Newman’s legacy). Newman’s appointment to ITV’s Armchair Theatre in 1958 – and the cohort of Canadians, such as Ted Kotcheff and Alvin Rakoff, he brought in his wake – was rightly described as the ‘most important event in ITV drama – indeed in TV drama as a whole’ in the official history of Independent Television in Britain (Sendall, 1982 p. 338). What is less well-known is that this Canadian influence had a specifically Quebecois inflection. The first episode of the most important British television soap opera Coronation Street (which has occupied an important place in ITV’s schedules since its first transmission in 1960) included a controversial scene showing one of the leading characters mending his bicycle in his living room – an everyday situation in working class houses (which lacked the garages, sheds or even the large kitchens of middle and upper class homes). This scene, because it made visible on British television screens a working class experience hitherto hidden, sent ripples of scandalised fascination through British society. Did the exotic English underclass really do such extraordinary things? It took a Canadian producer, Harry Elton, working for a Canadian Head of Drama, Sydney Newman, to show British television viewers, accustomed to relays from London theatres and a diet of the classics of English drama, that it did. The Quebecois connection comes through La famille Plouffe,1 the celebrated series written by Roger Lemelin, which began as a radio series on Radio Canada and ran on Radio Canada’s television service (and in an English version on CBC beginning a year 7

Media and Identity in Contemporary Europe later) from 1953 to 1958. Coronation Street’s transgressive representation of exotic working class life was foreshadowed in La Famille Plouffe which showed in the first episode – just as in Coronation Street – an everyday act transposed to a location unfamiliar to middle class experience. Instead of the bicycle repair shown in Coronation Street the first episode of La Famille Plouffe showed Theophile Plouffe shaving in his kitchen – in a home which lacked both a bathroom and constant hot water. Both series brought into the collective consciousness of their respective societies the day-to-day experience of social groups hitherto excluded from the collective realm of symbolic representation. La Famille Plouffe (which was still being screened in Canada the year Newman moved from Canada to England) was clearly a striking and influential precursor of Coronation Street. However, there are now signs that ‘Canadianisation’ is giving way to a reverse flow of ‘Europeanisation’ and that Canada is looking to European viewpoints to inform its contemporary debates about television regulation. The UK’s regulatory innovations in permitting cable television networks to offer telecommunication services, network competition, and the European Union’s liberalisation of entry to television markets have all attracted the attention of Canadian regulators. But an augmenting Canadian interest in European policy has recently been notably sharpened by the CRTC’s (Canadian Radio-television and Telecommunications Commission) attention to the licensing of new specialist television services at a time when it must consider a new wave of services from the United States, delivered by ‘death star’ direct to home satellites. Rather than Europe customarily looking to Canada for insights into new developments in broadcasting policy it appears that we are now experiencing a rare instance of Canada looking to Europe. Rather as advocates of ‘second stations’ (see Peers, 1979 pp. 89–90) to compete against CBC’s television services argued from Britain’s establishment of a commercial television service in 1954 to compete against the BBC (ITV was the first commercial television service in Europe) and, before that, since members of the Aird Commission in 1929 studied broadcasting in France, Germany and the United Kingdom (as well as the United States) in search of models for Canada. Is recent European experience relevant to Canada and Quebec? Certainly the parallels between Canada and Europe are now more striking than they were in 1929. Western Europe, since ratification of the Treaty on European Union in 1993, usually known as the Maastricht Treaty, has become a transnational polyglot sovereign entity bound into a Continental free trade zone – not unlike Canada.2 Both Canada and the European Union, now the official title of the entity formerly known as the European Community, are confronted with the task of mediating between the internationalisation of the media, arising from integration into a Continental free trade area and new technologies which have dramatically weakened the ability of national governments to exercise communication sovereignty, and the desire to use the media, and notably television, to bind together political units made up of communities of different languages and cultures.

The European Context The savage excesses of European nationalism which culminated in the second world war costing millions of European (and thousands of Canadian) lives, provoked a sober 8

Challenges and Opportunities: Broadcasting in Multi-National States determination in the survivors to create a European order which would make impossible such orgies of mass slaughter. East of the Elbe a trans-national order of, nominally, ‘proletarian internationalism’ was established. This has now collapsed. West of the Elbe the European Movement created two enduring institutional monuments to achieve its aim of realising ‘the universal desire of all ordinary men and women to live their lives in peace, to bring up their children in freedom, and to reap the just fruits of their day’s work’ (European Movement, 1948 p. viii). These were the Council of Europe and the European Union. The Council of Europe was, and is, based on intergovernmental treaties between sovereign states, whereas the European Union, deriving from a banal bureaucratic initiative – the European Coal and Steel Community – which was created to so firmly integrate the coal and steel industries of Western Europe that it would be impossible for a member to wage war against another member – has developed as a genuinely supra-national organisation where member states’ sovereignty was surrendered and shared. Thus all of Western Europe (and several other adjacent states such as Turkey and Hungary) is united by formal intergovernmental treaty in a commitment to the European Declaration of Human Rights and submission to the judgements of the European Court of Justice which has powers to require governments to implement these rights and, with the exception of Switzerland and Norway, is also united in an economic and political union of fifteen distinct societies under one political roof – the European Union. From these two institutional children of the forties have developed Europe’s transnational broadcasting regulation in the eighties and the consequential elevation to prominence in Western Europe of a question (always central to Canadian broadcasting policy): What is the role of broadcasting in making or unmaking sentiments of collective identity? The ‘Canadian’ question became important in Europe in the 1980s because technological change disturbed a long standing equilibrium whereby, with minor exceptions, states had respected each others’ broadcasting sovereignty. The threat and sometimes the reality of cross-frontier broadcasting was able to erode longestablished national public service broadcasting monopolies because realisation of European citizens’ rights to access to information seemed to demand access to transfrontier broadcasting and because the European Community established a single market in broadcasting.

Technological and Political Convergence Technological change, which brought satellite broadcasting to Europe in 1982, ran alongside a developing sharing of sovereignty in Europe. Since the late nineteen-forties West Europeans had slowly ceded more and more national authority to pan-European institutions but in the nineteen-eighties this process accelerated after the first directly elected European Parliament took office in 1979 and a strongly federalist President of the Commission of the European Communities, Jacques Delors, was appointed. At this time European Unionists pressed hard for progress towards the ‘ever closer union’ prescribed in the Treaty of Rome. Notably by seeking to augment the European Community’s political dimension through alignment of the culture and consciousness of Europeans in a collective cultural identity which, in a classically nationalist 9

Media and Identity in Contemporary Europe aetiology, was believed to be necessary to the creation of a robust collective European political identity. Of course, moves to foster European integration were highly controversial and, although crowned with formal success in the Maastricht Treaty on Political Union of 1992, citizens of the European Community are still profoundly divided on European union. In 1994 they split 60:40 in favour of ‘a more integrated Europe as envisaged under Maastricht’ and against ‘a looser arrangement between independent nation states.’ However the overall majority in favour of integration hid majorities in Denmark, Germany and the United Kingdom for ‘a looser arrangement’ (Financial Times, 1.6.1994 p. 4). Whatever the preferences of Europeans, the fundamental question is whether multinational political and economic unities, such as the European Union and Canada, will hold together best under loose arrangements (which recognise the ‘distinct societies’ of which they are made up) or under conditions where the distinctiveness of the separate societies is reduced and a pooled new identity developed. On this there is no consensus among theoreticians and no unequivocal weight of evidence. Proponents of a ‘nationalist’ integration who argue that polity and culture must be congruent if political institutions are to be robust and legitimate (Gellner, 1983) are opposed by proponents of a ‘functionalist’ model of integration (Mitrany, 1975) who see workable collective political and economic arrangements as more likely to emerge if cultural differences are respected than if culture is harmonised. The distinctive historical experiences of the Member States of the European Union have, of course, predisposed them to one side or the other of this debate. The United Kingdom, a multi-national state with significant differences in the civil society of its component parts (the different educational and legal systems of England and Scotland, the quasi-official status of the Welsh language, the separate parliaments and assemblies are all striking examples of this distinctive formation) contrasts with France’s Jacobin coherence and consistency (see Weber, 1976, for a compelling account of how France was unified and how peasants became Frenchmen through the influence of the French state exercised via the education system, military service and the modernisation of communications). No less striking is the opposition represented by Denmark and Germany. Germany has combined devolution of important powers (including those relating to culture and broadcasting) to its provinces (the Länder) with a federal commitment to sinking German national identity and sovereignty in a ‘post national’ pan-European unit – the European Community. Denmark has vigorously asserted national cultural prerogatives and refused the European Community’s cultural initiatives – so much so that Danish Members of the European Parliament have referred to the Parliament’s Committee on Youth, Culture, Education, the Media and Sport as the ‘illegal committee’!

Canada and Europe: Common Themes Canada and the European Union face comparable challenges in broadcasting policy (e.g. in balancing the role of public service broadcasting and competition, in meeting the challenge of satellite television, in the use of broadcasting to foster social cohesion in a multi-national state) as they do in other domains. Andre Peloquin3 noted the 10

Challenges and Opportunities: Broadcasting in Multi-National States ‘Canadian’ character of the contemporary European arrangements when he observed, after attending a conference in London on Britain and Europe, that when the British spoke of Brussels they sounded like the Quebecois speaking of Ottawa! In Europe as in Canada, the relationship between ‘federal’ authorities in Ottawa and Brussels and ‘provincial’ authorities in Dublin, London, Paris and Madrid, in Edmonton, Fredericton, Quebec and Regina, has yet to be settled. And on both sides of the Atlantic we have a common problem of determining how political and economic structures are to relate in the large trans-national economic unities we both inhabit: ALENA/NAFTA in North America and the European Single Market in Western Europe. Are political structures to be hard and uniform across the whole of the shared economic area, as we have become accustomed in nation-states, or are they to be soft and pluralistic? And what should be the relationship between the cultural and political domains in the pannational unities in which we now, with varying degrees of acceptance, live? Does a single market require a strong centralised political authority, must a stable and legitimate political authority, as nationalist theory prescribes, be isomorphic with the culture of the citizens who inhabit it? Neither in Europe nor in Canada is there clear evidence on the nature of the relationship between political and cultural identity and on the role of television. Whereas, as Desaulniers (1985) and others have argued, television played a vital role in the resurgence of Quebecois nationalism and in shaping the powerful sentiments of collective cultural identity experienced by contemporary Quebecois, in English Canada sentiments of national identity do not appear to be strongly linked to television viewing (Collins, 1990a). Moreover, in Western Europe a gigantic experiment in economic and political integration has been thus far successfully undertaken but without that integration being supported by a shared symbolic culture. Clearly judgements on what type of broadcasting regulation is to be established in any location, and what goals regulators should pursue, will depend on what answers are given to such fundamental questions about the relationship between television viewing, cultural identity and citizenship. Although there is no consensus on the answers to these questions, some common assumptions have underpinned the broadcasting policies of both Canada and the European Union. Both sides of the Atlantic have embraced two determinisms. The first, technological determinism, avers that social and cultural relationships are necessarily shaped by technological change and, specifically, that satellite television will create transnational publics and cultures. The second, cultural determinism, proposes that, because cultural identity and political identity are interdependent, new political identities will necessarily arise from new cultural identities. Just as Canada established successive coast to coast broadcasting networks and Quebec established Radio Quebec to strengthen sentiments of collective identity, whether Canadian or Quebecois, so too did the European Community seek to establish pan-European television services to strengthen sentiments of a shared European identity. For example, by embedding European content quotas in its broadcasting directive (Council of the European Communities, 1989) and by establishing a film and television subsidy scheme – the 11

Media and Identity in Contemporary Europe MEDIA programme. And just as Canada has perceived the chief threat to Canadian cultural (and therefore political) identity to derive from the United States so too has the European Community.

Broadcasting and Community in Western Europe in the 1980s If there are shared contemporary sentiments and situations in Canada and Europe, how has Europe addressed them, and to what effect? The last decade has seen marked changes to European broadcasting. In ten years public service broadcasters have lost their almost unchallenged dominance and have become an embattled minority: in 1982 there were four commercial television channels in the whole of Europe, in 1992 there were fifty-eight (Hodgson, 1992 p. vii). Moreover, national broadcasting regulation, which with few exceptions maintained national public service monopolies, must now co-exist with pan-European regulation which emphasises consumers’ rights to freedom of access to information and broadcasters’ rights of access to markets. And of course the explosive growth of hours broadcast has not been matched by a commensurate growth in European production – resulting in a substantial increase in the numbers of television programmes made outside Europe shown on European screens. In 1982 the Council of Europe established a permanent committee and administrative apparatus for mass media issues which was located in its Directorate of Human Rights. The committee (the CDMM, Comité directeur des moyens des communications de masse) was established because the Council was alarmed by UNESCO’s contemporary initiative promoting a New World Information and Communication Order (UNESCO, 1980). UNESCO advocated that reception of broadcast signals in a state’s territory was to be lawful only if secured by the ‘prior consent’ of the government of the receiving state. The Council of Europe regarded UNESCO’s doctrine as a threat to the rights of European citizens and notably to those enshrined in Article 10 the European Convention of Human Rights which states: Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers.

Thus in the year when the first operational European satellite television services began, the Council of Europe emphatically affirmed European citizens’ rights to receive transfrontier communications by establishing its CDMM and asserting the importance of Article 10. The European Community also made profound changes to television in Europe. Between 1982, the year from which its initiatives in the audio-visual domain are usually dated, and 1992, the year in which the European single market (including television) was due for completion, it established pan-European broadcasting regulation, a production and distribution subsidy scheme, unsuccessfully promoted pan-European television services and successfully established a competition policy regime profoundly hostile to public service broadcasting. Paradoxically, the 12

Challenges and Opportunities: Broadcasting in Multi-National States voluminous literature of reports, resolutions, communications and papers which have marked the evolution of Community broadcasting and audio-visual policy has resulted in only three definite initiatives. These three measures: the Television without Frontiers Directive of 1989 (Council of the European Communities, 1989), the satellite television transmission standards directives (Council of the European Communities, 1986 and 1992) and establishment of the MEDIA programme of support for audio-visual production and distribution (Council of the European Communities, 1990) have reshaped, and to varying degrees Europeanised, television. In 1982, the year the Council of Europe established the CDMM and the first European satellite television services were launched, the European Parliament (an organ of the European Communities/European Union) passed its first resolution on television: the Resolution on Radio and Television Broadcasting in the European Community – the so called Hahn Resolution (European Parliament, 1982a). In the Hahn Resolution, the European Parliament, as did the Council of Europe, welcomed satellite television. But whereas the Council saw satellite television as a means to extend a human right, the Community saw it both as a useful instrument for the fostering of a shared European identity and culture in pursuit of the (logically unattainable) goal of ‘ever closer union’ enshrined in the Treaty of Rome (under which the European Economic Community was established) and, if uncontrolled, as a profound threat to European aspirations. Hahn stated: ‘Information is a decisive, perhaps the most decisive factor in European integration’ (European Parliament, 1982 p. 8) and argued that ‘The instruments which serve to shape public opinion today are the media. Of these, television, as an audio-visual means of communication is the most important’ (European Parliament, 1982 p. 8). The Hahn report proposed re-regulation of European broadcasting in the interests of European Union and argued that: European unification will only be achieved if Europeans want it. Europeans will only want it if there is such a thing as a European identity. A European identity will only develop if Europeans are adequately informed. At present, information vis à vis the mass media is controlled at national level (European Parliament, 1982 p. 8).

However the Hahn Report (on which the Parliament’s Resolution was based) warned against the deregulatory forces which were growing in importance. Broadcasting, it argued, was in danger of becoming ‘an article of merchandise in the framework of the Common Market’ (European Parliament, 1982 p. 23). Contributors to the Hahn Report were particularly alarmed by the prospect of satellite broadcasts flooding ‘the Community in unlimited quantities as though they were a commercial product’ (European Parliament, 1982 p. 24). They believed that the free operation of a broadcasting market was incompatible with the central values of the Community and argued that ‘the maintenance of public order is as important to the Member States in protecting their own fundamental rights and preserving their cultural and political 13

Media and Identity in Contemporary Europe identity, as the principle of a free flow of information. Unrestricted cross-border commercialisation is dangerous […] regulation should embody the structural guarantees necessary for independence without which a European broadcasting war will inevitably break out which may destroy the cultural values of our Community’ (European Parliament, 1982 pp. 24–5).

Divisions in the European camp The lines between liberals and dirigistes, deregulators and interventionists, began to be firmly drawn in the early 1980s. Dirigistes, who supported film and broadcasting as an agency through which a collective European consciousness could be created, tended to support established public service broadcasting monopolies, quotas and subsidy support for films. Liberals emphasised the primacy of consumers’ interests and the beneficial consequences for the Community’s audiovisual sector which competition would bring. The Parliament, in adopting the Hahn Report and passing the Hahn Resolution which arose from it, clearly aligned itself with the dirigistes. It advocated a Community broadcasting order shaped by a combination of prohibitory regulation and facilitating subsidies rather than through the operation of competitive markets. In political cultures such as the United Kingdom’s and Canada’s, the story of broadcasting policy could (almost) be written as an account of the acts and actions of Parliament. However, in the European Community the Parliament has been an impotent body and it is generally accepted that the Community (now the Union) suffers from a ‘democratic deficit’ (Commission of the European Communities and European Parliament, 1990 p. 6). It is the non-elected Commission of the European Communities which initiates and decides policy. Accordingly it is the policies and practices of the Commission which have decisively shaped European broadcasting. But the Commission is not a unitary body and there are important policy conflicts within the Commission as well as between it and the Parliament (and the Member States). Thus, depending on where one looks, the Commission can be seen either to be a determined supporter of regulation and intervention in broadcasting markets or of competition, deregulation and market solutions. If one looks at the directorate generals (or ‘ministries’) responsible for the Audiovisual, Information, Communication and Culture, that is DG X, and at that responsible for Telecommunications, Information Industries and Innovation (DG XIII) one sees a dirigiste and interventionist Commission. If one looks at DG III [Internal Market and Industrial Affairs] and DG IV [Competition]) the image is of a liberal and deregulatory Commission. But, divided though it may be, the most important European broadcasting initiatives have derived from the Commission and have substantially deregulated broadcasting in Western Europe because the ‘ultra-liberal’ directorates general, DG III and DG IV, have been much more powerful than the ‘dirigiste’ directorates general DG X and DG XIII.4

The market paradigm: competition and Television without Frontiers The most important of the Community’s broadcasting initiatives was, of course, Television without Frontiers (Commission of the European Communities, 1984). The 14

Challenges and Opportunities: Broadcasting in Multi-National States publication of the Commission’s Green Paper5 (emanating from DG III) in 1984 led to the Television without Frontiers Directive (Council of the European Communities, 1989). This Directive and the application of competition regulation to the broadcasting sector by the Commission’s Competition Directorate have decisively changed broadcasting in the Community. The Green Paper on the Establishment of the Common Market for Broadcasting, especially by Satellite and Cable, better known by its alternative title Television without Frontiers (Commission of the European Communities, 1984) was written: to demonstrate the importance of broadcasting […] for European integration […] to illustrate the significance of the Treaty establishing the European Economic Community (EEC Treaty) for […] broadcasting […] and to submit for public discussion the Commission’s thinking on the approximation of […] Member States’ broadcasting and copyright law (Commission of the European Communities, 1984 p. 1).

It showed that substantial revision and harmonisation of national laws was required if a single Community broadcasting market was to be established, notably in advertising, copyright, access to national markets for foreign signals and regulation of content to protect vulnerable viewers. The authors of the Green Paper claimed that new broadcasting technologies, notably satellite television, would extend consumer choice by bringing broadcasting services from several member states to viewers and listeners who, hitherto, had customarily had access only to those from their own country. The Green Paper argued for a new, liberalised, broadcasting regime which, its authors believed, would better serve the rights of individual viewers and listeners, would promote European integration and would assist the development of the Community’s audio-visual sector by promoting ‘supply specialisation’ (Commission of the European Communities, 1984 p. 38). Television without Frontiers stated that: Moves towards integration, which go hand-in-hand with an increasingly marked division of labour, heighten the need for a cross-frontier exchange of information within the Community […] keener competition within the common market will trigger adjustment processes in broadcasting and in the competing media and will lead to a greater degree of supply specialisation (Commission of the European Communities, 1984 p. 38).6

Supply specialisation meant that audio-visual production was to migrate to some locations and leave others, and became one of the most controversial aspects of the single market in broadcasting policy. Redressing the effects of an intensified division of labour in the audio-visual sector, and thus reversing the changes wrought by Television without Frontiers, became one of the dirigistes’ principal policy goals. They argued that the creation of a single broadcasting market would reduce diversity (or, as one Commission official put it when interviewed [11.11.1991] ‘to hand over the audiovisual to English language production’). In fact, few welcomed the Green Paper. Even 15

Media and Identity in Contemporary Europe the United Kingdom, though likely to benefit from a broadcasting and audio-visual regime of ‘supply specialisation’ within the Community, was no less strong in its initial opposition to Television without Frontiers than were other states. The eventual implementation of the Television without Frontiers Directive, which dissolved national communication sovereignty and sanctified the presence of commercial satellite television services in broadcasting markets which were formerly the fiefs of public service broadcasters, testifies to the extraordinary power of the Commission of the European Communities to initiate and promulgate measures even when unsupported by the Member States of the Community. Two UK commentators testify to the controversial character of the Directive in which the Television without Frontiers initiative culminated: Of all the internal market directives […] few have aroused so much passion as the European Commission’s efforts to create a single market for satellite broadcasting without frontiers. Supporters of the Commission’s unprecedented entry into the television broadcasting sector have characterised the initiative as Europe’s heroic last stand against the twin assault of American cultural imperialism and Japanese technological dominance, and the only real hope of saving Europe’s ailing cinema film and electronics industries from extinction (Owen and Dynes, 1990 p. 176).

The Dirigistes’ strategy Others regarded Television without Frontiers as a policy which gift wrapped the Community’s television market for Japan and the USA! After publication of Television without Frontiers Community policy and the Community policy discourse divided. One cluster of policy actors sought a liberal market-based regime of supply specialisation and competition, the other the increased use of regulation and subsidy to achieve a planned broadcasting and audio-visual regime. Interestingly, the arguments which dirigistes deployed in favour of regulation and intervention came to emphasise European cultural diversity rather than the European union and cultural unity which they had propounded at the time of the Hahn report and resolution. Fearing that the single market would indeed produce unity in the audio-visual domain, but the wrong kind of unity – one born of ‘supply specialisation’ (the term used in Television without Frontiers) and a consequential concentration of production and content in English language media – the Commission intervened to establish the MEDIA Programme of support for audio-visual production and distribution (Council of the European Communities, 1990). And dirigistes succeeded in including European content quotas in the broadcasting directive (Council of the European Communities, 1989). The MEDIA programme of support for audio-visual production and distribution was formally established in 1990 by the Council of the European Communities (the powerful conclave of Member States) under the Presidency of France (Council of the European Communities, 1990). However the Council’s initiative was based on a modest programme which the Commission had earlier established using its own resources in 16

Challenges and Opportunities: Broadcasting in Multi-National States 1988 as MEDIA 92. The Council of Ministers’ endorsement strengthened the programme which was renamed MEDIA 95. However it was widely recognised that the 200m granted to MEDIA over five years commencing 1.1.1991 (Council of the European Communities, 1990) would be inadequate for the ambitions of the MEDIA Programme. The MEDIA programme’s role is to promote ‘the production and dissemination of audiovisual works throughout the Community’ (OJ C 115 29.4.91. p. 18). Its specific focus is ‘training, preproduction, multi-lingualism of programmes, use of nex [sic] technologies, distribution and commercial promotion, the creation of a ‘second market’ and easier access to venture capital’ (Council of the European Communities, 1990 p. 174). During the pilot phase of MEDIA 92, eleven projects or programmes were launched. These were: the European Film Distribution Office (EFDO), the Espace Video Europeen (EVE), Broadcasting across the barriers of European language (BABEL), the European Film Club, the European Script Fund: Support for Creative Independent7 Production talent (SCRIPT), Association Européene du Film d’Animation (CARTOON), the Media Investment Club (MIC), regional development of the Audiovisual Industry, Les Entrepreneurs de l’audiovisuel Européenne (EAVE), Media Venture and Media Guarantee. MEDIA 95 established several new initiatives notably: GRECO (Groupement Européen pour la Circulation des Oeuvres), MAP TV (Memory, Archives, Programmes), MCD (MEDIA project for Creative Documentaries), SCALE (Small Countries improve their Audiovisual Level) and Media Salles/Media Theatres were established. The disparity between the plethora of MEDIA Initiatives and its low level of resources has occasioned several sharp criticisms of the high proportion of resources devoted to administration and the low proportion actually reaching the audiovisual sector. The profile of the MEDIA programme can be seen in two ways: either as a classic example of bureaucratic logrolling and patronage where public resources are deployed for the benefit of political insiders rather than for the notional beneficiaries; or as a subtle use of ‘la méthode Monnet’ whereby ‘political facts,’ albeit small, are created to provide a base for future development. Just as ‘la méthode Monnet’ was used to conjure the banal bureaucratic initiative of the European Coal and Steel Community into the present European Union so proponents of the MEDIA Programme and ‘la méthode Monnet’ hope that the modest, but diverse, MEDIA 95 programme will develop into an extensive and well-funded programme for support of the audiovisual sector.

The Role of Competition The European Community’s broadcasting and audio-visual policy is therefore obviously divided and its rival policy paradigms are represented by Television without Frontiers and the MEDIA Programme. However Community broadcasting and audiovisual policy cannot be fully understood from examination of regulations and policy documents. Important aspects of policy and practice derive from the case by case rulemaking of the Directorates of the Commission of the European Communities responsible for Competition and the Internal Market. The Competition Directorate, DG IV, has made particularly important interventions on public service broadcasting 17

Media and Identity in Contemporary Europe –notably in respect of broadcasters’ acquisition of rights to sporting events and cinema films and has in challenging public service broadcasters’ attempts to seize competitive advantage through their control of attractive programming. The first of DG IV’s interventions overturned the deal which the major German public service broadcaster, the ARD, struck with MGM/United Artists to secure exclusive German language transmission rights to a bundle of 1364 archive feature films coupled with an output deal whereby the ARD gained exclusive rights to 15 new MGM/UA films per year for 15 years (see Decision 15.9.89 in OJ L 284 p. 36. 3.10.1989).8 DG IV’s second notable intervention was in the Eurosport case. The UK company W. H. Smith Television (the principal investor in the satellite television channel Screensport) complained that Eurosport (established by an agreement between the Eurosport Consortium – a group of EBU member broadcasters including the BBC – and Sky Television), the satellite television sports channel (with which Screensport competed) infringed Community competition requirements and disadvantaged Screensport. The nub of the dispute was whether Screensport was improperly disadvantaged in the acquisition of rights to screen sports events by EBU member broadcasters with a stake in Eurosport.9 The Commission found in favour of Screensport and, in consequence, the balance of advantage, which Television without Frontiers had begun, shifted further away from public service broadcasters and to commercial broadcasters There is, then, in the European Union a Single Market in broadcasting and the audio-visual but not a common market. The supersession of national communication sovereignty in consequence of both technological and regulatory change has not been sufficient to erode the cultural and linguistic differences which still separate distinct European television audience groups. The effect of satellite television and a regulatory policy based on Television without Frontiers has been an increase in competition in separate national (or strictly linguistic) television markets ending the monopolies long enjoyed by most European public service broadcasters.

Cultural Difference The hope that an integrated single European broadcasting market would create a market comparable to the USA’s and thus bequeath to European producers the advantages bestowed by a large domestic market which American producers had long enjoyed was frustrated by the cultural and linguistic differences of European viewers. Rather than creating a single European broadcasting market, Television without Frontiers intensified competition within distinct national markets. Attempts to establish pan-European services showed that European viewers’ tastes and interests were different. Research on viewer response to the pan-European satellite television channel ‘Super Channel’ revealed striking differences in viewers’ response to a common television programme schedule. Thus the creation of a programme schedule to maximise viewing in, say, Germany would reduce appreciation and share in, say, the Netherlands (see discussion in Collins, 1992 pp. 66–8). Moreover other studies identified profound differences in the behaviour and preferences of European television viewers. Souchon, in a study for the Assises européennes de l’ audiovisuel 18

Challenges and Opportunities: Broadcasting in Multi-National States (Assises de l’audiovisuel, 1989 pp. 77–92) also found significant differences in the behaviour of television viewers in Francophone Belgium, France, Hungary, Netherlands, Poland, Spain, Sweden and the United Kingdom. He found that viewers in different countries share neither tastes in programmes nor rank the same types of programmes highest in their orders of preference. In France, films shown at 2030 have the highest ratings. In the FRG10 and Great Britain, television series get high scores. Sports and varieties are highly rated in Italy; they come in second in the FRG and have a slightly lesser rating in Great Britain. The FRG gives high ratings to game shows (Assises de l’audiovisuel, 1989 p. 90).

A leading European public service broadcaster, Henri Perez the Director of the EBU’s Television Programme Department, summarised the findings of the nineteen-eighties and stated ‘Viewing habits vary enormously from country to country’ (Espace, N 12 1992 p. 4). The single market in broadcasting has neither improved the competitive position of European audio-visual producers by giving them a domestic market comparable to that of the USA, nor bound European television viewers into a common culture and thus promoted European union. However, the single market has had a dramatic effect on the ecology of European broadcasting and on public service broadcasters in particular. Competition in the single market has undoubtedly eroded the dominant position of public service broadcasters but has forced them to adapt to audience tastes and has thus strengthened them. Those which first experienced competitive pressures, notably the BBC11 and RAI have made significant recoveries. Massimo Fichera of RAI12 described the changes to RAI following the introduction of competition in Italy as leading to a ‘fruitful balance between market forces and public service requirements’ (Fichera, 1989 p. 23).13 Alasdair Milne (when Director General of the BBC), also testified to the positive impact of competition on RAI. Milne stated (to the Administrative Council of the EBU) that ‘competition from newcomers need not be feared unduly. It could have stimulating effects; had not the RAI, for example, when threatened some years ago been stimulated by the competition and had it not been able to meet it in a remarkable way?’ (Minutes of the Administrative Council, CA 1704 SPG 2653 May 1984 p. 37).

Conclusion Audio-visual policy is thus the site of conflict between Member States of the European Union and between rival interest groups and proponents of different policy visions within the Commission. Thus far we can see that there are some parallels between the experiences and policy dynamics of Canada and the European Union. Both societies are multi-lingual and multi-cultural; both have had almost no success in developing television programmes and services that appeal to viewers in all their different language communities; both have an ambivalent relationship to the powerful and seductive flow of programmes and services which originate from the USA; and both 19

Media and Identity in Contemporary Europe experience similar conflicts between proponents of rival policy visions. Moreover, both Canada and Europe have borrowed institutional models from each other: Canada the European model of public service broadcasting; and (at least some parts of) Europe has borrowed (at least some parts of) Canada’s popular television programming and Canadian institutional initiatives, such as the MEDIA Programme’s adoption of the points system, pioneered by the CFDC and later adopted by the CRTC, to define European content. On the other hand there is clearly a much stronger integration of broadcasting, audio-visual policy and regulation in the European Union to that which exists in the ALENA/NAFTA. Whereas the Commission of the European Communities has successfully required the governments of Germany and Greece to open the benefits of their film aid regimes to all citizens of the European Union (formally at least a Belgian or Dane should have equal access to Greek or German subsidies for film production) it is inconceivable that an American or Mexican could so benefit from Telefilm Canada funds. Moreover competition is relatively new to European broadcasting and was brought by a combination of technological change, satellite television, and re-regulation, the establishment of the single market: it has had a dramatic effect. But competition is not new to Canada or Quebec and consequently the effect of satellite television in Canada and Quebec is unlikely to be the same as in Europe. Moreover the transnational economic unity, ALENA/NAFTA, in which Canada participates has a much less welldeveloped political and cultural dimension than does the European Union. In Canada and Quebec, as in Europe, the effects of satellite television are likely to depend on the relative costs and benefits of satellite television relative to other media – notably cable. If satellite television, whether or not delivered by an American ‘death star,’ offers lower costs and/or higher benefits than do other media, Canadians are likely to migrate to it; and if not, they won’t. The nature of the programming and the cost and quality of service offered by established Canadian media will determine their fate in competition with new satellite services. However, there is a crucial new variable – regulators cannot exercise control over new media as effectively as they were able to do over the old. Canadian regulators will undoubtedly find it more difficult to set the terms on which such satellite signals from the USA enter Canadian homes than they did with cable relay of terrestrial broadcasts. Not only does satellite television have an obviously trans-national, frontier-crossing, character but the digitisation of information and the decline in the cost of telecommunication services now mean that citizens of one country have effectively untrammelled access to dial up information services in others. Moreover, the growth in power and importance of international ethical and trade regimes (such as the European Declaration of Human Rights and GATT) has limited governments’ ability to exercise control over citizens’ access to information products from outside their borders – albeit the European Union, led by France and drawing on Canada’s establishment of a ‘cultural exception’ in NAFTA, successfully excluded the audiovisual sector from the GATT in 1993. If governments therefore wish to promote indigenous information products or services – films, television programmes and channels – they must in future have recourse more to incentives than to prohibitions. Prohibitions are becoming 20

Challenges and Opportunities: Broadcasting in Multi-National States increasingly difficult to enforce, but so too are incentives – because all states have an excess of unsatisfiable claims on the state budget. In comparison to the claims of health, education and research, the claims to subvention of the cultural sector can often appear very fragile. In Europe as in Canada there is no consensus on these matters. The author’s view reflects, no doubt, his own national origins in judging that the introduction and augmentation of competition in European broadcasting over the last decade has been, grosso modo, a good thing. Consumers have greater choice and competition has led both to a more efficient use of resources by what were often ossified and bloated monopolies and a welcome reorientation of programming to viewer tastes and interests. This is not to say that broadcasting markets are perfect or that there is no role for regulation and the state. The question which faces us – and has faced Canadians longer than Europeans – is how the balance is best to be struck between competition and intervention. We must now decide not between public service or the market – for either alone is lethal to the public interest – but between various combinations of the two. However striking the parallels between Canada and Europe may seem to be, there are fewer lessons for Canada in the European experience in the 1990s than there were in the 1920s when the Aird Committee examined European broadcasting in search of a model for Canada (though probably more than in the 1950s when advocates of commercial broadcasting in Canada invoked what Peers rightly described as a poorly understood British system [Peers 1979 p. 90] to support their interests). Although Europe has more than a decade of experience of transnational satellite television, it has neither developed a consensus on how this phenomenon should be addressed nor effective technological or regulatory instruments to exercise such control as might be desired. Indeed, there is rather less of a regulatory consensus in Europe than exists in Canada. It will not be easy to develop a suitable balance between competition and intervention in Europe for European policy makers tend to worship fervently and exclusively at the shrine of one or other of the fetishes – competition and intervention. But some conclusions can be drawn from recent history to form a basis for advance. The introduction of competition to European broadcasting has yielded notable benefits; viewer choice has been increased; programme offer is more closely matched to demand; broadcasters make more efficient use of resources. However, these gains have not been without cost: a larger proportion of the programme offer of European broadcasters originates outside Europe; the operation of quasi-markets in European broadcasting may crowd out programming which is innovatory, diverse and of high quality;14 the infrastructure and human resources required for the long term development of the European broadcasting and audio-visual sector may not be being renewed. If there are few lessons for Canada in Europe’s recent experience, it is none the less clear that many problems are shared. To combine the benefits of competition with the measures needed to redress market failure requires an imaginative regulatory regime combining state intervention (e.g. through not-for-profit public service broadcasting); subsidies for the production and distribution of ‘merit goods’ undersupplied by the 21

Media and Identity in Contemporary Europe market; and prohibition (acknowledging the difficulties of effective enforcement) of the public circulation of undesirable programmes. However, it seems clear that a new relationship between public service and the market is required in both jurisdictions – one which will combine the responsiveness to audience demand (and efficient use of resources) of competitive broadcasting markets with the production and circulation of meritorious programmes and services not supplied by the market. A possible way forward might be to combine a publicly financed fund for programme production, of the kind pioneered in New Zealand, with the requirement that successful bidders must achieve a specified share of the audience for programmes supported with public funds. Any authorised broadcaster, whether for profit or not for profit, would be eligible for subsidy when making programmes that satisfied relevant criteria. Such a regime would potentially combine positive elements of both public service and market means of organising broadcasting services. But it is a melancholy truth that there has been little thought devoted to such questions in Europe over the last decade. The latest model in the showrooms of European broadcasters is still the Channel 4 model.15 And those who believe that there are lessons for Canada in Europe would do well to compare the leaky definition of European content in the Television without Frontiers Directive (Council of the European Communities, 1989) with the clearly specified requirements of the Canadian Broadcasting Act of 1991 and the regulations of the CRTC.

Acknowledgements This chapter is based on a keynote address given at a seminar, in which leading Canadian broadcasters, regulators and academics participated, convened by Professor Florian Sauvageau at the Ecole des Hautes Etudes Commerciales of the Université de Montréal in May 1994. It was first published as ‘Reflections across the Atlantic: Contrasts and complementarities in broadcasting policy in Canada and the European Community in the 1990s.’ in Canadian Journal of Communication. 1995 V 20 pp. 483–504.

References 1 I owe this insight to Jean-Pierre Desaulniers whose masterly account of the evolution of the téléroman Quebecois at the 1994 Input conference in Montreal included the extract from La Famille Plouffe which I consider here. 2 Since the Maastricht Treaty the term European Union is the correct title, though the term European Community, which has been generally used since the 1950s, is still often used. The term European Community should, strictly speaking, not have been used for there were three communities which made up the European Communities. The European Coal and Steel Community was established in 1952; the European Economic Community and the European Atomic Energy Community in 1958 by Belgium, France, Germany, Luxembourg, Italy and the Netherlands. These six states were joined in 1973 by Denmark, Ireland and the United Kingdom; in 1981 by Greece; in 1986 by Portugal and Spain; and in 1994 terms of accession to the European Union were agreed for Austria, Finland, Norway and Sweden. Austria, Finland and Sweden acceded to the European Union in 1995 but Norwegian electors, for the second time, rejected membership of the European Community. 3 When Political Counsellor at the office of the Agent General of Quebec in London.

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Challenges and Opportunities: Broadcasting in Multi-National States 4 To those in Canada and the United Kingdom, accustomed to ‘responsible government’ and the sovereignty of Parliament, the structure and government and disposition of power in the European Union may appear puzzling. In the European Union the Parliament is weak, the Commission initiates policy and disposes of considerable power. The Competition Directorate is particularly powerful and has used its ability to initiate investigations and impose penalties on firms to change long established arrangements within both the private and public sectors – not least in respect of public service broadcasting. 5 A discussion paper. 6 Although Television without Frontiers did not explicitly foreshadow the political pressures to redress the disadvantages the intensified division of labour which would follow creation of the single market the Green Paper makes it clear that powerful interests were at stake. ‘Not least because over 100,000 people from a wide range of specialist fields and covering a broad spectrum of skills […] are employed on a permanent basis by broadcasting organisations in the Community […] In addition, many more people are employed in a temporary capacity or on a fee-receiving basis ’. (Commission of the European Communities, 1984 p. 39). 7 Although a commitment to supporting independent producers and independent production is fundamental to the MEDIA programme no Community wide definition of independent exists. DG X commissioned Booz Allen to report on the status of independent production in the Community and to

8

9

10 11

12

13

make recommendations on a definition of independent production and an independent producer. Booz Allen proposed that not more than 60% of an independent producer’s output could be for a single broadcaster, no more than 25% of ownership of a producer could be by a single broadcaster and not more than 50% by broadcasters. After the ARD agreed to sublicense its film rights to commercial television broadcasters DG IV authorised its acquisition of the MGM/UA properties (Commission Decision 89/536/EEC): the Commission ruled that ‘agreements relating to exclusive television rights can only be exempted if suitable access facilities are made available to third parties’ (Bull EC 9–1989, pp. 25–6). The Eurosport Consortium Agreement (that is between EBU member broadcasters) was signed on 5.5.88. The ‘shareholders’ agreement’ between Sky Television and the Eurosport Consortium dated from 23.12.88. The Eurosport Channel was first transmitted from the Astra satellite on 5.2.89 for 17 hours daily in English, Dutch and German languages. Federal Republic of Germany. Admittedly a special case, not only because of its exposure to commercial competition thirty years before other European public service broadcasters but also because it is almost alone among European public service broadcasters in receiving none of its income from advertisements. Fichera was a Vice President of RAI, one of ‘Les Sages’ appointed to review the pilot stage of the European Community’s MEDIA Programme and has served latterly as President and Chief Executive of Euronews. Fichera stated that in 1985 RAI’s share of the Italian prime time television audience had fallen to 37% whereas the share achieved by Fininvest (Berlusconi) channels was 50%. In 1989 RAI’s prime time share had risen to 49% and Fininvest’s had fallen to 31%. Fichera attributed RAI’s success to scheduling a high proportion of its own productions, to coordinating the scheduling of its channels, to its reliance on mixed funding (i.e. advertising and public funding), and to innovations in programming and technology (Fichera, 1989 pp. 22–23). In 1992 RAI lost some of the ground it had won back from Fininvest. Its prime time share declined to 47% and Fininvest’s grew to 43% (Espace 18 February 1993, p. 6).

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Media and Identity in Contemporary Europe 14 I leave aside the vexing problems of definition of these crucial terms and of operationalising research to test the proposition that these ‘merit goods’ are undersupplied. 15 Some might object that the Franco-German culture channel ARTE provided a new model for public service broadcasting. However broadcasters’ (in Germany at least) hostility and viewers’ lack of interest suggest that ARTE is unlikely to provide a model for future developments.

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3

Television, Identity and Citizenship in the European Union If we were beginning the European Community all over again,’ said Jean Monnet, its founding father, ‘we should begin with culture.’ By linking together European culture and the new technologies, which hold the key to future prosperity and employment, a European television policy is now a major imperative. (Commission of the European Communities 1984a p. 10)1

I’ve despaired of finding a culture – other than that of Barbara Cartland, Batman, Indiana Jones and the Coca-Cola can – which should bring Europe and Asia closer together, so I accept, with no sense of despair at all, a Europe united only in its substructure […] If we wish to speak of a single European culture, we shall find it only in a tolerant liberalism which accepts those impulses which seem to be disruptive. National culture has nothing to do with political nationalism […] We are making an error of logic if we think that political and economic unity automatically signifies cultural unity. Culture is somewhere else. (Burgess 1990 p. 21)

Introduction Both Burgess’ and Monnet’s statements concern the relationship between politics and culture. Paradoxically, the man of letters downplayed the importance of culture for politics whereas the politician affirmed culture’s capital importance for politics. The contested link between politics and culture, which Burgess and Monnet addressed, lies at the heart of what one contemporary political philosopher resident in the UK has described as the ‘foremost ideology of the modern world’ (Minogue 1967 p. 8). This ideology is nationalism,2 a belief system defined by Gellner as a ‘striving to make culture and polity congruent’ (Gellner 1983 p. 43),3 which invests culture with a determining importance for the legitimacy of political systems and therefore the robustness of political institutions. Political legitimacy is a peculiarly challenging contemporary problem as Taylor states: the modern problem of legitimacy has peculiar significance for modern society. If we define this in terms of the attitudes and beliefs of members which dispose them to assume or refuse to assume the disciplines and burdens of membership in a given society, we can understand how as legitimacy increases in importance, the more weighty are the disciplines and burdens which must be voluntarily assumed. For the ideal despotism, legitimacy carries a much lesser weight, at least until that point where oppression drives the subjects to revolt. But in contemporary industrial democracies, the everyday operations must call on an ever-present fund of positive identification. (Taylor 1993 p. 66)

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Media and Identity in Contemporary Europe Although Taylor refers to his native Canada, the European Union is another case in point. The supposed fragility of the Canadian state is legendary but recent research suggests that the European Union is similarly vulnerable. Its legitimacy, in Taylor’s sense, is also uncertain for positive identification with the European Union by its citizens has declined. It reached a peak in Spring 1991 when 72% of citizens thought ‘EC membership is a good thing,’ whereas in May 1994 only 54% so responded (Source: Eurobarometer N 41 July 1994 p. i). The mass media, and television in particular, have been invested with a central role in the creation of political legitimacy in both Canada and the EU because of a pervasive belief in three linked presumptions; that polity and culture must coincide if states are to be legitimate and robust; that the media (and television in particular) are powerful; and that citizens’ symbolic identities are taken from television and are, positively or negatively, linked to political authority. It follows that a particularly high level of importance is likely to be attributed to the media in democratic political systems which lack the strong ‘fund of positive identification’ to which Taylor referred. In modern states the imperative to make polity and culture congruent conflicts with rival imperatives. Notably those of competing successfully on world information markets and/or participating in an international trade regime based on nondiscriminatory access to markets. A non-discriminatory trade regime is likely to facilitate imports of exogenous cultural products which, by definition, will make polity and culture incongruent. Moreover, successful export of information products will, all other things being equal, require that customer, recipient, needs and desires are met. The needs and desires of foreign customers and consumers are unlikely to be identical to those of customers in the products’ country of origin. Thus, although information exports customarily display distinctive characteristics which stem from their country and culture of origin, they are also likely to be tailored to the demands of importers. The cultural characteristics of internationally traded cultural products are thus likely, to a greater or lesser extent, to be discontinuous with the political identities of both their destination and origin. As is well-known the European Union’s competitive position in international information markets has become a high profile issue because of Europe’s worsening audio-visual trade balance. This is a particularly troubling problem because the audiovisual sector has been identified as one of few European industrial sectors in which employment and wealth creation are likely to grow. Both the Delors White Paper on ‘Growth, Competitiveness and Employment’ (Commission of the European Communities 1993) and the Bangemann Report on ‘Europe and the Global Information Society’ (Bangemann 1994) manifest these concerns (see also Commission of the European Communities 1994 and Vasconcelos et al. 1994). The Delors White Paper stated, in a perfect vindication of Lyotard:4 Le marché européen a été l’un de ceux dont la croissance a été la plus rapide au monde avec un taux de croissance du marché de 6% par an en termes réels, qui se maintient même dans l’actuel climat de récession. Ce sont les Etats-Unis qui ont le plus bénéficié de la croissance en Europe. Leurs ventes de programmes sont en effet passées de 330

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Television, Identity and Citizenship in the European Union millions de dollars en 1984 à 3.6 milliards de dollars en 1992 […] le déficit annuel de la Communauté européenne dans ses échanges avec les Etats-Unis s’élève à 3.5 milliards de dollars [The European market has been among the fastest growing in the world with a current market growth rate of 6% a year in real terms, that is being sustained even in today’s recessionary climate. The USA has benefited most from growth in Europe, increasing its sales of programming in Europe from US$ 330 million in 1984 to US$ 3.6 billion in 1992 […] the European Union’s annual deficit with the US in audiovisual trade amounts to about US$ 3.5 billion]. (Commission of the European Communities 1993 pp. 122–3).

If Europe is to succeed in a global market, and reduce its trade deficit in audio-visual products, it follows both that its products must meet the needs of global customers and that Europeans’ non-discriminatory access to export markets will be conditional on non-European producers’ non-discriminatory access to European markets. These economic imperatives can, at best, only with difficulty be reconciled with the politicocultural imperative to make culture and polity in Europe coincide. Consequently, as is well-known, European Union audio-visual policy is a highly contested domain. Its controversial status not only derives from its intrinsic importance but also from its symbolic significance as an index of the intensity and character of rival visions of the European Union itself. European media policy is a touchstone for judging whether the Member States, and public broadcasting corporations, are prepared to take European unification seriously and adopt a common policy on the media. (European Parliament 1985 p. 35)

Moreover, the context in which the European Union’s audio-visual policy is made, is being transformed by technological change: the globalisation of information services through satellite television; the expansion of the world’s biggest machine – the ‘any to any’ interconnected telecommunication system; the decoupling of cost and distance in telecommunications; and the enhanced ability to store and retrieve information in digitised form – whether video, text or sound conferred by new communication technologies. These not only accelerate the international circulation of cultural and information products but make the effective exercise of political power to secure cultural sovereignty more and more difficult to achieve.

Nationalism and collective identity Some aver (see, inter alia, Brunet 1966) that the congruence between polity and culture required by nationalist theory is simply the natural order of things. Whereas Gellner and others have argued persuasively that nationalism is a historically specific doctrine, Gellner argued that nationalism is specific to modernity and necessary to the transition to modernity. As he stated ‘the roots of nationalism in the distinctive structural requirements of industrial society are very deep indeed’ (Gellner 1983 p. 35). 27

Media and Identity in Contemporary Europe Gellner argued that the traumas of transition from pre-modern to modern society, ‘crossing the big ditch’ as he put it, were bearable only if a deep countervailing doctrine of social solidarity, nationalism, compensated for the experiences of atomisation and alienation experienced by those herded off the land and into the factories. This specific kind of solidarity was called into existence because of the intensity of the trauma of loss of other vectors of collective identity. Identities which derived from shared experience of place, social structure and belief dissolved as premodern life was left behind. They were replaced by the collective, national, identity conferred by cultural and linguistic unity. Taylor made much the same point arguing that: once nationalism arises, it cannot but take the place of patriotism in the aspiration to selfgovernment. Civic humanism needs a strong identification with a community. But this is the form that community-identification takes among modern, emancipated people (emancipated from church, from locality, from hierarchical allegiances). So patriotism becomes nationalism. (Taylor 1993 p. 42)

If national sentiment provided the social glue necessary for modern societies to hold together, what principles of cohesion remain to bind together complex, large scale, modern social structures – and few are more complex and on a larger scale than the European Union – characterised by polyglot populations, cultural hybridisation, fissuring and penetration by exogenous symbolic systems? Those who continue to adhere to the cluster of politico-cultural assumptions which have characterised nationalism anticipate social dissolution as the symbolic bonds of community are weakened through the globalisation of media and communications. But this is a specifically modern view. Looked at differently, the contemporary proliferation and hybridisation of identities and cultures is inoffensive and characteristic of a new sociocultural order: post-modernity.

Post-modernism It is a truism to observe that twentieth century Europe’s experience of the dark side of the Janus face of modernity, what Horkheimer and Adorno named the Dialectic of the Enlightenment (Horkheimer and Adorno 1947), gave rise to two post-modernisms (Foster 1985 p. xii). The rationalisation of life in the factory (Fordism), society and politics (Communism), the environment (pollution and species-cide) and the scaling up and mechanisation of murder in the Second World War and the Holocaust all led to a profound revaluation of the Enlightenment project of modernity. In the European political domain the attempt, embodied in the Versailles and Sèvres treaties, to reconstruct post-first-world-war Europe on modern lines, following a Gellnerian nationalist aetiology, reaped a whirlwind of rampant normative nationalism which culminated in the second world war. In turn, Europe’s experience of the orgy of mass slaughter which ended in 1945 led to reconstruction of post-war Europe on postnational lines. East of the Elbe post-national reconstruction took place in the lofty name 28

Television, Identity and Citizenship in the European Union of proletarian internationalism. West of the Elbe a banal but notably more successful integration of European economies was promoted so that no European state would retain an independent capacity to wage war on its European neighbours. If we can speak of two post-modernisms, one which rejected the project of modernism and modernity and the other which sought to purge modernity of its dark side and to complete, rather than reject, the emancipatory project of the Enlightenment then it was the second kind of post-modernism (sketched by Habermas in his ‘Modernity – an incomplete project’ [Habermas 1981]) 5 which informed the remaking of post war Europe. The seemingly pedestrian bureaucratic initiative which established the European Coal and Steel Community in 1951 began a new phase in the ‘modernisation’ of Europe: the integration of markets on the basis of competition and comparative advantage; the codification of universal human rights and, crucially, the creation of a supra-national agency to enforce them; and establishment of supranational democratic political institutions – notably the European Parliament. These all reflected attempts to remake post-war Europe in the image of Habermasian modernity. The makers of the new Europe were charged with ‘the belief, inspired by modern science, in the infinite progress of knowledge and in the infinite advance towards social and moral betterment’ (Habermas 1981 p. 4) and realised their vision in the Council of Europe and the European Community/European Union. Clearly, the new, transnational European polity and European economy were established to realise, more fully and more perfectly, the project of modernity. Yet, transparently, the new social fact, the European Union, offers its citizens few of the pleasures of collective identification and identity which, pace Gellner, might act as an anaesthetic and make endurable the pains of transition from a modern Europe of nation states to a post-modern Europe of shared sovereignty. If, as Gellner suggests, national identity re-enchanted the world during the industrial revolution, the Enlightenment, and the cluster of profound interconnected changes which we name the transition to modernity and which made it possible to bear the transition from gemeinschaft to gesellschaft, then transparently post-war Europeanisation has lacked a comparable force of re-enchantment. Two transnational European sovereign entities, the Soviet Union and Yugoslavia, have collapsed and although, happily, the European Union does not appear nearly so vulnerable, its proponents have sought in the mass media an agency of enchantment to bind citizens of the European Union into a new collective identity and reconcile them to their post-modern transnationalised fate. The European Parliament looked to television to bind the European Union together. In the Hahn Resolution of 1982, it sought to establish policies based on the syllogism, which has henceforth underpinned the Community’s key audio-visual initiatives: European unification will only be achieved if Europeans want it. Europeans will only want it if there is such a thing as a European identity. A European identity will only develop if Europeans are adequately informed. At present, information vis à vis the mass media is controlled at national level. (European Parliament 1982 p. 9)

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Media and Identity in Contemporary Europe Clearly the harmonisation and integration implied by pan-European media and a panEuropean collective identity is part of a quintessentially modern project – of what Habermas termed the completion of modernity. It is profoundly at odds with the type of post-modernism exemplified in Lyotard’s deservedly well-known attack (specifically directed at Habermas) on ‘the grand narratives or legitimating myths of the modern age, the progressive liberation of humanity through science and the idea that philosophy can restore unity to learning and develop universally valid knowledge for humanity’ (Lyotard 1984 p. 31ff). From the modern nationalist perspective both Lyotard’s pleas for discontinuity and incommensurability and the unfolding model of a fissured and heterogeneous pluralistic socio-cultural contemporary formation are dangerous nonsense. Post-modern social heterogeneity (manifested in mass migrations and tourism, multi-cultural, multi-linguistic, multi-ethnic, non-confessional societies) allied to the jackdaw character of contemporary culture (characterised by appropriation of a haphazard collection of shiny baubles from whenever and wherever they may be found) together threaten a fatal decoupling of polity and culture. From a nationalist perspective, societies such as these appear dangerously hollow because lacking an important principle of cohesion. Again Lyotard is exemplary. His rejection of the old forces of social cohesion (which he names ‘the old poles of attraction represented by nation-states, parties, professions, institutions, and historical traditions’ and persuasively – if polemically – exemplifies his disdain when stating ‘the Trilateral Commission is not a popular pole of attraction […] Dedicating oneself to ‘catching up with Germany,’ the life goal the French President [Giscard d’Estaing at the time this book was published in France] seems to be offering his countrymen, is not exactly exciting’ (Lyotard 1984 p. 14). This points towards a new conceptual paradigm, and a new policy nexus, for articulation of cultural and political identities. Multi-cultural and multi-national political units are of interest for each of the two postmodernisms. For post-Habermasians, such formations promise the realisation of a total society of universal rights and equality for all. For Lyotardians, – post-moderns hostile to the modern totalising and universalistic project – multi-cultural and multinational societies embody the differences and discontinuities so characteristic of advanced contemporary societies. But for moderns still wedded to the ideology of nationalism (rightly identified by Minogue as still dominant), such entities are profoundly troubling. They seem aberrant and intrinsically unstable. From the clash between these rival, modern and post-modern, perspectives several questions arise. Do hybridised cultural configurations threaten social cohesion? What is the appropriate relationship between polity and culture in a contemporary world of a globalised economy, of multi-national political structures and necessarily shared sovereignty? Can – and if so how – an already unprecedentedly large European Union further expand to accommodate and incorporate candidate members from the South and East? What is the role for the mass media and culture in large-scale polyglot transnational sovereign entities? How well do societies with discontinuous cultures hold together? We have to acknowledge that the answers to these questions are speculative and incomplete. There is little research to reduce our uncertainty. I know of only two 30

Television, Identity and Citizenship in the European Union empirical studies which cast light on the central question of the relationship between cultural identity and political identity.

Cultural and political identity The first is Anna Melich’s study (Melich 1990) of Swiss schoolchildren’s television consumption and the extent to which their sentiments of collective identity are affected by foreign television. Her research suggests that a strong sense of Swiss identity can, and does, co-exist both with extensive consumption of foreign television (from France by francophone Swiss, Germany for Swiss German speakers etc) and with little consumption of Swiss television other than that in the native language of the viewer. The children studied characteristically watched much foreign television (francophone Swiss children watched a lot of French television but little Swiss television in German and/or Italian, and their compatriots, speaking languages other than French watched little French language television, etc) yet retained a strong Swiss identity. Melich wrote: ‘A notre avis, ni la pluralité, ni les spécificitées régionales de la Suisse sont menacées par les nouveaux medias’ (Melich 1990 p. 130). The second is Lipset’s (1990) collection of comparative survey data on attitudes to a host of issues from crime to parenting. Lipset’s study suggests that Canadians’ values are comprehensively different to those of Americans in spite of extensive penetration of Canada by American media from the nineteenth century to data (see, inter alia, Collins 1990a, Peers 1969, 1979, Rutherford 1978). Neither Melich’s nor Lipset’s studies support the nationalist, modern, presumption about the necessary isomorphism of polity and culture. They suggest that neither collective identity nor life values are strongly linked to television consumption and suggest that both distinctive values and established political identities are relatively independent of television and media consumption. Of course, generalisation from the base of these studies is unwise. Not only are the studies limited in number but both concern multi-lingual states. And in at least one of the cases there are powerful forces – notably Quebec nationalism – seeking closer approximation between polity and culture than now obtains. Yet these seemingly aberrant cases may be representative of emerging post-modern societies which challenge and compromise the hard won congruence between polity and culture propounded by nationalists. And post-modern societies, although numerically a minority, may be more representative of the contemporary world than are the nation states which constitute the building blocks of our political imagination. The growth in world trade, in mass migration and of multi-cultural and multi-lingual societies; the resurgence of ‘fourth world’ populations; the impact of new communication technologies (which have reduced the cost of reproduction and distribution of cultural commodities and have thus incentivised extension of cultural markets in time and space) – have all made congruence between polity and culture more difficult to achieve and post-modern discontinuities between political, economic and cultural formations more and more representative of our contemporary experience. Creation of multi-lingual and multi-cultural sovereign entities, such as the European Union, represents a logical political response to the imperatives sketched 31

Media and Identity in Contemporary Europe above. But the very factors which gave rise to the Union make its construction following the modern model of congruent polity and culture difficult to achieve without infringing established ‘modern’ rights, notably, European Union citizens’ rights to freedom of information and expression across frontiers. Yet formal entitlement to the bundle of modern ‘enlightenment’ rights – including freedom of expression and information – is empty if there is no secure economic, social and political framework within which these rights may be peacefully enjoyed. Several questions arise. Is there a necessary trading off of social cohesion against the effective exercise of rights? Can a reconciliation between the exercise of rights and the enjoyment of social cohesion be contrived on an alternative basis, other than the national/modern congruence between polity and culture? And do the bundle of rights which constitute the patrimony of European citizens include a right (if right it be) to participation in a cultural collectivity of choice and to a share in a collective cultural identity? Exploring such issues demands that the plurality of collective identities actual and existing Europeans enjoy be recognised. Lyotard’s celebration of the polymorphous and discontinuous eclectic character of ‘contemporary general culture: one listens to reggae, watches a western, eats McDonald’s food for lunch and local cuisine for dinner, wears Paris perfume in Tokyo and ‘retro’ clothes in Hong Kong; knowledge is a matter for TV games’ (Lyotard 1984 p. 76) testifies to the contemporary experience of pluralised identity. The pluralism he eloquently invokes is echoed by European television viewing habits. The two dominant patterns of European television viewing behaviour are both out of step with pan-European political identity. The primary viewer preference is for own country television and their secondary preference for American programmes. As Silj states: ‘in each country, national programmes occupy the top positions in the audience ratings. The public’s second choice never falls on programmes produced by other [European RC] countries’ (Silj 1988 p. 199). If these plural and discontinuous postmodern patterns of behaviour are acknowledged two responses are possible: the modern, and pre-dominant European Union, policy choice of attempting the harmonisation of cultural identity and behaviour with political identity; or (if social cohesion is not thereby threatened) accepting these discontinuities and recognising, with Burgess, that cultural identity and political identity are discontinuous. It will be clear by now that, stated in its most modest form, I believe this second viewpoint is worth exploring and that if nationalism once facilitated ‘mobility, interchangeability and context free education’ (Hall and Jarvie 1992 p. 141) it seems to do so no longer. The question is therefore whether there are alternative means of achieving and theorising political cohesion in post-modern, discontinuous, circumstances.

Functionalism Functionalism provides an alternative paradigm. The ‘father’ of functionalism, the Romanian David Mitrany, developed his theory (or what he modestly described as an uncovering and clarification of ‘the relation of things’ [Mitrany 1975 p. 17]) in response to what he saw as the blight of nationalism; a doctrine which he characterised as a 32

Television, Identity and Citizenship in the European Union ‘ruthless political stress for uniformity’ (Mitrany 1975 p. 143). One of Mitrany’s disciples, Taylor, defines the major principles of functionalism as: that man can be weaned away from his loyalty to the nation state by the experience of fruitful international co-operation; that international organization arranged according to the requirements of the task could increase welfare rewards to individuals beyond the level obtainable within the state; that the rewards would be greater if the organization worked, where necessary, across national frontiers […] Individuals and organizations would begin to learn the benefits of co-operation and would increasingly be involved in an international co-operative ethos, creating interdependencies […] From small beginnings, in Professor Mitrany’s view, the functional approach could eventually enmesh national governments in a dense network of interlocking co-operative ventures. Furthermore, one important pillar of their authority – the loyalty of citizens – would have been weakened in the development at the popular level of a socio-psychological community which stressed superordinate ‘co-operative’ goals, but which nevertheless posed no apparent threat to the existing cultural attachments of groups and individuals. (Taylor in Mitrany 1975 p. x)

Clearly the structure and practices which Taylor outlines (and which suppose a separation, rather than the congruence customarily stipulated in nationalism, between culture and political structures) are quite different to the presumptions which have underpinned European Union audio-visual policy and which are implied in the citation attributed to Monnet with which this text begins. Although Monnet is widely cited as an authority supporting cultural intervention in fact he can be enlisted to support the functionalist side of the argument. As Mitrany gleefully recognised when he cited Altiero Spinelli’s coupling of Monnet’s and his own names: ‘Mitrany who became the theoretician of functionalism. Jean Monnet during the war years had elaborated the idea of applying the functional approach to that of the coal and steel industries and it was from this that there emerged the European Coal and Steel Community, the first […] example of a functional supranational authority’ (cited in Mitrany 1975 p. 75). Indeed Monnet’s own account of the path to European union (Monnet 1978) lends support to Mitrany’s claim and his memoirs show that he was rather contemptuous of the pursuit of European identity: ‘While fifty-five countries were meeting in Lomé or Brussels to seek their common interests, our diplomats were holding pointless debates about a “European identity”’ (Monnet 1978 p. 499).6 Given both the conceptual difficulties of identifying a European cultural identity able to include all who have to be included (minimally the citizens of the Member States of the European Union) and exclude all who have to be excluded, and Europeans’ disinclination to consume each others’ culture which stands in the way of a ‘modern’ cultural/political congruence in the European Union, a functionalist perspective and functionalist programme of European institution building may provide comfort to European unionists. Functionalist theory thus suggests that political and cultural discontinuity can be reconciled with social stability and that the modern 33

Media and Identity in Contemporary Europe stipulative congruence between polity and culture is neither necessary nor desirable in post-modern times. The existence of multi-national states with discontinuous relationships between polity and culture provide empirical evidence of the practical realisation of this theoretical possibility. Some notable contemporary examples of multi-national states are troubled by a precarious political order. But a precarious political order is neither the exclusive prerogative of multi-national states nor are all multi-national states politically precarious. However, although the functionalist perspective offers an attractive potentiality as a policy paradigm and some empirical evidence of its sustainability, a further important issue requires consideration: are rights abridged in such discontinuous cultural/political conjunctures? This question may appear strange because the essence of functionalism is a refusal of the cultural norms of nationalism. Functionalism is therefore a doctrine friendly to the rights of cultural minorities. As Mitrany stated in his critique of nationalism: ‘Its [nationalism RC] early champions, Mazzini and others, looked to nationality to open doors towards free international communion; with nationalism it has become a gate barred against outsiders and all their ways’ (Mitrany 1975 p. 34). However, it is not a doctrine which can readily be reconciled with the realisation of a putative human right to a collective cultural identity. This putative right is implicit in the arguments of powerful contemporary proponents of an active European audio-visual policy and who look to political institutions, whether nation states or the European Union, to realise such a right.

Cultural rights Jacques Delors, when President of the Commission of the European Communities, stated (at the Assises de l’audiovisuel in Paris 1989) that:7 Culture is not a piece of merchandise like any other and must not be treated as such […] culture cannot flower today unless control of the relevant technologies is assured. On the first point […] we cannot treat culture the way we treat refrigerators or even cars. Laissezfaire, leaving market forces to operate freely is not enough. I would like to ask just one question of our American friends […] do we have the right to exist?’. (Assises de l’audiovisuel 1989 pp. 47–8)

Delors’ arguments implicitly constitute collective cultural identity as a right, it can go without saying how important his views are – both because of the powerful position he long filled with distinction and because of the representative character of Delors’ arguments. Taylor provides a lucid explicit exposition of the core propositions implicit in Delors’ statement (though, of course, he is unlikely to have had Delors in mind when writing an essay first published in 1979): The core of the modern conception of rights is that respect is owed the integrity of the human subject. This obviously entails that the human subject has a right to life, to liberty; on Lockeian assumptions, also to property. But if we add the Romantic understanding of identity, as essential to human subjecthood, then plainly there is something else here to

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Television, Identity and Citizenship in the European Union which we have a right, namely, that the conditions of our identity be respected. If we take the nationalist thesis that these are primarily our belonging to a linguistically defined nation, we have the beginnings of another justification of the rights of nations to political expression. (Taylor 1993 p. 48)

Taylor here includes in the bundle of modern, largely individual, rights the right to a collective identity and to the public expression of that identity and therefore to a political roof under which individuals may realise their rights including their rights to the expression and enjoyment of: certain values, certain allegiances, a certain community perhaps outside of which I could not function as a fully human subject. Of course, I might be able to go on living as an organism outside any values, allegiance or even community. But what is peculiar to a human subject is the ability to ask and answer questions about what really matters, what is of the highest value, what is truly significant, what is most moving, most beautiful and so on. The conception of identity is the view that outside the horizon provided by some master value or some allegiance or some community membership, I would be crucially crippled, would be unable to ask and answer these questions effectively, and would thus be unable to function as a full human subject. (Taylor 1993 p. 45)

It is inconceivable that such collective identity rights can be realised within the context of a European Union in which polity and culture are congruent. Not least because, as Kedourie stated, ‘language is the means through which a man becomes conscious of his personality. Language is not only a vehicle for rational propositions, it is the outer expression of an inner experience, the outcome of a particular history, the legacy of a distinctive tradition’ (Kedourie 1966 p. 68). If Kedourie is right, a common European culture, necessarily expressed in and through a common language, would be at the expense of the majority of the Community’s languages and cultures. It would thus devalue the ‘fund of positive identification’ to which Taylor (1993 p. 66) referred. Paradoxically the nearest that Europe has come to a shared contemporary symbolic culture is through English language media. Moeglin observes that in 1990 of 12 transnational European television channels, 5 transmitted in English, another used English as one of its three languages, a seventh used no language and an eighth used several languages (including English). Moreover, of 96 national and regional television channels in the European Community (at the time Moeglin wrote) 24 used English – more than used any other single language (Moeglin 1991 p. 17).

European identity Not only do citizens of the European Union not share a common language but the societies which make up the union are becoming more diverse (and, as the number of EU member states rises, so does the Union itself). Between 1985 and 1992, for example, immigration to western Europe roughly trebled from little more than 1m per year to 35

Media and Identity in Contemporary Europe somewhat more than 3m per year.8 The Financial Times report of April 15th 1993 (on which I have already drawn for my statistics on inward immigration to Europe) cites the former Director of Immigration Policy, himself an immigrant, from one of the settler societies to which I have thus far given little attention – the United States. Demetrios Papademetriou stated that the new societies of Australasia and North America conceive national identity differently to Europe. In the settler societies, Papademetriou averred, ‘national identities are inherently dynamic and thus fundamentally mutable,’ whereas in Europe a notion of collective identity as protean and dynamic ‘is strongly resisted by most intellectuals and publics.’ If not in language and ethnicity, in what does European identity inhere? Anthony Smith, perhaps the leading British scholar of nationalism, defined ‘a common European cultural heritage’ as ‘the heritage of Roman law, Judeo-Christian ethics, Renaissance humanism and individualism, Enlightenment rationalism and science, artistic classicism and romanticism and above all traditions of civil rights and democracy’ (Smith 1991 p. 174). Shirley Williams (a former UK Labour Cabinet Minister and now lecturer in government at Harvard), in a London popular daily newspaper, referred to European identity as ‘a commitment to democratic institutions; a belief in individual freedom, racial and religious tolerance and a market-based economy; and a civil society in which the rights of each individual are respected and the obligations of each individual are discharged’ (in Evening Standard 14.12.1992 p. 9). These definitions may serve to define a shared European inheritance (though, selfevidently, major European groups are excluded by these definitions – European Muslims by Smith’s definition and communists, and perhaps socialists, by Williams’) but not to differentiate Europe from the states and peoples of the European diaspora in Australasia and the Americas – the children of Europe.9 It may reasonably be objected that citing British commentators proves little. Self evidently, the European Union’s anglophone states share a culture with their colinguists outside Europe as, to greater or lesser degrees, do citizens of other Member states of the Union with theirs. However, tighter definitions of European identity do not seem to be found elsewhere. For example, the European Commission recently identified the basis of European identity as: ‘the rejection of war, the fight against poverty and unemployment, protection of the environment; Human Rights, freedom and democracy; the wealth and diversity of European culture’ (Commission of the European Communities 1993 p. 2). And in the late 1940s, the European Movement defined the invention of science by ‘the western nations’ (European Movement nd p. 133) as the kernel of a distinctive European identity. Moreover, at the Hague Congress in 1948 (the genesis of the contemporary movement for European Union) European identity was defined as the ‘heritage of Christian and other spiritual values and our common loyalty to the fundamental rights of man, especially freedom of thought and expression’ (European Movement 1948 p. 88). Delegates to the Congress stressed the open and non-exclusive character of Europe. The French Delegate to the Cultural Committee, Professor Etienne Gilson (a member of the Académie Française and the Sénat), representatively described European culture as distinctive in so far as it ‘lay in its being receptive to outside influences and ready to 36

Television, Identity and Citizenship in the European Union give freely in return’ (European Movement 1948 p. 86). The difficulty with such formulations is that if they are sufficiently flexible to include all Europeans they are unlikely to be sufficiently exclusive to exclude non-Europeans. Not only is it difficult to find a definition for European culture that will serve to include all that must be included and exclude all that must be excluded: that is to perform the task that the modern, nationalist, outlook demands be performed. But it is questionable whether Europe’s continued adherence to modern conceptions of cultural and political identity will serve it well in contemporary circumstances. To insist on a shared, normative, cultural identity (whether for the European Union as a whole or within each of the Member States) risks offence to the individual rights of the increasingly diverse existing population of the Union and is likely to hinder the widening of Union membership. The really exacting challenges to the European Community, and indeed to Europe as a whole, in human rights, in culture, and in economic development, come not from western Europe but in respect of the south and east. How far are rights of abode and work enjoyed by Community citizens to be extended? To Turkey and to Russia? How far are prosperous western states prepared to expend ‘cohesion’ funding to impoverished and brutal societies? How far are the Catholic and Protestant traditions of western Europe able to embrace the Muslim and Orthodox south and east? There are clearly challenging difficulties that will continue to inhibit attempts to constitute the European Union along the state building lines characteristic of modernity. Not only are the common cultural inheritance of Europeans insufficient to distinguish them from important classes of non-Europeans but their collective European identity co-exists with other, usually more powerful identities rooted in national culture and language. Is nationalism then an ideology which has outlived its usefulness? Can other stipulations of modernity, notably universal human rights, be reconciled with the imperatives of nationalism in a world of more mobile populations and with the realisation of economies of scale and specialisation that derive from an international division of labour? Is a post-nationalist basis for state building required for post-modern times? Does functionalism provide such a basis? Or do the failure of transnational political units, such as the Soviet Union and Yugoslavia, suggest that it is only nationalism which provides a basis for a tolerable compromise between the forces of coercion, cognition and production in contemporary circumstances? Are we still in an era of modernity?

The awkward partner’s view10 Abstract statements of intellectual dynamics such as this leaves out the important, and ultimately inescapable, question of the interest of individual and group actors. Clearly the material interests of some would be served and others disadvantaged by the operationalisation of each of the possible conceptual schemes which I have sketched. However, it is not the purpose of this paper to offer a historical sociology of the debates, and lobbies, touching on cultural identity and politics in the European Union. Although a cynic could argue plausibly that the EU’s audio-visual policy amounts to little more than the special pleading of interest groups. 37

Media and Identity in Contemporary Europe UK commentators and politicians are notorious for their critical view of European integration. Perhaps I am playing the role of yet another ventriloquist’s dummy for voicing the ‘defensive and adversarial vocabulary adopted consistently for the past 40 years by almost the entire political class in Britain towards the European Community’ (Financial Times 12.12.1991 p. 3). Here, perhaps is the place to testify to my support for the European Community’s achievement in increasing the mobility of Community citizens who now enjoy novel rights of residence, establishment and to employment (although these augmented rights for European ‘insiders’ are often traded off against reduced rights for ‘outsiders’). The European free trade area established under Community auspices has offered European economies and enterprises potential economies of scale and scope, and the interrelatedness of western Europe’s economies has, as Monnet dreamed it would, made intra-Community war unimaginable. These are notable achievements in advancing towards what Habermas called completion of the project of modernity. But I must also acknowledge, my case for the Union is rather functionalist and is silent on the question of culture. However, I believe that the quest for a common European cultural identity is unlikely to assist the Union. It will not, I believe, help the European audio-visual sector either to reconquer its own domestic markets, or to produce works which will meet consistently the needs of foreign film and television viewers. Nor will it assist the Union to further its relationships – which must, in one form or another, become closer – with its neighbours to the east and the south, or to create the tolerant and pluralistic community necessary to provide a satisfactory home for the extraordinary mix of populations which live within the Union. Doubtless this viewpoint reflects my own formation as a citizen of a multi-national state, albeit one with only one official language. However, the unity of the United Kingdom, such as it is, has been maintained through accommodation with, and acceptance of, difference. The long-standing officially recognised cultural difference within the UK, notably manifested in Scotland’s separate legal and educational systems, have been echoed more recently in the domain of television by the establishment of a Welsh language television channel, S4C; a fund to promote the production of television programming in the Gaelic language; the export of production by public service broadcasters from London to the English regions and to Scotland, Wales and Northern Ireland; and affirmative action employment policies to increase the numbers of members of ethnic and linguistic minorities employed in broadcasting. This is not to deny that there has not been substantial convergence – often involuntary and unwelcome to some – between the cultures of the United Kingdom, only to state that the means taken to establish and maintain the political unity of the United Kingdom has been to recognise and sustain cultural difference and to make the key locus of integration political. Clearly, the UK’s experience and practices are not universally shared. Other states have attributed a considerably higher level of importance to cultural and linguistic cohesion than has the UK. In this context (and the enduring dialogue of the deaf between France and the UK in the forums of the European Union) comparison with France is particularly illuminating. As Eugen Weber recounts in his Peasants into 38

Television, Identity and Citizenship in the European Union Frenchmen: The Modernization of Rural France (1976) strong cultural convergence in France was enjoined by the central state apparatus. Indeed Weber goes so far as to claim that this process of modernization – achieved through a unified education system, universal military service and communication networks focused on Paris – was equivalent to colonization: Fanon’s account of the colonial experience is an apt description of what happened in the Landes and Corrèze. In France as in Algeria, the destruction of what Fanon called national culture, and what I would call local or regional culture, was systematically pursued. (Weber 1976 p. 491)

Such strong charges have, of course, also been levelled at the metropolitan power of London and the predominance of England in a multi-national UK. But my point is not to weigh in the balance the degree to which the balance of power in France and the UK have been more or less friendly to regional and national cultures but only to observe that our respective historical formations have been different. These differences may predispose British and French interlocutors towards different evaluations of the rival politico/cultural paradigms, one functionalist, post-modern, pluralist and the other nationalist, modern, monolithic, which are at issue within the European Union. We have in the European Union an intractable policy problem. Bounded by the familiar and oft reiterated rhetoric of cultural nationalism, asserting both the pragmatic necessity of shared identity and the right of Europeans to it; the inescapable absence of a common culture and language shared by European cinemagoers and television viewers (or if there be a common European culture it is distinguished by features shared with non-European societies – notably the USA); and the increasing multi-ethnic and multi-cultural character of the European population. As Burgess (1990) states, there is no common European culture, which has the property of binding together Europeans and differentiating them from non-Europeans, but, as Monnet stated, one is required if the European project of ‘ever closer union’ is to be realised. Enlightenment and post-enlightenment nationalism went hand in hand with the extension of collective identities. But extension of community in contemporary circumstances appears to be blocked, rather than facilitated, by nationalism. Nationalism impedes the development of transnational trading relationships, reserves full political and human rights to fellow nationals and generally anathematise those who are different. Realisation of the enlightenment project, in contemporary circumstances requires a more complete internationalisation of the relationships of coercion, cognition and production than we have yet achieved in what Gellner rightly (and modernly) insists is empirically, as well as epistemologically, ‘one world’ (Hall & Jarvie, 1992 p. 216). Europe has yet to come to terms with the condition of post-modern pluralism which it inhabits. It can best do so, I believe, by seeking to build social cohesion through a functionalist emphasis on practical measures of co-operation designed to establish and cement working relationships rather than a grossed up nationalism staking all on cultural homogeneity. There can be no doubt that consent to 39

Media and Identity in Contemporary Europe the changed arrangements will be difficult to win for change will inevitably disturb accustomed patterns of life. Certainly, further progress to completing the project of modernity and establishing a well-functioning European gesellschaft will be troubled without the gemeinschaft binding factors of shared language and culture that reconciled Europeans to the traumas of their first major steps towards making the transition to modernity. But European societies have successfully negotiated their secularisation and the dissolution of the confessional unity which once bound them together. If nationalism – the doctrine of an isomorphic polity and culture – is, as a Canadian commentator proposed ‘the dominant twentieth century form of religion’ (Underhill 1966 p. xvi) then can we doubt the capacity of European societies to secularise themselves culturally as they have religiously? The contemporary discontinuity in culture and between culture and polity, which modernist nationalists find so troubling, is a way station on the road to the realisation of the modern vision of a globally universalised gesellschaft with a necessary consequential loss of congruence between polity and culture. The post-modern condition evoked by Lyotard (1984 p. 76) – McDonald’s food, Paris perfume in Tokyo, ‘retro’ clothes in Hong Kong – is a symptom of the end of the grand narrative of nationalism and entry to a post-modern phase in progress towards the completion of the project of modernity through a post-national, culturally plural and discontinuous Europe.

Note This chapter has not previously been published. It is based on a paper delivered at the conference ‘Globalisation and the Mass Media. East-West Dialogues’ at the University of Central Lancashire, Preston in March 1997. The author acknowledges the support of the Economic and Social Research Council under award R 00023 2159 which made possible the research on which this paper draws.

References 1 The Monnet quotation is interesting; it is frequently cited yet I have found no attribution which has enabled me to identify its origin. It does not appear in Monnet’s principal written work, his Memoirs (Monnet, 1978). However the Memoirs do record Monnet’s conviction that European civilization is not the exclusive property of Europe. In 1966 he wrote: We must organise the collective action of our civilization. How can this be done? Only by uniting in collective action Europe and America, which together have the greatest resources in the world, which share the same civilization, and which conduct their public affairs in the same democratic manner. (Monnet, 1978 p. 486)

2 I use the term ‘nationalism’ to refer to the doctrine that political and cultural identities and institutions should match. My usage extends to political units larger than the nation state, notably the European Union. 3 I refer to Minogue and Gellner somewhat carelessly as British, although each spent most of his life in England the origins of each of them lie elsewhere, Minogue in Australia and Gellner in Czechoslovakia. 4 Lyotard stated ‘Knowledge in the form of an informational commodity indispensible to productive power is already, and will continue to be, a major – perhaps the major – stake in the worldwide

40

Television, Identity and Citizenship in the European Union competition for power. It is conceivable that the nation states will one day fight for control of information, just as they battled in the past for control over territory […] the mercantilisation of knowledge is bound to affect the privilege the nation-states have enjoyed, and still enjoy, with respect to the production and distribution of learning’ (Lyotard, 1984 p. 5). 5 The title, ‘Modernity – an incomplete project,’ which suits my purposes better than the title ‘Modernity versus post-modernity’ under which Habermas’ essay was first published in English, was given to Habermas’ essay when reprinted in Foster, 1985. 6 However, Duchêne states (of Louis Armand’s notion of a Europe ‘à la carte’) that ‘functionalism was anathema to Monnet’ (Duchêne, 1994 p. 397). 7 The Assises were held in Paris in 1989 and were jointly organised and sponsored by the Government of France and the Commission of the European Communities. They, and the action programme which they initiated, are often known as the Audiovisual Eureka. 8 In 1985 there were 1,020,000 immigrants to western Europe and in 1992 there were 3,040,000 (source The Financial Times 15.4.1993 p. 23). 9 As these states were felicitously described in the title ‘Les Enfants de l’ Europe’ of the French translation of Louis Hartz’s ‘The Founding of New Societies’ (Hartz ,1964). 10 I refer to George’s study (George 1990) of the UK and the European Community titled: An Awkward Partner: Britain in the European Community.’

41

4

Locked in a Mortal Embrace 1

The European Union Audiovisual Policies of the UK and France At a time when Europe, the cradle of Western civilization, loses control over one of the main areas in which contemporary culture is being made, the audiovisual, one can no longer react aesthetically to such liberal or ultra liberal ideologies. Reality demands that concrete steps be taken. (Lang 1988 p. 20)

Parfois, on a l’impression que c’est en souvenir d’un glorieux passé, au nom d’un statut d’ex-culture universelle que la France tente de lutter contre la déferlante venue d’outreAtlantique en suppliant l’ogre yankee de lui faire grâce [Sometimes it is as if France, in remembrance of a once glorious past and in the name of a former universal cultural status, was attempting to fight against the overwhelming wave coming from across the Atlantic and was begging the Yankee ogre for mercy]. (Chesnais 1994 p. 84)

Introduction There are good reasons to study the European audiovisual policies of France and the UK. For not only are the French and British audiovisual sectors more important economically than those of any other European Union Member States, but France and the UK represent, in their purest forms, the opposed visions and forces that have shaped EU audiovisual policy. The differences between the French and British visions are rooted in the different historical formations of the ‘frères ennemis’ and are sharpened by the antagonists’ pervasive mutual mistrust. For each, the other is the least trusted European Union partner.2 The European Union’s (formerly the European Community’s) audiovisual policy has been shaped by two contradictory dynamics: the promotion of, and resistance to, the integration and liberalisation of the EU’s audiovisual markets. It would be too neat to state that the UK has been the principal proponent of liberalisation and France the principal opponent, not least because, for the most part, the UK’s European audiovisual policy has been conspicuous by its absence! Better to state that the UK has gone with the flow of the policies of integration and liberalisation which have been uppermost in recent EU history, whereas France has perceived such policies to be, at best, insufficient and at worst actively hostile to European interests. Accordingly, in the EU context, Adam Smith’s ghost has overshadowed Jean Baptiste Colbert’s. The UK has succeeded because of the requirement for unanimity on matters such as audiovisual policy, which lie outside the provisions of the European treaties (with the qualified exception of the Maastricht Treaty). This – together with the coincidence of 43

Media and Identity in Contemporary Europe many UK interests with those of the great decider, Germany; Denmark’s obdurate resistance to increased Community powers in the cultural domain; and the naked economic interest of Luxembourg in liberalisation of European audiovisual markets – has been sufficient to ensure success for the UK – a success which requires only maintenance of the status quo – whereas France requires change to achieve its economic, political and cultural goals. In contrast to the UK, France has a substantial deficit in its audiovisual trade balance. France invests far greater importance in the furtherance of European political union than does the UK. A political union which, from the point of view of the dominant ‘nationalist’ assumptions which prevail in France, can only be secured if polity and culture in Europe are made congruent (Gellner, 1983) through a ‘Europeanisation’ of the programmes shown on European screens. Culture has, from this point of view, a central political importance. As Dominique Wolton stated: la construction de l’Europe oblige à sortir des contextes nationaux et à entreprendre une politique européenne de l’audiovisuel […] en préservant les capacités nationales de production indispensables pour éviter la perte d’identité culturelle de notre espace européen [The construction of Europe forces one to go beyond the national context and to launch a European audiovisual policy […] while keeping the national production capacity which is essential to avoid losing the cultural identity of our own European space]. (in his preface to Cluzel, 1993 pp. 7–8)

Moreover, France, unlike the UK, has characteristically seen US film and television programmes – the presence of which has increased so strikingly following liberalisation of European audiovisual markets – as so much cultural pollution.

European Union policies and practices There are four principal loci of European Union audiovisual policy.3 First, the creation of a single European market for television – a Television without Frontiers. Second, the attempted establishment of common technical standards for European television, principally satellite television, so that viewers are not denied access to European television services because of differing technological standards (and to protect European manufacturers from competition from outside Europe). Third, establishment of subsidy and support for European film and television production and distribution via the MEDIA programme. And fourth, the measures taken by DG IV, the Commission’s Competition Directorate, to establish a well-functioning competitive broadcasting market and to countervail broadcasters’ abuse of established dominant positions. These four initiatives have enjoyed very different levels of success. Broadly, the market opening initiatives – Television without Frontiers and the competition decisions of DG IV – have been successful and have dramatically changed European broadcasting. Whereas the dirigiste initiatives – the MEDIA programme and the setting of satellite television transmission standards – have either failed or have had a weak impact. 44

Locked in a Mortal Embrace Television without Frontiers Perhaps the best known single EU initiative was Television without Frontiers. Creation of a single European broadcasting market was first proposed in the Television without Frontiers Green Paper (Commission of the European Communities 1984) and the Directive (Council of the European Communities 1989) establishing the single market came into effect in 1991. Television without Frontiers was presented as a measure to integrate the EU’s broadcasting markets: to provide the EU with a home market comparable in size to the United States and to give European viewers access to broadcasting services from other Member States thus promoting a shared European consciousness and culture. But the strengthening of European producers has been highly uneven. And rather than fostering a shared European audiovisual culture, Television without Frontiers has increased and intensified competition within the distinct national, or more precisely linguistic, broadcasting markets of the EU. Thanks to Television without Frontiers, Member States cannot lawfully block circulation of television signals originating in another Member State. Hence broadcasters, formerly prohibited from establishment in or access to lucrative markets, have been able to establish new services and Europe has experienced an explosion in the number of commercial broadcasters. In 1982 there were four commercial television channels in Europe, in 1992 there were 58 (Hodgson 1992 p. vii) and in 1997 there were more than 250. Massive expansion in the number of channels amplified demand for programming far beyond the ability of the European revenue base to fund new European works and thus created a large ‘secondary market’ where archive programming – often from the USA – was recycled.4 Indeed Jack Lang5 (and others such as Roberto Barzanti, see Barzanti 1990), have argued that the single market served the United States’ interests and not Europe’s. Lang wrote: The countries of Europe, encumbered as they are with all sorts of historic, linguistic and sociological barriers, were more or less impervious to each other, while the European market – unified – existed only for the Americans. (Lang, 1988 p. 18)

France has consistently sought to countervail the effects of the single market. As President Mitterrand’s principal official spokesperson and organiser on audiovisual policy, Bernard Miyet, the Ambassadeur itinérant chargé des questions audiovisuelles [the itinerant Ambassador responsible for audiovisual issues], put it, ‘la construction d’un grand marché européen cohérent et transparent reste un objectif encore illusoire’ [building an integrated, transparent, European market is an increasingly illusory project] (Miyet, 1994 p. 61) and ‘Le libre échangisme a certaines vertues mais ne peut être en aucun cas un dogme intangible et sacré. Son application brutale dans le secteur audiovisuel serait économiquement injustifiée, culturellement destructive et démocratiquement déficitaire’ [free trade has some merits but can never be an unchallengable sacred cow. Its straightforward application to the audiovisual sector would be economically unjustified, culturally damaging and undemocratic] (Miyet, 45

Media and Identity in Contemporary Europe 1994 p. 62). France sought to translate its well-established domestic policies of quotas and production support into a European Union context. It established the MEDIA programme and inserted a European content quota (Article 4) into the 1989 Directive and has consistently, but thus far unsuccessfully, sought stronger quotas in a new Television without Frontiers Directive. The current Directive of 1989 which came into effect in 1991 imposes a 50% European television programme content quota. But the quota is gravely weakened because some types of programming are excluded from quota provisions and by the rider that quotas are required only ‘where practicable.’ The UK has interpreted the ‘where practicable’ provision liberally. A senior UK official (interviewed 10.2.1992) stated that the UK did not think it ‘appropriate’ to require satellite film channels to conform to the Directive’s European content quotas, and continued: ‘we can’t expect them to screen Jacques Tati films the whole time’! Jean Cluzel6 (1993 pp. 46–50), describing France’s part in the drafting of the 1989 Directive, states that the UK, Germany, Denmark, Ireland and Luxembourg opposed stringent quotas. Quotas have assumed a talismanic quality in the European audiovisual policy debate. As Nöel du Payrat7 put it (1996 p. 15) ‘Les quotas ont été et restent un point de cristallisation des blocages de l’Europe audiovisuelle’ [Quotas were, and remain, a point of crystallisation of opposing European audiovisual interest groups].8

The MEDIA Programme In a further response to the EU’s growing audiovisual trade deficit with the USA, a consequence of the demand unleashed by liberalisation of European audiovisual markets, the EU has fostered production and circulation of European audiovisual works by establishing the MEDIA programme which originated from the 1980s proposals of the European Parliament and the Commission of the European Communities for measures to support the Community’s audiovisual and broadcasting sectors. The first document issued by the Commission in which ‘audiovisual’ formed part of the title was the information release, The Community’s Audiovisual Policy (Commission of the European Communities 1986 p. 4) which proposed a ‘balancing’ of the Community audiovisual market. On one hand the market was to be integrated and the ‘entangled underwood of national regulatory obstacles to admitting broadcasts from other Member States’ swept away (Commission of the European Communities, 1986 p. 1) via Television without Frontiers. On the other hand pro-active measures to support and shape the film and television industries were to be adopted – notably the ‘strengthening of the technological capacity of the Community’s industry in the audiovisual and communications area’ (Commission of the European Communities, 1986 p. 3). In 1988 a pilot ‘Action Programme to Promote the Development of the European Audiovisual Industry ‘MEDIA’’ was established, and in 1990 the Council of Ministers (Council of the European Communities, 1990) renewed the programme’s mandate as MEDIA 95. But the funding for both phases is regarded, by MEDIA’s proponents, as inadequate (see, inter alia, Wangermeé, 1989 p. 2 and Moeglin, 1991 p. 48). The MEDIA Programme constituted a further cleavage between France and the UK. Whereas 46

Locked in a Mortal Embrace France vigorously sponsored the MEDIA Programme (and the Eurimages programme of support for European co-productions which, because opposed by the UK within the context of the Community, was established by ‘European variable geometry’ under the auspices of the Council of Europe) the UK opposed it. Indeed, the Whitehall official with UK responsibilities for the MEDIA Programme described UK policy towards the MEDIA Programme as ‘To close it down’ (interviewed 10.2.1992).9 This provocative definition of UK policy was qualified and the official further stated ‘we never wanted the MEDIA programme and we are trying to keep it on sensible lines.’ The UK’s chief concern, that money should not be wasted, was shared by Germany (see the statement by the German Delegation to the Council of Ministers of 20.12.1990 Document 10927/90 ADD 1). Although the UK and Germany shared an interest as net contributors to the Community budget, the Bonn/London axis of fiscal rectitude has not held good for all broadcasting and audiovisual issues. Alliances are often issue specific and the UK and Germany were on opposite sides on the issue of the satellite television transmission standards directive (the MAC Directive) in 1992.

Satellite Television Transmission Standards (the MAC Directive) If Television without Frontiers and the MEDIA Programme was concerned with software, then the third principal arena of European audiovisual policy, satellite television transmission standards, was concerned with hardware and the creation, for reasons of electronics industrial policy, of an integrated Community satellite television market. Just as European content quotas and the MEDIA Programme were conceived as instruments for the protection and stimulation of European audiovisual software so the Directive on satellite television transmission standards (Council of the European Communities, 1986) and a subsequent programme for HDTV and wide screen (16:9) television were conceived to protect and support the European television hardware industry. Here too France and the UK took different sides. In 1986 the Community issued a Directive on satellite television transmission standards (Council of the European Communities, 1986) to establish the MAC transmission standard as a Community norm. It did so to ensure that new European television markets (notably satellite and cable) would develop as a single market rather than, as had terrestrial television, as a series of separate markets divided by incompatible PAL and SECAM transmission standards. It also hoped that a common European standard, protected by patents held by European firms, would enable Europe to reconquer the domestic television receiver market which had largely been lost to Japanese and Asian manufacturers. As France’s Decaux report stated: le risque devient sérieux de voir à terme les téléspectateurs européens ne plus regarder sur des téléviseurs japonais que des séries américaines [There is a serious risk of European viewers eventually watching only American series on Japanese television sets]. (Decaux 1989 p. 8)

The Directive was poorly drafted and its provisions did not apply to the most vigorous and innovative satellite television delivery system – the Luxembourg based Astra 47

Media and Identity in Contemporary Europe services (which included Rupert Murdoch’s Sky Channel). Astra based services used PAL standard equipment which, as an old and proven technology, was cheaper and more reliable than the MAC based systems mandated by the Directive. Although the Directive was revised and renewed in 1991 the UK (supported by Denmark, Spain and Ireland) successfully blocked France’s, Germany’s and the Netherlands’ attempt to mandate use of the MAC standard. A UK official interviewed by the author on 10.2.1992 expressed satisfaction at the outcome of negotiations and commented ‘the UK did very well’ in the negotiations over the new Directive. France, in contrast, recognised the outcome as ‘une reculade française’ [a French back-down]. (Cluzel, 1993 p. 15).

DG IV and Competition Policy Neither France nor the UK has actively shaped policy in the fourth arena of Community audiovisual policy: the application of the competition provisions (especially Articles 85–90) of the Treaty of Rome to broadcasting. Nor could they do so explicitly because the Competition Directorate, DG IV, has a considerable degree of independence and a quasi judicial status. However, the degree of vigour with which DG IV pursues competition issues seems to be related to the character of the Commissioner responsible for the Directorate. Unsurprisingly, pro-competition Member States strive to ensure that the Competition Commissioner reflects their values. There can be no doubt that Sir Leon Brittan, the UK Commissioner (and latterly Vice President of the Commission) responsible for competition from 1987 to 1992, was particularly vigorous in striving to extirpate putatively anti-competitive practices in the audiovisual sector – notably in public service broadcasting. His Belgian successor, Karel van Miert, has been somewhat less aggressive but there can be no doubt that DG IV’s impact has been to tilt the scales of EU audiovisual policy towards what Jacques Toubon described as ‘la culture anglo-marchande’ [the English shop-keeper mentality] (cited in Thody, 1995 p. 63) rather than France’s dirigiste interventionism. If the outcome of a complex multi-dimensional policy process can be reduced to simple numerical values, France has lost either 3:0 or, depending on how one evaluates the importance of the MEDIA programme, 3:1 to the UK in EU audiovisual policy – in spite of playing a more active and committed game. There are no effective quotas in the Television without Frontiers Directive, no effective satellite transmission standards directive, and a very effective pro-competition police force in DG IV. At best France has received an small consolation prize in the MEDIA, HDTV and 16:9 production subsidy programmes. The UK has been fortunate in that its policies run with the grain of the Community’s foundational economic values and, where faced by policy initiatives to which it is opposed, has been able to use the blocking minority and unanimous voting requirements provided in the Community’s political arrangements10 to secure its interests. But to describe these events is to explain nothing. Why have France and the UK behaved as they have? Are the policies of the ‘frères ennemis,’ rooted in a wellfounded apprehension of interests (whether national or European)? George (1990) has persuasively argued that the UK’s European policies are rooted in its domestic 48

Locked in a Mortal Embrace priorities and its European interests are, essentially, the projection of domestic interests onto a European stage. His model is helpful in accounting for the European audiovisual policies of both France and the UK – with the qualification that neither country has necessarily accurately translated its objective domestic interests into its European policies. How far does France’s maximalism and the UK’s minimalism in European Union audiovisual policy correspond to their distinct economic and political formations?

International Trade in films and television: France, the UK and the European Union In 1986 the OECD published a study of global audiovisual trade (OECD 1986) which showed that, overwhelmingly, global trade flows were dominated by exports from the USA to the rest of the world. Second only to the USA as an exporter, but a long way second, came the UK.After the UK came France. INA confirms that there has been no change in the international pecking order and found ‘la France [figure] à une très honorable deuxième place dans le palmarès des exportateurs européens, derrière la Grande-Bretagne’ [France occupies an honourable second place among the top European exporting countries, just behind Great Britain] (INA. 1995 p. 6). Although the relative international trade positions of France, the UK and the USA have not changed, it is clear that the bilateral audiovisual trade balances of both France and the UK with the USA have worsened – as has the overall trade balance between the USA and the European Union. The EU’s audiovisual trade deficit with USA has risen consistently since the mid-eighties to an estimated 3,500m in 1992 (Vasconcelos 1994 p. 15) and is likely to continue to rise as new television channels are established.11 The growing European trade deficit with the USA has borne unequally on European states. Although the UK is no exception to the European pattern of growing film and television programme imports from the USA, it maintained a positive ‘visible’ balance on the audiovisual trade account for the whole of the 1980s (CSO. 1991 p. 2). Although the UK went into ‘visible’ deficit (where for the most part it has remained), in the 1990s its deficit in film and television programmes has been more than balanced by net receipts deriving from other film and television services (ONS, 1996 Table 6). Moreover, unlike other EU states, including France, the USA is a significant audiovisual export market for the UK. As Hancock pointed out in his review of European Cinema ‘the real winners in the US market […] have been English language films’ (Hancock, 1992 p. 148). Thus the UK has no obvious interest in change to the European status quo, because this has permitted it to increase its exports to EU Member States, thanks to the opening of markets via Television without Frontiers, and to maintain its access to the important US market. In contrast, France is passionately committed to change. For France has experienced increased import penetration from the USA without the exports to the USA enjoyed by the UK. In the 1970s a particularly high proportion of the television programming screened in France was produced locally. UNESCO (UNESCO, 1982 p. 20) stated in Winter 1978/9 that 91.1% of French television programme output was of French origin,whereas a decade later the proportion of indigenous programming had fallen to 49

Media and Identity in Contemporary Europe (a still relatively high) total of 84% (Sepstrup, 1990 p. 23). In the period between 1986 and 1988, there was a striking decline in the proportion of French programming in the key programme genre of fiction: ‘la fiction entièrement ou partiellement française (coproduction) est globalement passée de 49% du total de fiction diffusée (sur trois chaînes) à 25% (sur cinq chaînes)’ [French, or partially French (i.e. co-produced), fiction formerly accounted for 49% of broadcast fiction (on three channels) and now accounts for 25% (on five channels)] (personal communication to the author from Mme R. Chaniac and M. J.-P. Jézéquel. Responsables de recherche à l’INA 1996). This finding is consonant with the analysis advanced by Jack Lang (when out of office during the period of political co-habitation between Conservative Government and Socialist President in France) in the semi-official Community publication ‘European Affairs.’ Lang argued that ‘allowing market forces full play means accepting the disappearance of film production in time. It has long been accepted in France that protective measures are indispensable’ (Lang 1988 p. 16).12 The audiovisual trade statistics13 of France and the UK for 1993 (the most recent year for which I have been able to secure data for both countries) shows the striking differences between the EU’s two most important audiovisual traders and the extent to which France’s experience is more representative of the EU as a whole.

The French market By 1994 only 48.6% of programmes transmitted on French television were of French origin, 14.7% came from other EU states (of which 42% came from the UK) and 36% from non-EU states of which the USA was overwhelmingly the most important source of programmes with 32.5% (from INA, 1995 pp. 18 and 19). In two decades the national content of French television had declined from more than 90% to less than 50%. Furthermore (give or take a percentage point or so of programmes from Australia, Canada, Ireland, New Zealand, etc) nearly 40% of programmes screened on French television emanated from anglophone states. The potential cultural impact of this transition needs no emphasis but it is also worth noting that its economic impact is far from negligible – France spends almost twice what the UK spends on television programme imports as a proportion of its total expenditure on television programming.14 A similar picture obtains in respect of cinema. In France in 1993, US films accounted for 57.7% of cinema admissions, French films 34.2% and films from other EU countries only 4% (CNC Info N 254 1994 p. 13).15 However, US penetration of the French film market was lower than for the EU as a whole, and strikingly lower than for the UK. In the EU as a whole, American films accounted for 75% of cinema admissions and national productions 15% (CNC Info N 256 1995 p. 63). And in 1993, American films accounted for 87% of cinema admissions in the UK, where national productions accounted for only 4.7% of consumption (CNC Info N 256 p. 66). For the most part, France’s audiovisual exports go to Europe. In 1992 61% of French film exports went to Europe and only 14% to North America producing total receipts of FF572m (CNC Info N 254 1994 p. 7). North America accounted for 14% of French television exports and Europe 69% of a 1993 total export receipts of FF427m (INA, 1995 50

Locked in a Mortal Embrace pp. 85 and 86). As Wallon16 stated: ‘l’Europe demeure notre premier marché en terme de recettes […] Le marché nord américain continue d’être très peu ouvert aux cinématographies étrangères et bien qu’y occupant la première place, le cinéma français ne fait pas exception à cette règle’ [Europe remains our first market in terms of receipts […] the North American market remains almost completely closed to foreign film-making, and although French cinema occupies the first place in the American foreign market it is no exception to this rule] (Wallon, 1994 p. 2).

The UK market In 1993 the UK had a positive balance of trade on the film account with receipts from exports (£336m) exceeding payments for imports (£257m) by £79m. For television in 1993, it had a trade deficit of £87m (receipts £181m, payments £268m) and thus an overall deficit on the ‘visible’ audiovisual account of £8m (ONS, 1996 Table 1)17 offset by net receipts of £82m for other film and television services (ONS, 1996 Table 6). North America was the most important trading partner for the UK accounting for £181m of UK film exports (of a total of £336m) and £294m of payments for film imports compared to £95m receipts for film exports and £69m payments for film imports to the European Union (ONS 1996 Table 2). The rise in UK film production rose from 67 features in 1993 to 127 in 1996 (Financial Times 11/12.1.1997 p. 4) is a further sign of health. Among these is a significant number of US ‘transplant’ productions such as Mission Impossible and the live action version of 101 Dalmatians.18 The European Union was the most important single television export market for the UK accounting for £78m of receipts (of a total £182m) in 1993 (whereas North America accounted for £49m of receipts). Payments in 1993 for television imports from North America totalled £199m (£31m for imports from the European Union) of a total £268m. Other countries in Western Europe accounted for a further £12m in receipts and the same amount in payments (ONS, 1996 Table 5). The UK experience provides a strong contrast to the French experience of a closed United States market. Yet, like France, the UK’s film exports exceeded its television exports.

Domestic Policy and the structure of audiovisual markets The UK and France thus have pronounced differences in their economic interests in the audiovisual domain to which their European policies are approximately, but imperfectly, related. France underestimates the economic importance of television and the UK underestimates the economic health of its film sector. But both countries have creditable export records in spite of significant levels of import penetration – the apocalyptic scenarios often canvassed (see, inter alia, the citation from Lang which introduces this essay) are not supported by the evidence. In film policy there is a neat congruence between the domestic and European policies of both the UK and France. France advocates European subsidy programmes to echo its domestic policies, in contrast to the UK, which abolished its main film support programme, the Eady levy, and its UK content quota in the early years of the Thatcher governments. However, in television there is a remarkable contrast. Paradoxically, France – sceptical of liberalisation in an EU context – has, within a national context, more 51

Media and Identity in Contemporary Europe thoroughly liberalised its television market than has the UK. And within France the Government has sponsored an expansion of the system which, in a European context, it has deplored as an engine of increased demand for American programming. France has privatised its flagship public service broadcaster,19 encouraged an increase in the number of television channels and actively supported the establishment of a commercial subscription channel, Canal +, on privileged regulatory terms. The UK, however, created a new public service broadcaster – Channel 4 – in 1982 and only belatedly licenced a new terrestrial commercial channel – Channel 5 (which began transmissions in Spring 1997). In contrast to France, the UK’s chief commercial subscription service, BSkyB, was established in spite of, rather than because of, official regulatory policy.20 Cathodon – the pseudonym of a senior French public servant – observed that an over-expanded French television encompasses a public sector of: ‘trois programmes de télévision (France 2, France 3, ARTE)’ complemented by ‘un secteur privé fort de trois chaînes hertziennes terrestres à diffusion nationale (TF1, Canal Plus, M6), treize télévisions hertziennes locales […] huit outre-mer […] dix chaînes thématiques distribuées par câble ou diffusées par satellite […] une douzaine de ‘canaux locaux’ du câble, plus de 200 réseaux câblés […] [Three television channels (France 2, France 3, ARTE)’ complemented by a ‘strong private sector with three national terrestrial channels (TF1, Canal Plus, M6), thirteen local channels […] eight channels in the overseas territories […] ten thematic channels distributed by cable or satellite […] a dozen cable ‘local channels,’ and more than two hundred cable networks] (Cathodon, 1993 p. 27). A major consequence of this explosion of capacity in France was a reduction in the average revenues available to fund each hour of programming screened thus increasing demand for imports.21 Cluzel judged this policy to have produced ‘des résultats […] effrayants’ [horrifying results] (Cluzel, 1993 p. 15) and placed the responsibility squarely at the door of the President of France: ‘C’est indiscutablement à François Mitterrand que l’on doit l’explosion du paysage audiovisuel français’ [Unquestionably, François Mitterrand was responsible for the explosive growth of the French audiovisual landscape] (Cluzel, 1993 p. 18). Cathodon persuasively argues that France’s policy was distorted because its audiovisual policy makers have been captured by the film industry. He, or she, states, ‘La récente réglementation sur le câble, par exemple, constitue une capitulation en rase campagne face aux représentants de l’industrie cinématographique’ [For example, the current regulation of cable television is an unconditional surrender to the film industry] (Cathodon, 1993 p. 40) and glossed the regulatory order to which s/he refers thus: ‘Le nombre, le poids, la minutie des obligations imposées aux chaînes hertziennes (et, désormais, avec le décret du 1er septembre 1992, aux chaînes câblées!) sont sans équivalent au monde [The number and weight of the meticulously designed obligations imposed upon broadcast television (and now imposed upon cabled channels since the law of September the 1st 1992) are unparalleled elsewhere in the world] (Cathodon, 1993 p. 39). Furthermore, there is a pronounced disparity between the battery of institutions and support mechanisms for French film and the relative paucity of equivalents for television. The Centre National de la Cinématographie (CNC) was established in 1946 – no equivalent for television. 52

Locked in a Mortal Embrace France has an extensive range of subsidies available to film producers (though state aid to television, in the form of public funding for Antenne 2, FR3 and ARTE, should not be ignored). Hypothetically, a producer drawing on the French support funds (Fond du soutien, CNC selective subsidy, SOFICA) could defray up to 33% of the production costs of a film budgeted at $15mUS whereas a UK producer could secure, at most, support for 20% of the production budget of a similar film.22 However, it is easy to overestimate the importance of subsidy. France’s subsidy, although more generous than the UK’s, pales into insignificance beside the subsidies potentially available to producers in Germany (70%). Yet France is considerably more important than Germany as a film producer. Moreover, the cost of production is considerably higher in France (a fortiori in Germany) than in the UK for all major factors of production (crews, sound stage hire, catering, film stock, laboratory costs) except extras and post production. Furthermore, cost comparisons do not tell the whole story. The source on which I have drawn for this information observes that, in qualitative terms: ‘The UK has a wealth of all facilities and the reputation of the sector is second to none. Consequently producers often find it is, in the long run, cost-effective to locate in the UK even when the rate card shows another country may be cheaper.’ France has prioritised the cinema, in the UK relations are reversed. Yet television is enormously more important than cinema23 both economically and as a factor in cultural consumption. Nowhere in Europe does cinema attendance approach the number of hours devoted to television viewing and cinema accounts for only 9% of European consumer expenditure on the audiovisual sector. Television accounts for 72%.24

Americanisation Dans chaque pays, le public préfère sa propre culture et connaît la culture des États-Unis. Il ignore le reste du monde [In every country, the public prefers its own culture and is familiar with American culture. It is ignorant of the rest of the world]. (Peskine, 1996 p. 23)

Massive structural changes in European television, attributable to the growth of competition fostered by Television without Frontiers, have stimulated the increased proportion of exogenous, mainly American, programming on European television screens. Yet the impact of these changes has been very uneven and we must consider the distinct audiovisual histories of individual European countries if we are to understand European Union policy. Here too France and the UK are very different. The force of ‘Americanisation’ hit France and the UK at different times and, paradoxically, given the absence in the UK of the linguistic screen which separates France and the USA, both film and television in the UK can be seen to have been strengthened by ‘Americanisation’ – whereas in France the same forces have invariably been seen as destructive. The Americanisation of French television is largely explained by the change in the structure of the French television market between the late-seventies and the 53

Media and Identity in Contemporary Europe mid-nineties – changes that had no parallel in the UK. In 1974 France broke up the state broadcasting monopoly, the ORTF. This move ‘induced the two companies [i.e. TF1 and Antenne 2 RC] to pursue the mass audience. The result was an effusion of American or American-style trivia’ (Kuhn 1985, p. 58). The privatisation of TF1 in 1987 further reinforced the tendencies identified by Kuhn as did the rapid state-sponsored, growth in the number of terrestrial television channels in France. This governmentsponsored, expansion of the French television system meant that the number of hours broadcast increased much faster than did the revenues broadcasters received. In consequence, the average expenditure per programme hour necessarily declined providing strong incentives to increase imports – to the extent that Cluzel acknowledged the impossibility of France’s television channels meeting French quota requirements: ‘les télévisions commerciales furent ainsi mises devant le choix de frauder ou de mourir’ [Commercial television was thus forced to decide between two alternatives: to cheat or to die] (Cluzel, 1993 p. 18). Clearly the number of UK television channels has also increased in the same period – but not by so much. Although there may formally be as many (or more) channels available to UK viewers as there are to French viewers in the UK, unlike in France, viewing, revenues and thus expenditure on programming are concentrated on two terrestrial channels, BBC1 and ITV, which together account for more than 60% of viewing, followed by two further terrestrial channels, BBC2 and Channel 4, and only then a sprinkling of cable and satellite channels. The state guided evolution of television in the UK and France has therefore followed radically different courses. In consequence, the UK television market is less susceptible to import penetration than is the French. Not least this is because the ‘Americanisation’ of British television took place in the mid 1950s with the establishment of Europe’s first commercial advertisingfinanced television channel with a consequential closer approximation of domestic television programming to popular taste.25 Commercial broadcasting in the UK began in 1955. The official history of the early days of Independent Television in Britain (Sendall, 1982) makes clear just how strongly committed were UK planners and regulators to establishing competition in broadcasting. As Sendall states ‘The dominant anxiety was to introduce competition between the contractors, as the Act required’26 (Sendall, 1982 p. 65). This commitment resulted in a system better adapted to delivering the ‘people’s television’ (Sendall, 1982 p. 136) sought by Robert Fraser (the first Director General of the Independent Television Authority – the forerunner of the present Independent Television Commission) than was the public service monopoly which preceded it and which distinguished other European systems thereafter. Fraser’s aspiration for ITV, though realised only in part, did succeed in establishing a distinctive ‘streak of earthy vulgarity’ (Sendall, 1982 p. 137) in British television which has endured to this day. Sendall makes clear how unusual was this British commitment to popular taste when compared to those of other contemporary European broadcasters; ‘Nervous, not to say hostile, members of the European Broadcasting Union, whose governments (excepting Luxembourg and Monaco) were uniformly opposed to broadcast advertising, were to refuse to accept any ITV contributions to Eurovision unless they 54

Locked in a Mortal Embrace were ‘clean feeds’ protected from advertising’ (Sendall, 1982 p. 100). ITV’s primary commitment, supported by the ITA, was to capturing an audience. Its Chairman justified the commitment to entertainment programming by stating, ‘You must capture an audience first of all. When you are established and secure you can gradually build up to a higher level’ (Sendall, 1982 p. 144). The success of ITV and the consequential decline in the BBC’s share of the UK television audience27 led the BBC to follow many of the initiatives of commercial television. In the UK a slow, early expansion and commercialisation of television strengthened the system as a whole and laid the foundations for the striking successes of British television drama in successfully combining demotic and elite culture. In France a later and stronger commercialisation subjected French television to much less healthy pressures. In the UK Americanisation was both positive and temporally distant; in France it is recent and destabilising. Moreover, its impact in France is amplified by the different linguistic and cultural formations of the two societies. France, and French television, is widely perceived to be more strongly governed than is the UK by high cultural values which, in spite of the fructifying influences of American cinema on the Nouvelle Vague and a host of other French cultural forms, perceive the influence of the USA (and UK) as uniquely malign. As Rigby and Hewitt (1991 p. 3) state ‘cultural legitimacy in France is profoundly connected with exclusively literary ideas of culture.’28 Further, France’s domestic policy emphasis, which has prioritised film so markedly, can only with difficulty be reconciled with the achievement of France’s pan-European politico-cultural goals. As Cluzel stated a perverse emphasis for television is more important: Après l’Europe économique, nous tentons […] de construire l’europe politique. Mais tout resterait fragile si nous ne réalisions pas sous sa forme moderne l’Europe culturelle ou, plus exactement l’Europe des cultures. De quels moyens disposons-nous à cet égard? Sans aucun doute le principal […] en est la télévision [After the economic Europe, we are attempting […] to build the political Europe. However, the whole enterprise is vulnerable if we do not also realise a cultural Europe in a modern form, or more exactly a Europe of cultures. How can we do so? Television is unquestionably indispensible]. (Cluzel, 1993 p. 148)

Audiovisual policy, even in the age of the ‘Information Society,’ is not simply a question of economic issues – of trade balances, matching of offer to demand, rates of innovation (aesthetic and in mode of production). It is also perceived – nowhere more than in France – to be a vector in the construction, or erosion, of collective identity, social solidarity and social cohesion. For much audiovisual policy is suffused with the nationalist presumption that polity and culture must be congruent (Gellner 1983) if political institutions are to be legitimate and stable. These assumptions are widely and deeply embedded in France, so much so that the vocabulary of French audiovisual commentators and policy makers is characteristically charged with military metaphors. Few more eloquently than Jean Cluzel. 55

Media and Identity in Contemporary Europe Language, Culture and Identity L’Histoire n’en finit pas, depuis des siècles, de raconter les batailles de France. Cellemilitaire de 1940 ne date que d’une cinquantaine d’années mais une autre fait rage depuis les années 70 et, cette fois-ci, parce qu’il s’agit d’une guerre médiatique, c’est l’identité culturelle de la France qui se trouve en jeu [Over the centuries, the story of France’s battles has been repeated. The military battle of France, of 1940, is only 50 years old, but a new one has been raging since the 1970s and this time, because it is part of a media war, it is French cultural identity which is at stake]. (Cluzel, 1993 p. 11)

Cluzel, as so often, succinctly epitomises views widely held in France by defining audiovisual policy as a matter of national survival. Cluzel’s military metaphors are pervasive. For example, in ‘A la conquête des marchés étrangers’ [The conquest of foreign markets] Jean-Pierre Landau (Director of the Department for Overseas Economic Affairs of the Economic Ministry of France) wrote, of audiovisual policy, ‘pour avoir gagné une bataille nous n’avons pas gagné la guerre’ [in spite of having won a battle we have still to win the war] (1994 p. 4). The Decaux report (a report to the Prime Minister by the Minister for Francophonie, Alain Decaux, titled ‘La politique télévisuelle extérieure de la France’) refers to ‘une offensive mondiale de l’audiovisuel français [a global offensive of the French audiovisual sector] (Decaux, 1989 p. 7) and to ‘La bataille mondiale des images’ [the global battle of images] (Decaux, 1989 p. 8). Nowhere have military metaphors been more eloquently used than in Jack Lang’s address to the 1982 UNESCO conference on cultural policy and cultural politics in Mexico City where he asserted: ‘Culture et économie: même combat.’ French concern over the Americanisation (or anglo-saxonisation) of the audiovisual sector is but a subset, albeit a major subset, of a more pervasive concern over what a Council of Europe publication on French cultural policy named ‘une anglophonie jugée envahissante’ [an invasive English language] (Council of Europe, 1988 p. 43). Lang’s own periods of ministerial office were neatly framed by two laws passed to defend the French language from the incursions of English: the Loi Bas-Lauriol of 31st December 1975 and the celebrated Loi Toubon of April 1994 – the Loi relative à l’emploi de la langue française. The growing presence of American programmes on French screens, however plausibly they may be explained by Government inspired changes to French television and by audience tastes, is the best known locus of French concern, but other telling symptoms of anglophone hegemony come readily to hand. Moeglin, for example, observes that in 1990 of 12 transnational European television channels 5 transmitted in English, another used English as one of its three languages, a seventh used no language and an eighth used several languages (including English). Moreover, of 96 national and regional television channels in the European Community 24 used English, more than used any other single language (Moeglin, 1991 p. 17). The ascendency of English is obviously assisted by the characteristics of audiovisual and other information markets. Films and television programmes (and indeed books 56

Locked in a Mortal Embrace and other printed works) are both non-rival products (consumption by one person does not exclude another from consumption of the same product) and are cheaply and easily reproduced and distributed. In consequence there are striking potential returns to economies of scale and strong incentives for producers to extend markets. Because the world population of English speakers is large and rich – markedly more so than the world population of francophones(see Wildman and Siwek, 1988) and because English is the world’s dominant second language (see Crystal, 1997), all other things being equal, English language information goods and services will do better than their francophone equivalents. Hence, there is less confidence among francophones in the merit of market outcomes; French recourse to the European Union as a source of allies in the construction of a bastion against the ingress of the invasion of English; and the endemic Franco-British squabbling over EU audiovisual policy. Moreover, France has experienced a striking decline in the international power and prestige of the French language.29 In this context, what Mortimer described as the English’s (sic) ‘mistake of sharing their language with a great power outside Europe’ [Mortimer, 1988 p. 19], is of course profoundly threatening. The English language, the culture which it bears and the audiovisual media which deliver language and culture to Europeans are therefore not only perceived to threaten European union but also European diversity. Hence France’s recourse to the European Union, where ‘French continued to strengthen its place in Community matters and France its influence in Europe’ (Thody, 1995 p. 95), and which France has consistently seen as a powerful potential support for its domestic efforts against an international anglophonie perceived to be profoundly threatening. Hence the reciprocal anglophone perception (in this instance originating from an Irishman) that ‘French thinking is nationalist at its core and federalist on the surface’ (O’Brien, 1992 p. 3). France’s concerns about the erosion of linguistic and cultural hegemony are sharpened by their distinctive experience of state building, one which again clearly differentiates France from the UK. It is in France that an assumption of the intimacy of the connections between cultural and political identity, and between broadcasting and national identity, is most clearly to be found. As Ritaine (1983 p. 13) stated ‘Dans le savoir politique français, la triade Peuple-Nation-Culture est centrale: la culture y est le fondement de la Nation’ [In French political thought, the triad People-Nation-Culture is central. Culture is the foundation of the Nation]. And Eugen Weber eloquently described the formation of the French state as indistinguishable from the creation of a strongly normative French national identity. He recounts, in Peasants into Frenchmen: The Modernization of Rural France (Weber, 1976), how cultural and linguistic convergence was enjoined and enforced by the state apparatus in Paris. Whereas the UK, contentedly or in teeth gritting harmony, is based on recognition of difference – the semi-official status of Welsh, the separate Scots legal and educational systems, for long a separate Parliament in Northern Ireland. The historical formations of France and the UK have thus been different. In one national history acceptance of difference (within limits of course!) is the basis of the state, in the other difference has consistently been seen to threaten the state’s integrity. Hence the different importance attributed to cultural difference, hybridisation, pluralism and pollution in France and the UK. 57

Media and Identity in Contemporary Europe If France represents a political history of the strong convergence between state and nation – of indissoluble coupling of cultural and political identity on a nationalist model30 – then the UK represents a different aetiology. The UK exemplifies a rather functionalist (Mitrany, 1975) pragmatic association of political units. In contrast to France the UK has demonstrated less concern for cultural unity and emphasised more the evolution, however messy, of practicable working arrangements. Evidently these distinct visions, grounded in two successful histories of state building, point to different and incompatible strategies in and futures for audiovisual (and other) policies in the European Union. A UK orientated to the minimalism (as defined by its Foreign Secretary Douglas Hurd) of: a Europe that respects cultural and political diversity, which only does those things at the European level which need to be done at that level, which is outward-looking, freetrading, democratic and flexible: a partnership of nations working together to advance their national interests. (Commission of the European Communities, 1997 p. 1)

is unlikely to agree with a France enthusiastically fostering the ‘ever closer union’ prescribed in the preambles to both the Rome and Maastricht treaties.

Conclusion The European audiovisual policies of France and the UK are thus both predictable and paradoxical. Predictable in that each country, soit Europhile soit Europhobe, has sought to make the European Union in its own image and in its own interests. In their European audiovisual policies France and the UK have sought (albeit with some significant inconsistencies and contradictions) to mirror their domestic regulatory and policy priorities and to reproduce, in a European context, their respective national experiences in state building as well as to promote policies that favour their respective domestic interests – interests that for the UK are almost wholly economic. Whereas for France, not only do similar economic considerations apply (albeit pointing to policies different to those of the UK), but the status and survival of the national language is perceived to be at stake. Moreover, France’s and the UK’s different experiences of state building point to opposed conclusions: for France to a necessary congruence between polity and culture, for the UK to a looser, incongruent, politico-cultural formation. Paradoxical in that, in spite of its almost contemptuous attitude towards the European Union’s audiovisual concerns, the UK has achieved considerably greater success in realising its policy objectives than has France for hers – in spite of France giving such matters a much higher priority. One would look for a long time to find a UK Minister of National Heritage making so firm a commitment as did François Léotard when Minister of Communications: ‘Ma priorité est de faire de la France la plaque tournante de l’audiovisuel en Europe’ [My priority is to make France the audiovisual centre of Europe] (Léotard, 1988 p. 61). However, in spite of the salience of the audiovisual in France’s European policy portfolio, it may be that its policies are fated not to succeed – as Cluzel uncomfortably 58

Locked in a Mortal Embrace acknowledged: ‘dans le domaine culturel, l’Europe est un leurre’ [in the cultural domain, Europe is a delusion] (Cluzel, 1993 p. 126). The UK’s success is due to a combination of factors: the fundamental structure of a European Union which favours the operation of markets rather than dirigisme; the political structure of the Union which has allowed a minority of states to exercise power via blocking minorities or even through vetos; the inherently greater strength of the UK audiovisual sector.This strength is itself due to a variety of factors including the inherent comparative advantage of the English language, the competitive advantages accrued from early and slow commercialisation of television and the absence of the over-expansion of the television sector which vitiated French television in the eighties – a television perennially weakened by its subordination to the interests of the film sector. However, the UK may yet pay a heavy penalty for its historic policies of abstentionism and obstruction. At best it is fated to respond to the agendas of others and thus to construct success solely as an ability to preserve UK television viewers from the torments of too many Jacques Tati films. At worst it may find itself outnumbered and outmanoeuvred by a successful French construction of a panEuropean alliance of the other EU Member States, all of whose domestic audiovisual environments share, to a greater or lesser degree, the problems of the French and few of the advantages of the British.31 As the Financial Times’ commentator on European Affairs, Ian Davidson, stated the UK’s European policy has been a series of blunders based on a profound failure to devise a European strategy which can mesh plausibly with the other forces in place. And that failure in turn is the direct consequence of the defensive and adversarial vocabulary adopted consistently for the past 40 years by almost the entire political class in Britain towards the European Community. (Financial Times 12.12.1991 p. 3)

The audiovisual sector is no exception to this general rule. The UK may yet pay a heavy price for indulging its perennial penchant of playing the awkward partner (George 1990). But, indisputably, the Franco-British dialogue of the deaf will continue at high volume even if future outcomes remain uncertain.

Acknowledgements My thanks to Régine Chaniac, Patrice Flichy, Anne Jäckel, Jean-Pierre Jézéquel for assisting me to gather information included in this paper and for their generous sharing of their knowledge and ideas and to Marie Viennot for her considerable assistance with my translations from French. They are not responsible for any errors of commission or omission or for the conclusions I have reached. This chapter was first published in French as ‘Locked in a mortal embrace. Les politiques audiovisuelles européennes du Royaume-Uni et de la France’ in Reseaux. 1998 N 87. Janvier-Février pp. 137–62. Paris and, in a shorter version, as ‘The European Union Audiovisual Policies of the UK and France’ in Television Broadcasting in Contemporary Britain and France. (1999) ed. M. Scriven and M. Lecomte. pp. 198–221. Oxford. Berghahn. 59

Media and Identity in Contemporary Europe References 1 I use ‘audiovisual’ here as a convenient synonym for film and television. 2 A telephone poll of respondents in all European Union states conducted in May 1994 showed that 27% of French respondents named the UK as the least trusted member of the Union – more than nominated any other Member State and that 44% of British respondents named France as the least trusted member of the Union – more than nominated any other Member State (Financial Times 1.6.1994 p. 4). 3 For an extensive discussion of EU audiovisual policy see Collins, 1994. 4 Although the principal consequence of the increased demand for programming has been an increase in the volume of US programming on European screens it is not the only one. European producers have recycled old works (e.g. the BBC on UK Gold), low cost production methods have been developed (e.g. by Endemol in the Netherlands which is now Europe’s largest independent producer), new, low cost, European subject matter for programmes has been found (e.g. actuality footage of emergency services in action, recordings from security and traffic monitoring cameras, sports that were formerly not shown on television) and so on. 5 Lang became Minister of Culture in 1981, a post he held for most of the next decade: he was Minister of Culture from 1981–86 when (during a brief Conservative interregnum between 1986 and 1988) François Léotard became Minister. From 1988 to 1993 Lang was Minister of Culture and Communication. He was succeeded (as Minister of Culture) by Jacques Toubon. 6 Cluzel is a member of the Sénat and was described by Wolton (the Directeur du Laboratoire

7 8

9

10

11 12

13

‘Communication et Politique’ du CNRS) as ‘le sénateur spécialiste, incontournable, du domaine de l’audiovisuel’ [the specialist senator, whom you cannot bypass, of the audiovisual domain] (in Cluzel, 1993 p. 5). The article by Nöel du Payrat, from which I have quoted, appeared in ‘Les cahiers de l’audiovisuel’ – a journal founded by Jean Cluzel. A striking, and from the French point of view, perverse consequence of Television without Frontiers was the requirement for France to weaken its own domestic TV French language content quotas which discriminated against European works in languages other than French (Cluzel, 1993 pp. 59–69). Unsurprisingly France has perceived Television without Frontiers to disadvantage ‘aussi gravement nos producteurs et nos diffuseurs’ (Cluzel, 1993 p. 13). The UK Ministries responsible for European audio-visual policy had vigorously attempted to prevent the establishment of the MEDIA programme. However the Foreign and Commonwealth Office counselled that a UK veto should not be exercised over a comparatively trivial Community issue. The total votes required for decisions changes with the membership of the EU. Currently, with a 15 member EU, a qualified majority requires 62 of the 87 votes in the Council of Ministers (European Council), a simple majority requires 44 votes and a blocking minority is 26 votes. The European Audiovisual Observatory estimated the European audiovisual trade deficit grew from $2,1m in 1988 to $6,3m in 1995. Lang’s specific proposals for protection for the film industry were realised in Article 7 of the Television without Frontiers Directive, for content quotas in Article 4 of the Television without Frontiers Directive (Council of the European Communities 1989), and for subventions in the MEDIA programme of the European Community and the Eurimages programme of the Council of Europe. The audio-visual Eureka was established following the Assises de l’audiovisuel in 1989. The data cited should be used with caution. I make a snapshot comparison whereas trade statistics sometimes fluctuate significantly year by year. For example in 1994 the share of national productions in

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Locked in a Mortal Embrace UK admissions more than doubled to 10.5% (CNC, Info N 256 p. 66) – France has clearly been less penetrated by US films than have other EU member states (foreign films’ share of US admissions was 0.75% in 1994 (CNC, Info N 256 p. 66). Moreover, there are difficulties of classification – on what criteria is a particular work classified as a film and another work a television programme? Are the same criteria used in France as in the UK? How is a co-production classified; as an import or an export? Comparisons may be distorted by fluctuating exchange rates and by the rebasing of national statistics (the basis for UK statistics changed in 1996) etc. And, to my regret, I have not been able to secure statistics for French audio-visual imports comparable to those available for the UK (see, however, the European Audiovisual Observatory Statistical Yearbook). However, this data, although imperfect, is suggestive. It shows that, contrary to general belief, the UK film sector enjoys a more favourable trade balance than does the UK TV sector, that the French television sector is a significant exporter, that, although the UK film exhibition sector has been considerably more completely penetrated by US productions than has either UK television or French film, it enjoys an export performance superior to either UK television or French film and so on. 14 A consultant’s report shown to the author in confidence estimates that the UK spends c15% of its total television programme spend on imports whereas France spends 27% (and Germany 12%). 15 Although the total revenues generated from cinema admissions considerably exceeds video revenues the return to producers from these two exhibition media is similar. 16 Wallon is editor of the house journal of the CNC, ‘CNC Info’ and author of a 1994 report for Jacques Toubon, then Minister of Culture and for La Francophonie titled ‘Pour une stratégie d’exportation et de diffusion du cinéma français.’ 17 Throughout the 1980s the UK had a positive balance of audio-visual trade which went into deficit in 1990. The 1993 deficit was the lowest UK audio-visual deficit of the 1990s. 18 However, too much should not be made of changes in year by year levels of production – not least because a major factor in determining UK levels of film production is the £/$ parity. 19 In February 1997 Screen Digest foreshadowed the privatisation of the principal publicly owned television channel, France 2 (Screen Digest, February 1997 p. 28). 20 The favoured child of the UK regulator, BSB, was ignominiously forced into an unequal merger with Sky Channel to form BSkyB. 21 A trend exacerbated by the ‘freezing’ of the French production archive in consequence of French copyright law and in spite of the new revenues generated by Europe’s first and most successful pay television service, Canal +. 22 These estimates are derived from a UK consultant’s study made available to the author in confidence. 23 I make a categorical analytical distinction between film and television for convenience. Of course, firm distinctions are often hard to draw – not least because of the film’s importance in television’s programming strategies. 24 KPMG estimated EU audiovisual expenditure in 1994 at c 24,250m of which cinema attendance accounted for c9% of the total, broadcast television c72% with video rental accounting for a further c18% (KPMG, 1996 p. 5). The strikingly greater economic importance of television relative to film which the KPMG data suggests is misleading, in that KPMG consider here only the revenues from licence fee and subscription funded television, whereas the television total should be increased by the revenues of advertising financed television. 25 The successful adaptation of British television to the forces of commercialisation and Americanisation was not a peculiarly British experience. Rogers and Antola (1985) have claimed that, in spite of the

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Media and Identity in Contemporary Europe economic advantages of American producers and the low prices of imported American programmes, television producers in Latin America have successfully domesticated their television schedules. They pertinently cite Pool’s general proposition that ‘domestic producers, as soon as they learn to produce the kind of attractive things that had come from abroad, have a distinct advantage in the competition for an audience’ (Pool, 1977 p. 141) in explaining ‘how telenovelas have come to replace imported US television programmes in Latin America (Rogers and Antola, 1985 p. 25). In fact, Rogers and Antola’s findings extend forward an older established theoretical trajectory than they acknowledge. Pool, on whose work they draw, refers to Karl Deutsch’s (1953) general proposition that introduction of exogenous information into a given context first provokes a decline in indigenous works but, second, tends to stimulate indigenous production. 26 The regulators’ aspirations were only partially fulfilled; the Peacock committee justly described UK television in the early 1980s as a ‘comfortable duopoly’ and acidly remarked that ‘the viewer’s or listener’s main function is to react to a set of choices determined by the broadcasting institutions’ (Peacock, 1986 para 577). However, my point is that in the UK, although the system has been driven by broadcasters’ definition of consumer choices, this supply-pushed set of options seems to have been closer to consumer demand than has been the case in other jurisdictions. I believe that this is due in important part to the early presence of competition, however imperfect, in the UK broadcasting order. 27 In 1956 60% of London respondents polled expressed a preference for commercial television and only 16% for the BBC (Sendall, 1982 p. 249). 28 See Emanuel 1992 for an excellent account of the conceptions of culture which have informed French television. 29 Thody sketches the decline of French thus: ‘From 1714 onwards, with the Treaty of Rastadt, the French version of treaties took precedence over the Latin, and this remained the case until 1919, when French had to accept joint first place with English in the Treaty of Versailles. And in 1945 the French had to fight hard to have their language accepted alongside Chinese, English, Spanish and Russian as one of the working languages for the United Nations Organisation, only to see the Bandung conference of newly independent, uncommitted states conduct all its proceedings in English in 1955’ (Thody, 1995 p. 90) 30 Counter indications can, of course, be found. For example, Lionel Jospin, in his inaugural speech to the Assemblée Nationale as Prime Minster on June 19th 1997, qualified his affirmation of French political sovereignty in Corsica, as an integral part of Metropolitan France, with recognition of the legitimacy of Corsica’s linguistic and cultural distinctiveness. Jospin stated: ‘En Corse – comme partout ailleurs sur le territoire national – le gouvernement veillera au respect de la loi républicaine […] Le gouvernement encouragera l’affirmation de l’identité culturelle de la Corse et l’enseignement de sa langue’ [In Corsica – as everywhere in France – the Government will safeguard the rule of law […] The Government will encourage affirmation of Corsica’s cultural identity and the teaching of its language’ (cited in Libération, 20.6.1997 p. 6). 31 But, whilst other EU Member States might appear to share France’s concerns appearances can deceive. For the European Union quotas, so vigorously espoused by France in its own and Europe’s interest, turn the domestic audiovisual markets of small European Union states, states which lack the audiovisual capacity to supply their domestic markets, into chasses gardées for European Union Member States with strong audiovisual sectors – for France and the UK. Moreover, quotas limit filmgoers’ and television viewers’ access to the American programming which, by and large, as Silj found are preferred to rival offerings from other European Union Member States. Silj’s pan-European research team, assembled by the Italian Council for the Social Sciences,

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Locked in a Mortal Embrace analysed ‘the contents and narrative structures of television fiction in European countries’ (Silj, 1988 p. 1). It found that ‘national programmes occupy the top positions in the audience ratings, [but] the public’s second choice never [original emphasis] falls on programmes produced by other European countries. American is the lingua franca of the European market of television fiction’ but that ‘reality was much more diversified than we had expected’ [original emphasis] (Silj, 1988 p. 199). Or, as a Communist deputy stated in the April 1994 debate on the Loi Toubon in the Sénat, ‘Ce n’est pas l’Amerique qui nous envahit: c’est nous qui l’ adorons’ [It’s not America that invades us, it is we who adore it] (Ivan Renar cited in Thody, 1995 p. 81)!

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5

Public Service Broadcasting and Freedom

Introduction Perhaps we all know what we mean by ‘public service broadcasting.’ However, concepts that are taken for granted often prove troublesome, for what one person may believe a term to mean is often not what others understand by it. In Australia and Canada, what Europeans would generally name ‘Community Broadcasting’ is known as ‘Public Broadcasting,’ and in Australia what Europeans know as public service broadcasting is known as ‘National Broadcasting.’ The meaning of ‘public service broadcasting’ has been shaped by the memory and past experience of the services that have gone under that name. In Eastern and Central Europe there has been almost no experience within living memory of public service broadcasting in the sense understood by Western Europeans. In Western Europe experience of public service broadcasting ranges from systems closely associated with the state and used as an instrument of central state power, to highly regionalised and pluralistic systems. Even in the United Kingdom, where, thanks to the international prestige and longevity of the BBC, what comes closest to an internationally accepted normative institutional definition of public service broadcasting is to be found, there is scant consensus on the meaning of ‘public service broadcasting.’ Not least because the advertising-free BBC, the for profit advertising financed ITV, and the not for profit advertising financed Channel 4/S4C all claim the status of public service broadcasters. The most recent UK Government enquiry into broadcasting, the Committee on Financing the BBC (the Peacock Committee), reported (Peacock, 1986 p. 6) that there is no ‘simple dictionary definition’ of public service broadcasting. There are two sources to which we can turn for guidance on the meaning of public service broadcasting: one source is a codification of what public service broadcasting ‘is,’ and the other is a theoretical systematisation of what public service broadcasting ‘ought’ to be. Definitions of ‘is’ mostly derive from post hoc reflections on the practice of public service broadcasters and reflect the norms of the historical and social context in which the definitions are produced. Peacock (1986 p. 7) had recourse to a list of eight characteristics constructed by the Broadcasting Research Unit (BRU nd) derived from ideas offered by established broadcasters and commentators whom it polled. More recently Keane (1991 p. 117) has cited the list of characteristics which a senior BBC executive, Jonathan Powell, judged as defining public service broadcasting. Blumler (1992 pp. 7–14) has also listed the characteristics which define public service broadcasting: a comprehensive remit, generalized mandates, diversity pluralism and range, cultural roles, place in politics and non-commercialism.1 Not surprisingly the characteristics of public service broadcasting which these UK based broadcasters and 65

Media and Identity in Contemporary Europe scholars identified fitted the established broadcasting institutions in the UK rather well. There is a high degree of communality in the content of such post hoc lists (indeed Blumler cites the Broadcasting Research Unit’s definitions at a number of points). Yet, as Negrine has commented (Negrine, 1989 p. 106), it is seldom clear how far definitions such as these, derived from the collective historical ‘isses’ of public service broadcasting, correspond to a historical definition of public service broadcasting, to a present reality or to an ideal type. Are these descriptive or value criteria? A second approach has been to identify a role for public service broadcasting and from that derive a definition which will, propter hoc, tell us how public service broadcasting ‘ought’ to be. This approach is to be preferred for it does not lend itself so readily to the fetishisation of the historical practice of particular institutions. Instead, it generates clear value criteria and is more open, at least potentially, to recognising the need for innovation in institutional forms and practices. The most important approach to defining public service broadcasting has been by neo-Habermasians2 who have argued that public service broadcasting should be the institutional guarantor and instrument of the modern public sphere. These arguments were introduced to the English language debate on broadcasting by Garnham in 1986 (in Garnham, 1990 pp. 104–14) and later by Keane (1991). Earlier Garnham had used the term ‘public sphere’ (Garnham, 1990 p. 121) in an influential article first published in 1983 (Garnham, 1983 and reprinted in Garnham, 1990 pp. 115–35) which discussed rival modes of organisation and funding of broadcasting – Public Service versus the Market. Much subsequent discussion of broadcasting policy (see inter alia Blumler, 1992, Keane, 1991, Wilson, 1989) has followed Garnham in arguing that organisation of broadcasting on public service principles better serves human liberty and fulfilment, that the market and public service are rival and incompatible principles of organisation, and by using Habermas’ notion of the public sphere as the criterion of value against which rival systems are to be judged.

Public Service, the Market and the Public Sphere Whatever we mean by public service broadcasting we know that it is under siege from a powerful army of market forces. In one of the most influential academic discussions of contemporary broadcasting policy Garnham argues (in his Public Service versus the Market, Garnham, 1990) that augmented emphases on market mechanisms, rather than public service mechanisms are inimical to the public interest. For, he claims, public service principles of organisation are superior ‘to the market as a means of providing all citizens, whatever their wealth or geographical location, equal access to a wide range of high-quality entertainment, information and education, and as a means of ensuring that the aim of the programme producer is the satisfaction of a range of audience tastes rather than only those tastes that show the largest profit’ (Garnham, 1990 p. 120). The market has, Garnham argues, led to diminished diversity in a reduction in the number of enterprises which control (or at least very strongly influence) the production and circulation of information and culture, and to inequitable relationships between 66

Public Service Broadcasting and Freedom dominant, and metropolitan, enterprises at the expense of subordinate, and peripheral, entities. These market driven inequities and inequalities in turn have sustained pervasive and deep-rooted social inequity and social inequality . Moreover technological change promises, contrary to the libertarian and liberatory rhetoric of its advocates, to accelerate these processes of actual and relative deprivation. Here there are clear communalities between the characteristics identified by Blumler et al. (if we see these as value criteria rather than simply descriptive identifiers of a particular ensemble of historical practices). However, whilst refuting the emancipatory claims made for the market, Garnham persuasively argued that debate about broadcasting policy has been stultified by being conducted in terms of a State/Market dualism (Garnham, 1990 p. 106 and Garnham, 1984 p. 6). His arguments for a third term,’the public sphere,’ (here using a notion explicitly borrowed from Habermas) endeavour to escape that antinomy and to identify a ‘space for a rational and universalistic politics distinct from both the economy and the State’ (Garnham, 1990 p. 107). Of course Garnham’s argument was not simply for an abstract third categorical field intellectually distinct from the category systems signified by the terms ‘state’ and ‘market’ but in favour of what he, and others (see inter alia Keane, 1991) have designated the institutional embodiment and guarantor of the modern public sphere: public service broadcasting. Public Service Broadcasting is, Garnham argued, an institutional practice which mediates between political and corporate control and is bound neither by the imperatives of profit maximisation nor the maximisation of political power; it offers the best hope of realising a modern public sphere. The importance of Garnham’s essay is inescapable. Habermas’ category, which Garnham introduced to anglophone academic discussion of broadcasting policy, is now used pervasively. And the concept of the public sphere has sanctioned an intellectual emancipation from dualistic state/market either/or distinctions and permitted exploration of the plurality of institutional structures and ideological practices in broadcasting. For public service broadcasting is, like other intermediate institutions such as the universities and the church, impossible to categorise simply as an expression of a dualistic either/or, state or market, system. However. several problems arise from the triadic system which Garnham introduced. First, whilst a third term conceptually mediating between state and market, may be intellectually productive and corresponds to a distinctive ethos in (at least some) broadcasting institutions at (some) moments in history, the notion of the public sphere helps only to a limited extent when concrete questions of broadcasting policy and organisation arise. For how is broadcasting to be funded if not by either the state3 or the market? How are broadcasters and broadcasting institutions to be responsive to their users if not via the institutions of state and market? Second, whilst public service broadcasting has (but not in all jurisdictions and at all times) been a genuinely intermediate institution embodying a third way between state and market neither does its historical practice correspond to what a genuine public sphere would demand nor are its established structures necessarily best fitted for the realisation of a future public sphere. It is difficult to reconcile Garnham’s claims for the success of public service broadcasting in satisfying audience tastes with the dramatic 67

Media and Identity in Contemporary Europe loss of audience share experienced by European public service broadcasters when faced with the loss of their national monopolies to commercial competition: first the BBC in 1955, then RAI (Radiotelevisione Italiana) to Berlusconi and others, and latterly Dutch and German public broadcasters to RTL (Radio Television Luxembourg). Third, there are well-known difficulties with Habermas’ notion of the public sphere itself. Keane (1991 p. 36), for example, argues that Habermas sentimentalised the heroic bourgeois era and its freedoms and pluralism at the expense of a recognition of the positive elements in proletarian and contemporary structures and practices and thus conceived later history as a decline from a bourgeois golden age. Similar arguments have been made about the actual practice of public service broadcasters which has been, so the argument runs, a highly imperfect approximation to a public sphere (see inter alia Docker, 1991, Glasgow University Media Group, 1976, Hjarvard, 1991). Indeed Garnham himself has recognised that the actual practice of public broadcasters is a highly imperfect actualisation of Habermas’ notion of a public sphere. And fourth, Habermas notions are ones of, as Bauman put it, ‘society shaped after the pattern of a sociology seminar, that is, that there are only participants and the one thing that matters is the power of argument’ (Bauman, 1992 p. 217). No more than life is broadcasting reducible to the condition of a sociology seminar. The earnest attempts of European public service broadcasters to shape broadcasting to a condition of a seminar have created opportunities for competitors, offering a more demotic and carnivalesque programme diet than did public broadcasters, to attract listeners and viewers away from the seminar to the funfair. In his 1983 article Public Service versus the Market, Garnham uses the terms public and private spheres in a rather unHabermasian way. He establishes the public and private spheres as antitheses and argues that the private sphere is expanding at the expense of the public sphere as ‘commodity exchange invades wider and wider areas of social life’ (Garnham, 1990 p. 121). For Garnham, the private and public spheres are chiefly distinguished by ownership. The private sphere is a sphere of private ownership which has appropriated resources and discursive space which formerly had been public. This line of argument suggests that there is a finite resource over which private and public spheres compete and that the growth of the private sphere is analogous to the private enclosure of common land. And that the private is inferior to the public. Whereas for Habermas expansion of the private sphere could be liberating. Activities which once had been public were privatised and the domain of personal autonomy increased. Habermas gave the example of the secularisation of society in which religion became a private matter (Habermas, 1974 p. 51). The privatisation of society which Habermas described was one in which the private sphere came to stand apart from the state as a countervailing force. ‘Society, now a private realm occupying a position in opposition to the state, stood on the one hand as if in clear contrast to the state’ (Habermas, 1974 p. 52). Indeed for Habermas it seems that the privatisation of society was the means whereby a public sphere came into existence. He continues, ‘The bourgeois public sphere could be understood as the sphere of private individuals assembled into a public body’ (ibid.). And Habermas 68

Public Service Broadcasting and Freedom states explicitly that ‘Today newspapers and magazines, radio and television are the media of the public sphere’ (Habermas, 1974 p. 49). However he does not specify that public ownership of the media is necessary to (or private ownership is incompatible with) a well-functioning public sphere. Whereas for Garnham, and thus for a major current in the broadcasting policy debates of the 1980s and 1990s, privatisation is the appropriation of publicly owned resources by private (whether natural or legal) persons and the public interest in a well-functioning public sphere is likely to be most effectively served by public service broadcasting. Certainly there is an interdependence between public service and commercial broadcasting (in any market in which both types of broadcasting service are offered) and changes to one has cross impacts on the other. However it is not clear that the game played between public and commercial broadcasting is a zero sum game. The possibility which Habermas seems to countenance, a public sphere delivered by the market and privately owned institutions, is seldom considered in academic discussion of public service broadcasting. Indeed discussion in the UK has argued that corporate concentration and cross ownership of contemporary media are characteristic of modern media markets, that therefore market organisation of broadcasting cannot be reconciled with democracy. Murdock states (Murdock, 1990 p. 2) that ‘technological change and privatization policies are creating massive communication conglomerates with an unrivalled capacity to shape the symbolic environment which we all inhabit’ and, in consequence of this shaping of our symbolic environment, ‘an essential resource for developing and deepening democracy’ is denied to media users.4 Powerful though such arguments are they demand to be tested both empirically and theoretically. Are there actual instances of the public sphere delivered by privately owned institutions, the possibility which Habermas envisaged? And if not is their absence necessary or contingent? Could a public sphere delivered by the market and privately-owned institutions exist in different circumstances?

The Market Although the criteria on which the presence or absence of a ‘public sphere’ can be established are not clearly specified prima facie there are examples of a market public sphere which can be found in practice, the possibility of which was theoretically established by Habermas. The UK’s elite press is a case in point: five daily newspapers each owned by separate corporations and each with a distinctive political position (albeit, of course, within the framework of the UK’s parliamentary democracy and capitalist economy). However it is certainly more difficult to identify a comparable case in broadcasting; an obvious candidate is the UK ITV system in its pre-1990 Broadcasting Act form. However this example need not concern us too long, for the ITV system was very highly regulated and built around a system of monopolies. Certainly it was privately owned (and very profitable for its dominant members) but conformed to almost none of the criteria which neo-classical economists constitute as the defining characteristics of a well-functioning competitive market (see Gellhorn and Pierce, 1982 for a useful guide). 69

Media and Identity in Contemporary Europe If the actual presence of a broadcasting public sphere delivered through privately owned institutions is at best uncertain then we must turn to the theoretical arguments. Powerful arguments for reorganisation of UK broadcasting on market lines have recently been advanced. The most important of these, both in intellectual coherence and public impact, is the Peacock Report (Peacock, 1986). Market advocates claim that information media systems which are organised on market principles are less subject to despotic abuses of power than are systems that are run and/or regulated by the state or quasistate agencies. Peacock anathematised UK broadcasting as a ‘comfortable duopoly.’ Broadcasters had captured and used the system for their own benefit rather than to serve viewers and listeners. Peacock commented that the impression given by broadcasters is ‘that the viewer’s or listener’s main function is to react to the set of choices determined by the broadcasting institutions’ (Peacock, 1986 Para 577). Essentially Peacock posed the problem of the guardians: who, and how, is to control those who control? The answer was consumers via the medium of a well-functioning market. Establishing a market-based broadcasting system was therefore advocated as a means to extend human liberty. The Peacockian analysis (though not made in explicitly Habermasian terms nor using Habermas’ central category, the public sphere) seems therefore to have as much in common with Habermas’ arguments than does that of the neo-Habermasians who have adopted Habermas’ category but without acknowledging the place Habermas ceded to the private sphere. Although there are clearly differences between the argument structures of Habermas, the neo-Habermasians and market theorists, there seems to be as much in common between them as separates them. Not least a considerable degree of communality between the ends sought by neoHabermasians and those sought by advocates of well-functioning media markets. Indeed one of the principal authors of the Peacock Report, Samuel Brittan,5 has argued that it was precisely the capacity of the market to enhance liberty, at the expense of state power, that led the Conservative Government which had commissioned the Peacock Report to ‘kick it into the long grass’ (a UK Government Minister quoted in the Financial Times 4.7.1986). Brittan stated that in putting forward the idea of a free broadcasting market without censorship, Peacock exposed many of the contradictions in the Thatcherite espousal of market forces. In principle, Mrs Thatcher and her supporters are all in favour of de-regulation, competition and consumer choice. But they are also even more distrustful than traditionalist Tories such as Douglas Hurd of plans to allow people to listen and watch what they like, subject only to the law of the land. They espouse the market system but dislike the libertarian value judgements involved in its operation. (Brittan, 1987 p. 4)

To redress the harm which had (supposedly) ensued from elite capture of UK broadcasting Peacock advocated a system dedicated to ‘enlarge the freedom of choice of the consumer and the opportunities available to programmers to offer alternative wares to the public’ (Peacock, 1986 para 547). Peacock argued that ‘The fulfilment of this goal so far from being incompatible with public service activities positively 70

Public Service Broadcasting and Freedom requires them in a sense of public service’ (ibid.). It was in an attempt to realise these emancipatory goals that Peacock recommended that ‘British broadcasting should move to a sophisticated market system based on consumer sovereignty’ (Peacock, 1986 p. 1). The market, and the power it offered consumers over producers, was proposed as the solution of the problem of guarding the guardians. It is important to note that Peacock’s faith in the market was equalled only by its mistrust of the state. The Peacock report counselled against breaking up the BBC because the several small institutions which would ensue were thought to be less able to stand up to Government pressure than a single large institution. However, Peacock has had little more influence on academic discussion of broadcasting policy than it had on the UK broadcasting system, whereas Habermas’ ideas have been used as the principal foundation for recent attempts to relegitimise public service broadcasting as an institution and practice constrained and directed neither by the state nor the market. Here the arguments of the neo-Habermasians have force, for public service broadcasting has (as have other ‘intermediate institutions’ such as the universities and, depending on how political is one’s definition of the state, the law) sometimes demonstrated remarkable independence (the counterindications should also not be forgotten) of both political and commercial power centres. Moreover, the establishment of a Peacockian broadcasting market which used new technologies to reduce barriers to entry to the broadcasting market (thus augmenting competition) to establish subscription funding for broadcasting and thus to break the power of (either or both) advertisers and the state over broadcasting and enable viewers and listeners to signal their desires (and the intensity of their desires) to suppliers, but would not maximise consumer welfare. Developments such as these, albeit not in the fully realised form envisaged by Peacock, have indeed increased the number of channels among which European viewers can choose, and have introduced novel forms of programming and scheduling to European viewers, although they have also undoubtedly excluded consumers from services to which they formerly had unrestricted access. That the uptake for such new services by poor viewers has been higher (at least in the UK where the majority of subscribers to satellite television subscription services are in C2 and D social groups) than by wealthy viewers, lends credibility to claims that European public service broadcasting had been captured by elites. Garnham’s representation of Habermas to the scholarly community of broadcasting analysts was therefore timely and productive. However its writing antedated both publication of the Peacock report and the striking growth in ‘external pluralism’ in European broadcasting in the late 1980s. Yet Garnham’s salutary and productive rejection of a state/market dichotomy has, in practice, come to be replaced by a public service/market dichotomy. However discussions of broadcasting conducted under the new rubric have no more considered the extent to which the established qualities and historical achievements of public service broadcasting derive from an interaction and complementarity between public service and market institutions and principles than did that which took place under the old.6 (And neither has the obdurate difficulty of disengaging public service broadcasting and public service broadcasters from the state on which they depend so 71

Media and Identity in Contemporary Europe much been sufficiently addressed). Here the UK case is exemplary (though far from being the only case in point). It is generally accepted that the advent of commercial television in the UK in 1955 was not, as Lord Reith anticipated, a contemporary equivalent of the Black Death (see House of Lords Hansard, 22.5.1952) but revivified the BBC’s output, not least in the major genres of drama and news.

Isses and Oughts We have then two major approaches to the discussion of public service broadcasting, one fundamentally empirical (which identifies the common characteristics which have notionally distinguished public service broadcasters) and one fundamentally theoretical (which establishes a role for public service broadcasting in the polity and the necessity for that role to be played well if anterior social goals – democracy, freedom and the like – are to be achieved).7 Each of these approaches requires assessment in terms of their theoretical coherence and their capacity to organise and make coherent the miscellany of past practices and inform our understanding of future possibilities. Both stand in opposition to a powerful, rival, contemporary discourse which advocates the market as a means of allocating resources and matching offer to demand. If it is actual institutional practice which is at stake then the arguments and advocacy of the champions of public service broadcasting such as Blumler, Garnham, Keane et al. can be verified or falsified through a process of empirical historical scrutiny similar to the interrogation which they have visited on the arguments and advocacy of market theorists. But if their referent is not actual practice, but rather an ideal, then their arguments demand to be interrogated on the basis of their fundamental theoretical presuppositions. For, just as the mythical well-functioning market of neo-classical economists would undoubtedly maximise welfare, so too does the public service broadcaster of theory embody all the independence of other power centres, sensitivity to listener and viewer demand, and cultural innovation, diversity and quality that one might ask Father Christmas for. In either case, difficulties arise from a schematised opposition between market and public service. There are striking similarities, as well as differences, between the market and public service theorists and the long institutional histories of mixed market/public service broadcasting regime regimes. The elision of categorical differences is most striking in respect of the United Kingdom for, of European states the UK has certainly had the longest history of mixed market/public service broadcasting, and, with the exception of Canada and Australia, probably the longest experience of a mixed system of any state. Neither the empirical nor theoretical approaches seems to be adequate to guide future policy development. However the empirical approach has valuably identified the general historical characteristics of a distinctive set of twentieth-century institutions spawned by Europe and exported from there to all the major societies, except the USA, which trace their origins to Europe. The theoretical approach has identified a particular social goal for broadcasting and argued that the actual historical practice of the intermediate institutions which we know as public service broadcasters (including the 72

Public Service Broadcasting and Freedom national broadcasters in Australia) has, at least in part, realised the goals of a public sphere. The second, theoretical, approach offers a better basis for analysis and evaluation of both the historical achievements of public service broadcasters. The empirical approach has offered a measuring rod derived from the aggregate historical performance of public service broadcasters. Whereas, in spite of the difficulties that have attended the appropriation of Habermas’ notion of the public sphere and its identification with the historical practice of public service broadcasters, concepts (in this instance Habermas’ notions) generated independently of the institutions and practices which they measure offer the possibility of transcending the dead weight of historical ‘isses’ and addressing the fundamental issues of ‘oughts.’ Here we return to some common ground between the marketeers and the defenders of public service broadcasting, the public sphere and the public sector. All hold in common the values of pluralism (diversity) and freedom. Keane’s The Media and Democracy (1991) rebuts the claims made for the market as an emancipatory agency. He examines the history of press and publishing liberty and the extent to which the whig view of the history of printing and publishing (that licensing, prior restraint and despotic suppression of opinion have given place to liberty of expression) can be sustained. Keane argues that the major arguments given for liberty of the press are inadequate for the formation of contemporary policy, for they insufficiently take into account the central contradiction which faces liberal democracies – how to deal with exclusivist doctrines which do not reciprocally acknowledge the tolerance which liberal democracy accords to different exclusivisms. He also contends that the history of the media and democracy does not support a whiggish optimistic progressivism. For him, the history of the media is one of oligarchy. Keane further scrutinises the analogy (on which Peacock drew) between publishing and broadcasting and the extent to which freedom will be served by the reorganisation of broadcasting on market lines. Keane’s study therefore considers the central propositions which underpin contemporary broadcasting policy and theory. It does so by foregrounding the theoretical ‘oughts’ which are grounded in the historical ‘isses.’ The key theoretical ‘oughts’ which he identifies are liberty and equality which he judges to be unsafe in market liberalism (Keane, 1991 p. 182). Thus the creation of a ‘free market place of ideas,’ though admittedly a valuable defence against despotism exercised by political authorities, cannot be a complete answer to problems of information and communication policy. Keane gives a reasoned rejection of the claims that the market will advance liberty and equality, but offers little on which to build other than hortatory calls for a renewed public service broadcasting. Quite what that is to be remains unclear; it is certainly not the same old things that are being invoked. Something different is definitely called for, but what concretely is proposed is indeterminate (see Scannel, 1992 for a like judgement). But few have done better than Keane, for the problem of funding broadcasting via a third way, neither state nor market, and ensuring that broadcasting (and broadcasters) are accountable to the viewers and listeners they serve are intractable.8 73

Media and Identity in Contemporary Europe Yet Keane has undoubtedly advanced our understanding, and thus the debate about public service broadcasting, by placing this debate in a historical context and in identifying fundamental value criteria for the assessment of the performance of media enterprises and the making of media policy. In spite of Keane’s call to arms on behalf of public service broadcasting his most important message is that the fundamental question is not ‘public service or the market?’ but rather, ‘which is the best institutional means of securing liberty and equality?’ Here the values which Keane and his libertarian market interlocutors (such as Brittan) hold in common are as striking as the differences in institutional solutions which they advocate. We have inherited therefore a debate about public service broadcasting which is structured around three nodes, the state, the market and a third term, the public sphere/public service broadcasting. In spite of the antinomy between market and public service models that distinguishes the debate it is clear that major participants on both sides of the debate share a common goal for broadcasting policy, the increase of human liberty. Where they differ is in their allegiance to different institutional and organisational means through which the desired end is to be secured.

Freedom to and freedom from I believe that the debate, which Garnham moved on from a sterile dualism between state and market, has returned to an ossified condition similar to that which Garnham found in the early eighties. There is a dialogue of the deaf between the two sides to the debate, each invoking the superordinate value, freedom, and arguing that the policies of the other side are mendacious. The dirigistes, proponents of the public sphere, public service and the public sector, argue that the regime advocated by the liberals under the banner of freedom is simply freedom for large corporations to dominate information markets and flows and to reduce the range, quality and diversity of programming under the guise of responding to consumer demand. The liberals, proponents of the market, competition and freedom of the press (including broadcasting) and expression argue that the dirigistes’ programme is one of legitimising elite capture of broadcasting institutions, the imposition of a programme diet that serves elite, rather than popular, preferences and closet state control of the media. If the adversaries in the debate agree, as I think they do, that the fundamental goal of broadcasting (and media) policy is freedom yet disagree on the means to achieve that end (notably on the relative importance of the institutions of state, public service and market) then it seems clear that freedom does not mean the same thing to the participants in the debate. They use the same word but mean different things by it. Proponents of public service broadcasting (and/or exacting regulation of broadcasting markets) customarily argue that a market regime in broadcasting will diminish programme diversity because producers will have too little incentive to produce expensive (quality) programmes, and broadcasters will have too strong an inducement to schedule for the highest common factor of audience tastes (and will thus exclude programmes which address the strongly held and distinctive interests of the plurality of ‘publics’ which make up the audience for broadcasting). To guarantee 74

Public Service Broadcasting and Freedom diversity in programmes and schedules (‘internal pluralism’) public service advocates customarily support limits on the establishment of competing services, whereas proponents of a broadcasting market customarily argue that diversity is and has been inhibited by regulatory barriers to the establishment of new services. Even when they were (or are) not explicitly monopolistic (as most European broadcasting regimes were in recent memory) they protected favoured broadcasters from competing services by denying foreign channels access to cable networks, refusing licences to new entrants or pre-empting new services by tying up rights to attractive programming. To guarantee diversity through choice among channels (‘external pluralism’) market advocates customarily support the elimination of barriers to entry to broadcasting markets and a rolling back of the established privileges of incumbent broadcasters. These differences are differences about the relative importance of two conceptions of freedom: negative freedom, ‘freedom from’ and positive freedom, ‘freedom to.’ These distinct concepts of freedom are explored in Isaiah Berlin’s lucid essay (Berlin, 1969). Proponents of public service broadcasting tend to invoke what Berlin (who of course was not the first to make this distinction) called positive freedom, whereas proponents of the market tend to invoke negative freedom (Berlin, 1969 passim). Neither conception of freedom is sufficient, both are necessary. Berlin defines negative freedom (or liberty) as ‘The area within which the subject […] is left to do or be what he (sic) is able to do or be, without interference by other persons.’ whereas positive freedom (or liberty) is ‘the source of control or interference that can determine someone to do, or be, this rather than that’ (Berlin 1969 pp. 121–2). The extent of negative freedom depends, Berlin (1969 p. 130) argues, on ‘how many choices are open to me (though the method of counting these can never be more than impressionistic).’9 The extent of positive freedom (‘the wish on the part of the individual to be his own master’ [Berlin, 1969 p. 131]) is not in principle limited by others but is dependent on the power of an individual (or group) to achieve goals which only her or his (or a group’s) own incapacity (rather than duress exercised by others) would prevent them from achieving. Yet because Berlin regards humans as interdependent (Berlin 1969, p. 124) one person’s freedom is dependent on the degree to which others exercise their freedom: ‘freedom for the pike is death for the minnows’ as Berlin states (ibid.). The negative freedom of one (or some) may (or may not) be diminished (or extended) by the exercise of positive freedom by another (or others). Berlin shows how the wellintentioned exercise of positive freedom by a group on behalf of its members (the coercion of ‘men in the name of some goal (let us say, justice or public health) which they would, if they were more enlightened, themselves pursue’ (Berlin, 1969 pp. 132–3) may become despotic. Yet although there is a potential danger of despotism resulting or developing from the exercise of positive freedom, this will not necessarily be the case. The exercise of positive freedom cannot be devalued in relation to negative freedom because of a potential danger of harm. Nor too, Berlin argues, can the exercise of negative freedom be disqualified on the grounds that its exercise actually (or potentially) harms the capacity to exercise positive freedom. For if negative freedom is subordinated to positive freedom then ‘Liberty, so far from being incompatible with 75

Media and Identity in Contemporary Europe authority, becomes virtually identical with it’ (Berlin, 1969 p. 148) or, put another way, ‘sovereignty of the people could easily destroy that of individuals’ (Berlin, 1969 p. 163). There can be no doubt that the re-regulation of European broadcasting during the last decade (notably through the European Community’s Television without Frontiers Directive, the successive actions of DG IV and the Council of Europe’s Convention on Transfrontier Television)10 has significantly extended ‘negative freedom.’ Viewers have access to more services, broadcasters have more ready access to programme rights and to establishing service, and producers have better access to markets for the sale of programmes than before. The role of markets has increased and markets have delivered real benefits to consumers and to new broadcasters and programme suppliers. Yet these changes have done little to extend positive freedom. As Keane recognises such advances in negative freedom are more beneficial to pikes than to minnows. He states: friends of the ‘liberty of the press’ must recognize that communications markets restrict freedom of communication by generating barriers to entry, monopoly and restrictions upon choice, and by shifting the prevailing definition of information from that of a public good to that of a privately appropriable commodity. In short it must be concluded that there is a structural contradiction between freedom of communication and unlimited freedom of the market, and that market liberal ideology of freedom of individual choice in the marketplace of opinions is in fact a justification of the privileging of corporate speech and of giving more power to investors than to citizens. (Keane, 1991 p. 89)

This is a cogent argument and one which Berlin (whilst recognising that there are striking disparities in the power of different social actors – some are pikes, others minnows) does not fully consider. As noted above, one of the major problems of reconciling positive and negative freedom, and thus of media policy, to which Keane (1991), Murdock (1990) and others have drawn attention, is the problem of corporate power. Corporations which are legal personalities are not equal in power to individual natural persons. The obvious remedy (and one sought and taken by citizens and states eager to restrain the exercise of negative freedom by all manner of pikes) of limiting the freedom of corporate speech is unattractive. What happens if corporate speech is not ceded freedom equivalent to individual speech? For unincorporated speakers have, potentially, an unlimited liability to pay punitive or compensatory damages arising from their individual speech. Whereas incorporation of a natural person as a legal person means that the natural person in question is subject only to a limited liability. The possibility of speaking as a legal person, rather than as a natural person, is thus a powerful liberalising factor. If negative freedom, realised in the profusion of new channels available to European viewers and guaranteed by the vigorous enforcement of competition regulation by the supranational Commission of the European Communities, is 76

Public Service Broadcasting and Freedom insufficiently highly regarded by advocates of Public Service Broadcasting and neoHabermasian critics of competition and a broadcasting market, so too is the necessity for positive freedoms and the institutions to realise them underestimated by market advocates. True, Peacock did recognise that some desirable programmes and services were likely to be squeezed out by the operations of the market and that therefore a ‘Public Service Broadcasting Council’ should be established to fund provision of such programmes and services (rather as matters are now arranged in New Zealand). But the establishment of means to realise ‘positive freedoms’ was a minor theme in the Peacock Report. Even though the market is likely to undersupply programmes directed to groups of consumers who are relatively poor (such as the elderly, children, and minority language and cultural groups). Nor will the market provide universal service. Terrestrial (free to air) broadcasting services will be extended only so far as the revenues generated from the extension of service exceed the costs of so doing (though this objection falls when satellite delivery of services is undertaken) and establishment of a subscription service entails welfare losses as viewers who don’t pay are excluded from receiving services.

Policy problems However, two challenging policy problems remain to be resolved after the necessity to ensure the provision of such services has been granted. How much should be spent on the provision of such services? For it is not only desirable broadcasting services which the market will undersupply but also all manner of socially useful or culturally valuable services such as scientific (and even communication) research, education, and other forms of cultural production. And second, how to ensure that the kind of goods and services provided as ‘positive freedoms’ meet the needs and desires of consumers?11 Thus Berlin’s distinction between positive and negative freedom offers a useful basis for analysing contemporary broadcasting policy issues and debates. These debates have become characterised by an unproductive dualism of attack and/or defence of a particular principle of organisation (rather than discussion of how best the ultimate goals which towards which broadcasting policy is directed may best be achieved) and policies which are resulting in the elimination of institutions and practices which have, and should continue, to serve users well. However, the character of such debates, characteristic of the early 1990s, is welladapted to the service of particular interest groups, whether incumbent public service broadcasters on one hand or recent entrants (and potential entrants) to the broadcasting market on the other. But it is not well-adapted to the dispassionate evaluation of policy options or to the realisation of the goal shared by public service and market advocates, the extension of liberty. For neither the rival organisational principles, nor public service, nor the market, have (or can) separately realised the goals of advancing both the negative and positive liberties of viewers and listeners. Of course Berlin’s scheme is not without difficulties (I have sketched one problem that requires thinking through) but his notions of the complementarity of negative and 77

Media and Identity in Contemporary Europe positive freedoms, of the necessity of both, and the insufficiency of either concept alone, offer a productive basis for thinking beyond the sterile dualism in which the broadcasting policy debate has become mired. Neither positive nor negative freedom are sufficient, neither public service nor the market principles of organisation of broadcasting have delivered both kinds of freedom. Clearly the policy conclusion is that a system which combines both positive and negative freedoms is required. The historical evidence suggests that such a system exists neither in circumstances where public service broadcasting has a monopoly nor in circumstances where for profit commercial broadcasting, the market sector, is overwhelmingly dominant. A mixed system is required. This may seem an underwhelming conclusion but it is not one which can be derived from the arguments of either the neo-Habermasians or the market theorists. Moreover the dialogue of the deaf between these two sides in the ‘debate’ about broadcasting policy has been conducted at such a high volume that it has drowned out discussion of the difficult questions that follow once this, intermediate, conclusion is granted. Not least is the question of how viewers and listeners are to ensure that it is their preferences which determine the policy and practice of broadcasting institutions. Although the Peacock Report did not give a satisfactory answer to this question, it posed this central question cogently and inescapably. It is to questions such as that, rather than to an endless rerunning of the loop rehearsing the battle between the market and its adversaries, that we should turn our attention.

Acknowledgements This chapter was first published as ‘Public Service Broadcasting And Freedom’ in Media Information Australia. 1992 N 66 pp. 3–15. The author thanks the members of the MIA editorial board, Elizabeth Jacka and Rodney Tiffen, who commented on this essay. The research on which this chapter was based was funded by the UK’s Economic and Social Research Council under research grant R00023 2159.

References 1 I know of no such listings in other jurisdictions, although Australia has clearly identified the goals for its broadcasting system in several places (see Green, 1976 Paras 125 and 126, Sommerlad, 1988 p. 35, Saunderson, 1988 p. xi). I know of no Australian listings of the defining characteristics of public service broadcasting. Perhaps making lists is a peculiarly English habit. 2 So far as I have been able to discover Habermas’ ideas about the public sphere were first introduced to English language readers in 1974 when New German Critique published a translation of a brief essay (an encyclopedia article) by Habermas titled ‘The Public Sphere.’ (Habermas’ book ‘Strukturwandel der Oeffentlichkeit’ was published in German in 1962. An English translation was published in the UK in 1989). However for our purposes Habermas’ impact on broadcasting studies dates from Garnham’s essay of 1986 ‘The Media and the Public Sphere’ which quotes from the seven page essay first published by New German Critique and later reprinted in Mattelart and Siegelaub (1979) to which Garnham refers. 3 An answer often given in the UK and other Western European countries is ‘Via the licence fee,’ however licence fees are simply a tax (and a particularly regressive form of taxation) under another name. 4 A qualification needs to be entered here. Blumler (and Hoffman Riem) canvass (Blumler, 1992 p. 208)

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Public Service Broadcasting and Freedom three possible future roles for European public service broadcasting; prioritising production and scheduling of particular programme types (reaching the parts that other broadcasters don’t reach), identifying particular audience types unserved by commercial broadcasters and targeting them (reaching the viewers other broadcasters don’t reach) and (the policy which Blumler and Hoffman-Riem advocate) adopting a series of qualitative priorities in programming, making programmes well and developing a particular ‘brand’ identity of commitment to public interest issues (competing hard against the offerings of commercial rivals and establishing a unique selling point for public service broadcasting). Though Blumler envisages publicly owned public service broadcasters execution of such policies is not incompatible with private ownership of broadcasting. 5 Brittan is assistant editor and principal economic commentator of The Financial Times and the brother of Sir Leon Brittan, formerly UK Home Secretary (and the minister who established the Peacock Committee) and latterly the Vice-President of the Commission of the European Communities who is responsible for competition policy. 6 An often cited case in point is the justly celebrated institutional practice of the BBC’s Television Service in the 1960s which owed much to the introduction of commercial television in Britain in 1955. 7 Of course these are analytical distinctions. Empirical and theoretical approaches are not mutually exclusive. 8 Probably the best example of a large scale broadcasting system (PBS is large; UNESCO [1989 p. 104] states that PBS was [in 1986/7] the 46th largest media content organisation in the world. It was bigger than Fininvest [Berlusconi], Disney and the CBC/Radio Canada) funded from the public sphere is PBS/NPR (Public Broadcasting Service/National Public Radio) in the United States. PBS/NPR has a variety of sources of funding (including federal and state government subventions and corporate sponsorship) but uniquely raises funding from the public sphere in donations from its viewers and listeners. There has been a striking rise in the level of revenue (both in absolute and relative terms) raised by PBS/NPR from listeners and viewers during the 1980s. In 1980 the total income of PBS/NPR was $705m of which $102m (14.5%) was raised from subscribers and auctions/marathon (27.3% from the Federal government and 38.5% from state and local government). In 1985 the total income of PBS/NPR was $1,096m of which $248m (22.6%) was raised from subscribers and auctions/marathon (16.3% from the Federal government and 32.7% from state and local government). In 1990 the total income of PBS/NPR was $1262m of which $m 295 (23.4%) was raised from subscribers and auctions/marathon (16.1% from the Federal government and 22.8% from state and local government). Sources (derived from US Department of Commerce, 1991 p. 559 and PBS, 1992 p. 6). However, in spite of PBS’ remarkable success in raising money (and thus tangibly demonstrating support) from its users, PBS is widely seen to be in thrall to its corporate and government sponsors (see inter alia Rose 1986). The public in the United States may contribute increasing amounts to sustain PBS/NPR and the PBS/NPR system probably has the strongest claim of any broadcasting service to be funded from civil society and the public which it claims to serve but that funding has thus far been insufficient to emancipate PBS/NPR from corporate and government power. 9 And on the degree to which the choices are realisable, how important they are relative to each other and what social constraints obtain in determining which choices are made. 10 Council of the European Communities (1989) Directive on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities. 89/552/EEC. OJ No L 298. 17.10.1989. pp. 23–30.

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Media and Identity in Contemporary Europe Council of Europe (1989) European Convention on Transfrontier Television. 5.5.89. Council of Europe. Strasbourg. Commission Decision of 15.9.1989 relating to a proceeding under Article 85 of the EEC Treaty (IV/31.734 – Film purchases by German television stations) OJ L 284/36–44 3.10.1989. Commission Decision of 19.2.1991 relating to a proceeding under Article 85 of the EEC Treaty (IV/32.524 – Screensport/EBU Members) OJ L 63/32-44 9.3.1991. 11 For a lucid discussion of these issues see the Report of the Federal Cultural Policy Review Committee (Applebaum/Hébert 1982) usually known as the Applebaum/Hebert Committee, whose report to the Government of Canada was published in 1982.

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6

Two types of Freedom, Broadcasting Organisation and Policy on both sides of the Atlantic

Introduction Surprisingly little attention has been given to questions of access and control in discussions of UK broadcasting policy, with the notable exception of Heller (1978) and latterly the Peacock Report (Peacock, 1986).1 However the 1988 Broadcasting White Paper included the category ‘popularity’ among the policy goals for UK broadcasting. Even if true democratic control was not envisaged, at least the White Paper’s formulation suggested that the question of broadcasters’ responsiveness to their audience had been considered. There are other straws in the wind which suggest that access, accountability and the interests of viewers and listeners are being accorded a new and higher priority in the policy debate. These include Channel 4’s convening of a Broadcasting Accountability Forum in June 1992, the proposals for a ‘Broadcasting Forum’ (inspired by Colin Shaw, the Director of the Broadcasting Standards Council) and the growth in membership, influence and legitimacy of the Voice of the Listener and Viewer Association.2 Why this interest in a hitherto neglected topic? Largely because of the belief that technological change has established unprecedented possibilities to establish a new relationship between broadcasters and viewers & listeners. Spectrum scarcity and the non-excludable ‘public good’ characteristics of broadcasting have effectively been abolished as a consequence of technological change. The development of digital transmission systems (which use spectrum more efficiently), communication satellites (which make usable for broadcasting frequencies which were formally useless for broadcasting purposes), and the pervasive establishment of cable and video cassette distribution of television signals (which do not use the radio frequency spectrum for the distribution of signals) have all mitigated spectrum scarcity. Moreover, cheap encoding and decoding technologies have made broadcasting services excludable. They have thus made it possible to establish subscription and pay per view funding for broadcasting which promise (or threaten) to establish a broadcasting market which corresponds more closely to what neo-classical economic theory defines as a well-functioning competitive market than was formerly possible. In such a market, where there are no technological barriers to entry and in which a signalling system between consumers and producers can be established through price, viewers and listeners are able to ensure (at least in theory) that it is their preferences (rather than the corporate or political elites which have previously controlled broadcasting) which determine the shape and nature of the broadcasting system.3 The 81

Media and Identity in Contemporary Europe new broadcasting technologies have therefore been claimed as ‘Technologies of Freedom’ (de sola Pool 1983), though, as Golding and others have pointed out, resolution of the market failure which stemmed from spectrum scarcity and nonexcludability has amplified rather than resolved inequalities in access to broadcasting services. Indeed Golding (1990) has argued that market theory is basically flawed because its presumption that society is constituted of basically equal individuals who are able to enter (and leave) markets on equal terms is false. In the old broadcasting order, before the new technologies, spectrum limitation and non-excludability led to a general recognition of broadcasting as an instance of market failure. If markets fail, then (but only then) political agencies should intervene to secure an efficient use of resources and the matching of supply to demand which wellfunctioning markets are deemed to do.4 Thus in a failed market such as broadcasting, the reduction of the state to a ‘nightwatchman’ role is unlikely to serve the public interest, for failed markets require intervention if the public interest is to be served. Yet political intervention in broadcasting markets is fraught with problems. Because broadcasting is widely credited by political authorities with unique powers, politicians are disinclined to establish mechanisms of access and accountability which render broadcasting genuinely independent of government. However, democratic governments do not wish to exercise (or at least be seen to exercise) explicit and direct control of broadcasting. Indeed, they have generally undertaken not to do so, notably by acceding to international conventions and treaties which guarantee (in so far as ‘scraps of paper’ can be said to guarantee anything) freedom of expression and freedom of access to information. Article 19 of the Universal Declaration of Human Rights and Article 10 of the European Convention on Human Rights are cases in point. In consequence, broadcasters and governments in western democratic societies have been fated to be locked together in a mortal embrace. Neither governments nor broadcasters have been able to renounce claims to independence from the other nor are either government and broadcasters able to be seen to exercise control over the other party. Political intervention in broadcasting markets (or if the formula is preferred, governmental assumption of responsibility for broadcasting) therefore has fallen characteristically between the two stools of explicit intervention and explicit recognition of broadcasters’ independence.5 But however difficult it has been to find a solid theoretical and institutional basis for political intervention in broadcasting in societies committed, even if not by a First Amendment and a Bill of Rights, to the independence of the media from government, such intervention was long assumed to be necessary. However, the perceived rationale for intervention – market failure – has been seen to be undermined by technological change. In consequence there has been a marked growth in advocacy of an augmented role for the market, and a diminished role for the state in the organisation of broadcasting.

Peacock and Pilkington In the UK these arguments have been made persuasively by libertarian democrats who have argued that a well-functioning broadcasting market, now possible thanks to 82

Broadcasting Organisation and Policy on both sides of the Atlantic technological change, will emancipate viewers and listeners from the choices hitherto imposed on them by broadcasters (and the state) and will enable a range of voices, formerly silenced in consequence of their exclusion from the system, to be heard. The linked rise in importance in discussion of UK broadcasting policy of the concepts of the market and the consumer interest can be dated from the publication of the Peacock Report in 1986. Peacock’s emphasis on the importance of competition and the benefits of what one of the report’s principal authors described as a ‘sophisticated market system’ (Brittan, 1986 p. 1) is well-known. What tends to be forgotten is the Peacock Report’s arguments that the superordinate goals of broadcasting policy are to ‘enlarge both the freedom of choice of the consumer and the opportunities available to programme makers to offer alternative wares to the public’ (Peacock, 1986 p. 125). Peacock’s attribution of primacy to the viewer and listener was novel. UK broadcasting policy has long been based on the supposition that viewers and listeners are vulnerable and that a chief role of the state in respect of broadcasting is to protect viewers and listeners from broadcasting, even if what they are to be protected from is what they themselves desire. As the Pilkington Report stated ‘adopting the majority view […] would be to mistake ‘what the public wants’ […] for the public interest’ (Pilkington, 1962 para 408). Creation of the Broadcasting Standards Council in 1988 reflects the continuing power of the underlying presupposition in UK broadcasting policy that viewers and listeners are vulnerable and require to be protected. As Samuel Brittan6, a leading member of the Peacock Committee, commented in putting forward the idea of a free broadcasting market without censorship, Peacock exposed many of the contradictions in the Thatcherite espousal of market forces. In principle, Mrs Thatcher and her supporters are all in favour of de-regulation, competition and consumer choice. But they are also even more distrustful than traditionalist Tories such as Douglas Hurd of plans to allow people to listen and watch what they like, subject only to the law of the land. They espouse the market system but dislike the libertarian value judgements involved in its operation. (Brittan, 1987 p. 4)

By juxtaposing Peacock and Pilkington I have constructed the antinomy between market and the regulated/public service provision of broadcasting services which arose out of recognition of market failure as one between emancipation and restriction. Much in the actual organisation and practice of broadcasting in the UK exemplifies that opposition rather well. But state intervention in broadcasting has not been confined to the censorious kind of content regulation deprecated by Brittan. Content regulations (such as those which demand provision of children’s programmes and adult programme genres undersupplied by the market such as education programmes and programmes of national origin) have been established to stimulate production and dissemination of a wider variety of programmes than would otherwise be provided. Moreover to suggest that the public service/market antinomy is synonymous with the antinomy between emancipation and repression grossly caricatures the arguments advanced by proponents of public service broadcasting in recent years. Underpinning 83

Media and Identity in Contemporary Europe Blumler’s arguments (Blumler, 1992) for public service broadcasting as a guarantor of diversity is a conception of broadcasting as an emancipation of the viewer through the provision of choice. So too with Garnham’s support (Garnham, 1990) for public service broadcasting as a bearer of a contemporary public sphere and Murdock’s advocacy (Murdock, 1990) of public service broadcasting as a counterweight to the oligopolisation of broadcasting which he claims has (or will) followed the opening of broadcasting markets. All these arguments for public service broadcasting are grounded very differently to those put forward by Pilkington. So different are the grounds of Blumler, Garnham and Murdock’s arguments to those of Pilkington that there seems to be as much which unites contemporary proponents of market and public service provision of broadcasting services as separates them. In spite of the antinomy between market and public service models, it is clear that proponents of both models share a common goal: the emancipation of the listener and viewer. But although both sides invoke freedom, they mean different things by it. They differ in particular in their allegiance to different institutional and organisational means through which the desired end is to be secured.

Internal and External Diversity The differences between proponents of public service and the market are crystallised in the relative priority given to different kinds of diversity. One side emphasises internal diversity (provision of a mixed programme schedule) and the other external diversity (choice between a plurality of channels). Each side of the debate is trying to convert a partial truth into a comprehensive truth, to make a necessary value a sufficient value. Proponents of public service broadcasting (and/or exacting regulation of broadcasting markets) customarily argue that a market regime in broadcasting will diminish programme diversity because producers will have too little incentive to produce expensive (quality) programmes, and broadcasters will have too strong an inducement to schedule for the highest common factor of audience tastes (and will thus exclude programmes which address the strongly held and distinctive interests of the plurality of ‘publics’ which are held to make up the audience for broadcasting). To ensure diversity in programmes and schedules (‘internal diversity’) advocates of public service broadcasting have customarily supported limits on the establishment of competing services. They have thus had the difficult and paradoxical task of arguing that diversity is best ensured by limiting the provision of services and through the inclusion of low rated, i.e. little watched, programmes in the schedule. Whereas proponents of a broadcasting market have been on seemingly surer ground in arguing that diversity has been inhibited by restrictions on the establishment of new services. Yet there can be little doubt that a market based broadcasting regime will undersupply programmes to groups with little economic power, such as children, the elderly and subordinate social groups such as migrants and linguistic minorities. A striking example of this conflict between two conceptions of diversity (and the public interest) has unfolded in the European Community in recent years. This conflict also exemplified representative differences between market and public service conceptions of the public interest and how broadcasting should be organised to serve 84

Broadcasting Organisation and Policy on both sides of the Atlantic that interest. The principal protagonists in the conflict are the European Broadcasting Union, the ‘club’ of European public service broadcasters, and the Competition Directorate of the Commission of the European Communities, DG IV. The Competition Directorate has acted directly against the EBU in one important (and piquant) case7 but the formal public combat between the EBU and DG IV is but the tip of the iceberg of a conflict which the Secretary General of the EBU described (interview 27.2.1992) as ‘potentially fatal’ to the EBU. Another EBU official (interviewed 24.2.1992) stated that the Commission’s actions ‘could lead to a catastrophic collapse of Eurovision’. Essentially, the Competition Directorate of the Commission regards most of the EBU’s established working practices as anti-competitive. In its annual report (for the year 1989) DG IV described the European broadcasting market as one where ‘a number of new, mostly commercial, broadcasters have entered the market, in competition with the established public broadcasting organizations […] the Commission has increasingly focused on the audiovisual media in recent years, from the standpoint of competition policy and stated that its main concern has been to keep markets open and to prevent or reduce barriers to market entry’ (Commission of the European Communities 1990b p. 51). The message was unmistakeable and there was much in the EBU’s behaviour that caused the Commission concern. In 1990 the EBU explicitly confirmed its long standing policy of denying membership of the Union to commercial broadcasters.8 The EBU therefore appears to be a closed club which acquires exclusive rights to programming (notably sports rights) on behalf of its members, to be establishing barriers to entry to the broadcasting market for new commercial broadcasters by blocking their access to attractive programming. Furthermore, in the long-established exchanges of programmes (notably news, sports, live performances, music and a host of other programmes) via Eurovision between its members, the Union appears to cross-subsidise its membership and illegitimately advantage them vis à vis commercial rivals. Moreover the EBU members who benefit from these arrangements include not only obviously non-commercial broadcasters such as the BBC (almost alone among European broadcasters in receiving no advertising funding) but also profit-distributing advertising-financed broadcasters such as Radio Monte Carlo, TF1 and CLT – broadcasters which are difficult to distinguish, except in their historical origins, from the commercial broadcasters excluded from Union membership. Yet, from the point of view of EBU members, the working practices, to which DG IV took exception, had served the public interest by enabling small and poor public service broadcasters to give their audiences access to programming that would otherwise have been unaffordable. They have undoubtedly given all EBU members access to a tremendous pool of news coverage and other programming beyond the extent to which any single broadcaster, no matter how well-endowed, could aspire. These arrangements have kept weak public broadcasters from succumbing to commercial competition which has grown mightily in extent and power by giving them privileged access to programming without which they might simply have either gone out of existence or have been forced to change their programme schedules and reduce ‘internal diversity.’ 85

Media and Identity in Contemporary Europe Clearly there is an unresolvable conflict between the principles on which the EBU was built and those espoused by the Competition Directorate. These differences, which are representative of the differences between the two sides in the broadcasting debate, are differences about the relative importance of two conceptions of freedom: negative freedom, ‘freedom from’ and positive freedom, ‘freedom to’. These distinct concepts of freedom are explored in Isaiah Berlin’s lucid essay ‘Two Concepts of Liberty’ (in Berlin, 1969). Proponents of public service broadcasting tend to invoke what Berlin called positive freedom, whereas proponents of the market tend to invoke negative freedom (Berlin, 1969 passim). Neither conception of freedom is sufficient, both are necessary.9

Freedom and Broadcasting Negative communication freedoms are ‘guaranteed’ (in so far as agreements can guarantee anything) in a variety of declarations and treaties. For example Article 19 of the Universal Declaration of Human rights and Article 10 of the European Convention on Human Rights enshrine important aspects of negative communication freedoms. So too does the Treaty of Rome (EEC Treaty) from which the Competition Directorate of the European Community derives its powers. Indeed the Commission of the European Communities has defined the four fundamental freedoms of the European Community as negative freedoms: ‘the free movement of goods, services, people and capital’ (Commission of the European Communities, 1992 p. 2). There can be no doubt that the re-regulation of European broadcasting during the last decade (notably through the European Community’s Television without Frontiers Directive, the successive actions of DG IV and the Council of Europe’s Convention on Transfrontier Television)10 has significantly extended ‘negative freedom’ in broadcasting. Viewers have access to more services, broadcasters have more ready access to programme rights and to establishing service, and producers have better access to markets for the sale of programmes than before. The role of markets has increased and delivery of broadcasting services through competitive markets have delivered real benefits (notably new services) to consumers and to new broadcasters and programme suppliers (notably access to markets). Yet little has been done to extend positive freedom beyond the rich historical legacy constituted by the institutions, regulations and subsidies put in place by individual states to ensure that certain classes of programmes are made available to viewers and listeners; measures such as quotas for national content, children’s programmes, programmes for minorities and the like. Whether the institutional route taken to realise these goals is subsidy (such as Telefilm Canada’s Broadcast Fund or the European Community’s MEDIA programme), regulation (the European content quotas prescribed in the Television without Frontiers Directive or the ‘proper proportions’ of UK/EEC content prescribed in the UK Broadcasting Act), or creation of public service broadcasters such as the BBC or Channel 4, the end sought is enlargement of positive freedom. However, certain cases of enlargement of positive freedom conflict with the enlargement of negative freedom. A striking example of such conflicts is apparent in the case of broadcasting content regulations. To take a particularly clear example of a general case; the requirement for a quota of national content, made in order to enlarge 86

Broadcasting Organisation and Policy on both sides of the Atlantic positive freedom, conflicts with the negative freedoms of broadcasters and consumers of broadcasts. For example establishment of ethnic channels (serving diaspora minorities) in many countries would be incompatible with all but the least stringent of national content regulations. Given the inevitability of some trade-offs between negative and positive freedoms two questions arise. First, how can broadcasting be organised so that such conflicts are minimised? And second how are policy makers to decide what is the appropriate balance to strike between positive and negative freedoms? In respect of the first question a mixed, market and public service, broadcasting system seems likely to minimise the losses which follow the irreconcilability of positive and negative broadcasting freedoms. In respect of the second, the answer must surely be to create a system which maximises choice for users and when choices have to be made, as inevitably any system must, to ensure that those who make choices are accountable to users. Those who are accountable will, if prudent, therefore ensure that their choices are as close a proxy for users’ choices as possible.

Policy Problems However both market and public service based broadcasting systems face common problems. If the goal of broadcasting policy is to provide services which match consumer needs and desires two problems arise. First, how are services to be funded? Advertising finance is likely to deliver a system optimised to the needs of advertisers rather than audiences and subscription finance will exclude consumers and will thus lead to a welfare loss. To avoid these disadvantages two forms of public funding have been developed: funding directly from the state budget (as in Canada for the CBC/Radio Canada); and funding from licence fees (as in most of Europe). However, these two forms of funding are also objectionable. Funding from the state budget makes broadcasters very vulnerable to political pressure from government (see Collins, 1991) and funding from licence fees is a regressive form of taxation which, because it does not recognise differences in the licence payers’ ability to pay, bears more heavily on the poor than on the rich. And, second, who is to decide, and on what grounds are they to decide, the number, character, cost of services which are to be provided from public funding? If the answer is not to be that given by the Pilkington Committee (Pilkington, 1962) regulation by Platonic Guardians, then a better signalling system between consumers and suppliers of broadcasting services is required. How can an effective signalling system between consumers and producers be established? Establishment of broadcasting markets in Western European states over the last decades has enabled audiences to send signals to service providers which formerly they were unable to do. Although the signalling systems provided by advertising and subscription financed television are imperfect, they are superior to those which formerly obtained. Just as the introduction of competition within UK television in the 1950s showed that viewers’ desires for demotic, innovatory and entertaining programming had been undersupplied during the period of BBC monopoly, so too has the introduction of competition in other markets, notably the Netherlands, Italy and Germany, enabled Dutch, Italian and German viewers to send similar messages to their suppliers of broadcasting services. 87

Media and Identity in Contemporary Europe Without competition there is real danger of service providers losing contact with their audience and transmitting programmes which satisfy broadcasters and elite opinion but not the majority of viewers. As Peacock noted (Peacock, 1986 p. 41) less than half UK television viewers expressed themselves satisfied with the quasicompetitive (or as official rhetoric has it competition for audiences but not for funding) broadcasting regime which has prevailed in the UK since the establishment of commercial television. Granted a mixed broadcasting system, and a free to air system unvitiated by the welfare loss entailed by subscription broadcasting, the central policy problem is to ensure that the diversity supplied is the diversity wanted by viewers and listeners. Here the question the Peacock Committee proposed, ‘How is the signalling system between viewers and broadcasters to be improved?’ is central. It is paradoxical, and unfortunate, that the question of satisfying consumers has most eloquently been raised in the UK context in the course of advocacy for ‘a sophisticated market system’ which cannot do so. Professor Peacock himself recognised that establishment of a ‘pay per view’ system, which would enable viewers to signal their desires and the intensity of their desires through the price system, entailed a significant welfare loss. Peacock stated that a table d’hôte broadcasting system might well be preferred to an à la carte system (Peacock, 1986a).

The Consumers’ Interest At a colloquium convened under the auspices of the Fulbright Commission it is particularly appropriate to draw comparisons between the organisation of broadcasting in the United States and the United Kingdom. The distinctive broadcasting systems of the United Kingdom and the United States of America have assumed the character of models or ‘ideal types,’ by reference to which broadcasting systems in other democratic societies are classified and understood. These different systems, each notionally part of a ‘fourth estate’ independent of other power centres in their respective societies, are distinguished one from the other by the differences in the relative importance each cedes to political authority and to competitive market relationships in the governance and organisation of broadcasting. The long period of BBC monopoly (which lasted until 1955), established the ‘UK model,’ the key elements of which were state funding for broadcasting,11 vertically integrated broadcasting organisations, universal access to broadcasting services, and broadcasting institutions founded on the linked beliefs that competition was destructive and audiences were vulnerable and needed protection. The US system, in contrast, was based on division between programme makers and broadcasters, on belief in the importance of competition, extension of service only so far as it was profitable to do so and the linked beliefs that the role of the state was to keep out of broadcasting and that the audience was able to look after itself. In fact, like many such models, closer examination reveals that the empirical bases of the types no longer (if they ever did) conform to the models which they notionally inspired. The state is no more absent from broadcasting in the USA than is the market from broadcasting in the UK. 88

Broadcasting Organisation and Policy on both sides of the Atlantic However, there is some truth in the conventional wisdom which sees the UK and US systems as opposites. Indeed broadcasting in the UK was developed in opposition to the trajectory established in the USA. Briggs, writing about the birth of broadcasting in the United Kingdom, observed ‘American experience served as a warning throughout the whole of this period as is apparent in all the writings on radio on this side of the Atlantic’ (Briggs, 1961 p. 67). The US and UK have historically placed their emphases differently when choosing between these policy options. The US, partly because of fewer constraints imposed by spectrum scarcity, but more importantly because of a political culture less disposed than European political cultures to use the power of the state to realise ‘positive freedom’, has tended to opt for external diversity and has imposed fewer requirements on its broadcasters to provide internal diversity than has the UK. Moreover the US has placed less emphasis on maximising welfare than has the UK. Geographical extension of service to provide something very close to universal broadcasting service has been a central, and very costly, aspect of UK (and UK type) broadcasting services, whereas broadcasting services in the USA have been geographically extended only so far as it has been profitable for broadcasters to do so. The UK has realised the ‘positive freedom’ of universal service via intervention, the USA instead chose ‘negative freedom’. However successive metamorphoses have brought broadcasting in the US and the UK closer and closer. Within the new age of broadcasting an unresolved dilemma remains which is common to both broadcasting systems: how to match the broadcasting services offered to those demanded by consumers. Here there is an interesting difference between the US and the UK. The USA has a consumer/citizen movement which has vigorously represented consumer and citizen interests in broadcasting. Albeit underresourced, this movement in the USA mediates between consumers and producers and provides a signalling channel absent in the UK broadcasting system. A notable consumer body in the USA (but not the only one) is the Citizens Communications Center (founded in 1969). The CCC has, it states: represented public groups, both local and national, in legal proceedings before the Federal Communications Commission and in the courts. It has brought suits aimed at opening up the Federal Communications Commission to more civilian involvement. It has challenged the broadcast industry on its failure to provide equal opportunities in employment for all races and sexes. It has sought community responsiveness and diversity in programming and ownership in both broadcasting and cable. (Citizens Communications Center, 1979)

Both Canada and Australia,12 but no European country, have consumer communication bodies comparable to those in the USA. However though a UK group comparable to the CCC (and its Australian and Canadian equivalents) is desirable such a group could not, given the question of legal standing, take on an range of activities identical to those taken up by its American, Australian or Canadian counterparts. Yet, though a UK consumer and citizen interest group would necessarily be different to its counterparts 89

Media and Identity in Contemporary Europe elsewhere, the case for such a group and for more effective representation of the consumer interest in the UK can be quickly made.

The Consumer Interest and UK Broadcasting Potter (1988) has defined five criteria which require to be satisfied if the consumer’s interest is to be adequately served: access, choice, information, redress and representation. If we assess UK broadcasting in terms of these criteria we find it wanting. Recent developments in UK broadcasting have resulted in a worsening of access by all potential consumers to the full range of UK broadcasting services; whereas formerly all viewers had lawful access to all services if the licence fee was paid, now some viewers are excluded by price both from new services and from access to programmes (such as live soccer) which were formerly freely accessible. Moreover, Channel 5 is inaccessible (via free to air terrestrial broadcasting) to up to 30% of the UK population who are denied access to the service. Here we see a significant retreat from the universal service doctrine which was formerly a central tenet of UK broadcasting policy. Choice has been widened in the sense that some viewers now enjoy lawful access to a greater range of services than formerly (thanks to the establishment of satellite television). However some commentators fear a future reduction of choice in programmes (I know of no studies which have established that a loss of choice has in fact already taken place). Notably in respect of programmes which have a poor ratio of returns in relation to costs, such as children’s programmes, high cost UK produced drama and the like. Information about programmes and services has probably been improved, thanks to the requirement that service providers must licence publication of their programme schedules. But in other respects, consumers are denied information that would assist them in making informed judgements about, and between, the services which they consume and for which they pay. Much audience research remains confidential, as do the grounds on which important regulatory decisions are taken (such as the allocation of franchises). The Chairman and Director General of the BBC both declined to participate in the 1992 Voice of the Listener and Viewer ‘Open Space’ programme. There are no satisfactory means whereby viewers and listeners can secure redress from the providers of broadcasting services, nor are there adequate means whereby they are able to represent their needs and desires to broadcasters and policy makers. Paradoxically, but not surprisingly, given the long established conception in the UK of the consumer of broadcasting services as vulnerable, there is a plethora of ‘guardians’ charged with the representation of the users’ interests. However these institutions have not been charged with assisting viewers and listeners to secure redress, or with enabling consumers of broadcasting services to represent their preferences. A multitude of agencies are charged with serving the public and consumer interest (not always the same) in broadcasting: the Governors of the BBC, the Independent Television Commission, the Radio Authority, the Home Office, the Department of Trade and Industry, the Council of Europe, the European Commission, the Welsh Fourth Channel Authority, the Broadcasting Complaints Commission, the 90

Broadcasting Organisation and Policy on both sides of the Atlantic Broadcasting Standards Council, and arguably Oftel and the International Telecommunications Union can all be enlisted as representatives of the consumer of broadcasting services. No less important are the suppliers of broadcasting services (and substitutes for broadcasting such as cable and video) to the consumer. Here too there are several agencies (and jurisdictions) involved: the BBC, the ITV companies, Channel 4, S4C, BSkyB and other satellite television programme companies, cable television programme companies, the Independent Local Radio companies and the ‘additional’ radio service providers, and anticipated new entrants to broadcasting – notably Channel 5 and National Commercial Radio. And, if we take as the unit of analysis the programme rather than the channel, the list increases to include agencies such as the Gaelic Language programme. As the Consumers Association stated ‘there is a potential for confusion over which body to approach and over the effect that complaining and regulation will have’ (Consumers Association, 1991 p. 32). The Director General of Fair Trading’s comment is as true of broadcasting as it is of Britain generally: ‘A proliferation of regulatory bodies and regimes for different sectors of the economy requires some kind of rationalisation’ (Director General of Fair Trading, 1986 p. 11).

Conclusion Three things are required for more effective representation of consumer and citizen interests in respect of broadcasting in the UK: definition of ‘consumer rights’ or entitlements in respect of broadcasting, assessment of whether (and if so how) the present arrangements for broadcasting in Britain must be changed for consumers to receive their entitlements, and formulation and advocacy of whatever changes are judged necessary. Achievement of these goals will be possible only if the consumer interest is recognised and a UK body analogous to those established in other jurisdictions, notably the USA, is established. It is to institutional change and creation of a consumer and citizen interest body to which we need to turn our attention if the goals of democratic control and wider access to broadcasting in the UK are to be realised. The creation of such an institution would be entirely in keeping with the establishment and enlargement of a public sphere in communications in the UK. It is not only through preservation and defence of established public service broadcasters that the viewer and listener interests and the establishment of a broadcasting public sphere can be served. Establishment of a UK CCC would be a move towards extending positive freedom in broadcasting.

Acknowledgements This chapter was first published as ‘Two Types Of Freedom, Broadcasting Organisation And Policy On Both Sides Of The Atlantic’ in Controlling Broadcasting. Proceedings of the Fulbright Colloquium 1992. eds M. Aldridge and N. Hewitt (1994) pp. 186–202. Manchester, University of Manchester Press. The ESRC supported the research which informed it under research award R00023 2159. Thanks to both the Fulbright Commission and the Institute for Modern Cultural Studies at the University of Nottingham for the opportunity to participate in the Fulbright Colloquium of 1992 91

Media and Identity in Contemporary Europe where this chapter was first presented as a paper. The author also thanks Tom Gibbons, Elizabeth Jacka and Ralph Negrine for their helpful comments.

References 1 But see also Madge, 1989, Gibbons, 1991 and McQuail, 1992. 2 In comparison to other countries such as Australia and Canada what is most striking about the UK is the absence of grass roots, community/public broadcasting, initiatives. 3 For a representative general argument for competition as a guarantee of freedom and consumer sovereignty see Friedman and Friedman (1981). 4 It is important to note that this viewpoint is neither universally shared nor does it invariably correspond to historical experience. Many societies have experienced a state presence in economic activity before the establishment of markets. Indeed Australia never had communication and media markets prior to regulation. 5 A case in point was Leon Brittan’s 1985 letter, formally written in his capacity as a private citizen but at a time when he held the office of Home Secretary, to the BBC to deplore the BBC’s proposal to screen a ‘Real Lives’ programme in which leading members of Provisional Sinn Fein and the Ulster Democratic Unionist party were interviewed. This striking example from the United Kingdom of a generally unresolved contradiction can be paralleled with examples from other jurisdictions: Bob Hawke’s dissatisfaction with ABC’s reporting of the Australia’s naval commitment to the Gulf war and Pierre Trudeau’s discontent with Radio Canada’s reporting of nationalist sentiment in Quebec come to mind. 6 Brittan is assistant editor and principal economic commentator of The Financial Times and the brother of Sir Leon Brittan, formerly UK Home Secretary (and the minister who established the Peacock Committee) and latterly the Commissioner of the European Communities responsible for competition policy. 7 The Screensport/EBU Members case which was determined in 1991 (see OJ L 63/32-44 of 9.3.1991) stemmed from a complaint by the UK company W H Smith Television – WHSTV (later ETN, European Television Networks) – and the principal investor in the satellite television channel Screensport. WHSTV complained that Eurosport (established by an agreement between the Eurosport Consortium – a group of EBU member broadcasters including the BBC – and News International’s company Sky Television), the satellite television sports channel (with which Screensport competed) infringed Community competition requirements and disadvantaged Screensport. The nub of the dispute was whether Screensport was improperly disadvantaged in the acquisition of rights to screen sports events by EBU member broadcasters with a stake in Eurosport. The Eurosport Consortium argued in its defence that Sky Television was simply a sub-contractor to the Consortium and that the Eurosport channel did not constitute the anti-competitive arrangement that Screensport had alleged. Indeed the Consortium maintained that ‘Eurosport enjoys the rights of an EBU member’ and that the service has a ‘public service character’ (OJ L 63/38). The Commission rejected these propositions and argued that ‘By contrast the viewing public has tended to associate Eurosport more closely with Sky’ (OJ L 63/38) than with public service broadcasting. The Commission found in favour of Screensport’s challenge to Eurosport. It judged that ‘The joint venture agreements and all related contractual provisions […] constitute an infringement of Article 85(1) of the EEC treaty’ (Decision 19.2.91 recorded in OJ L 63. 9.3.91 pp. 32–44). The piquancy of the case resides of course in the partnership between European public service broadcasters (including the BBC) and News International.

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Broadcasting Organisation and Policy on both sides of the Atlantic 8 In the so called ‘Marino Charter’; a comprehensive policy statement adopted by the EBU at its conference in Marino. 9 See Chapter 5 for discussion. 10 Council of the European Communities (1989) Directive on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities. 89/552/EEC. OJ No L 298. 17.10.1989. pp. 23–30. Council of Europe (1989) European Convention on Transfrontier Television. 5.5.89. Council of Europe. Strasbourg. Commission Decision of 15.9.1989 relating to a proceeding under Article 85 of the EEC Treaty (IV/31.734 – Film purchases by German television stations) OJ L 284/36–44 3.10.1989. Commission Decision of 19.2.1991 relating to a proceeding under Article 85 of the EEC Treaty (IV/32.524 – Screensport/EBU Members) OJ L 63/32–44 9.3.1991. 11 The licence fee is a form of hypothecated (‘earmarked’) tax revenue. As is well known both the level of the licence fee and the proportion of the licence fee which is devoted to broadcasting are set by government. The relationship between BBC and government consequent on these arrangements was described in a Financial Times editorial as ‘the corporation’s longstanding supplicant relationship with government’ (Financial Times 2.9.1992 p. 12). 12 The Public Interest Advocacy Center in Canada and the Communication Law Centre in Australia.

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7

Public Service and the Media Economy – European Trends in the late 1990s

Introduction Competition is not in fact an end or goal in itself. It is simply the most effective and least risky strategy we have for achieving our real policy goals concerning economic growth and efficient public service (van Miert, 1996 p. 7).

Between 1983 and 1998 the European media and communications regime has changed dramatically. In the early 1980s it was (almost) universally presumed that efficient and reliable delivery of electronic media and communications services to the public required state intervention. – telephony was usually provided by a state monopoly and broadcasting by a national public service broadcaster. Of course there were notable exceptions to this rule. In Finland and Denmark there was, and still is, an abundance of local telephone companies; Finland and the UK had and have a significant commercial television sector. Fine-grained analysis yields a host of fascinating exceptions. My generalisation, of course, excludes the print media which, characteristically, were the domain of the private sector. By the end of the twentieth century, private broadcasting had become pervasive throughout the European Union (and Central and Eastern Europe); publicly owned telcos have been pervasively privatised; and on January 1st 1998 all European Union (EU) states (with the qualified exceptions of Greece, Ireland, Luxembourg, Portugal and Spain) had to open their telecommunication markets to competition and the private sector. There has been a massive shift in perception – markets rather than states are now widely seen as thoroughly competent to secure the European public interest in media and communications – as the citation from a speech of the EU Competition Commissioner, Karel van Miert, which opens this paper, testifies. The key agency in this transition has been the European Community – latterly the European Union. The doctrine of ‘ever closer union’ embodied in the Treaty of Rome has inexorably led to the integration of European media and communication markets on the basis of a competitive market as prescribed in the Treaty (notably in Articles 85–90). Full and formal union of the EU’s telecommunication markets has yet to take place – though a very considerable level of integration has already been achieved. But whatever the situation for telecommunications, broadcasting, or strictly television markets, have been converging for nearly a decade and a half following publication of the first controversial initiative launched by a few Commission officials in 1984 – the Television without Frontiers Green Paper, (Commission of the European Communities 1984). Television without Frontiers anticipated improved competitiveness of the European broadcasting and audiovisual sector as a single market was created. It foresaw growth 95

Media and Identity in Contemporary Europe in pan-European television and a consequential strengthening of European consciousness and culture. The Green Paper echoed the European Parliament’s Hahn Report which stated ‘Information is a decisive, perhaps the most decisive factor in European integration’ (European Parliament, 1982 p. 8) and argued that ‘The instruments which serve to shape public opinion today are the media. Of these, television, as an audio-visual means of communication, is the most important’ (European Parliament, 1982 p. 8). Hahn judged that the political integration it desired was unlikely to be achieved while 'the mass media is controlled at national level’ (European Parliament, 1982 p. 8). But rather than fostering pan-European television promoting European integration, the chief effect of Television without Frontiers was to create the conditions for a spectacular growth of commercial television in Europe – growth which took place in individual national (or linguistic) markets rather than as a pan-European phenomenon. Hodgson (1992 p. vii) testified to this explosion in commercial broadcasting and stated that in 1982 there were four commercial television channels in Europe and by 1992 there were 58. By 1998 there were more than 250 (Commission of the European Communities, 1997 p. 4). More new services undoubtedly benefitted viewers and listeners by providing new consumption opportunities, extending choice and, in important respects, increasing the range and diversity of broadcasting services. Thus Television without Frontiers was good for consumers as the European Bureau of Consumers’ Unions had anticipated when it stated that ‘Europe’s consumer organisations […] are deeply concerned at the frosty reception accorded to the Green Paper by the European Broadcasting Union’ (European Parliament, 1985 p. 24). Moreover, Television without Frontiers also had a positive impact on public service broadcasters. Competition stimulated them, or at least some of them, to adopt more efficient working practices and to reorient their programming towards audience tastes – with which they had sometimes lost touch. But though there were benefits to both consumers and public service broadcasters from Television without Frontiers there were also significant losses. The massive expansion in the number of European television channels amplified demand for programming far beyond the ability of the European revenue base to fund new European works. It created a large ‘secondary market’ where archive programming – often from the USA – was recycled. As a consequence, the EU’s audiovisual trade deficit with USA has risen consistently since the mid-eighties to an estimated $3,500m in 1992 (Vasconcelos, 1994 p. 15). The rise is likely to continue. One firmly marked trend in the European media economy has therefore been the domination of European audio-visual trade, and of course world trade, by exports from the USA. The United States’ success is qualified only by the relatively minor countervailing successes of sections of the European audio-visual sector – notably the French film industry and the UK film and television sector (OECD, 1986). The American challenge, strongly evident through the history of the European film industry (see, inter alia, Puttnam, 1997 and Jarvie, 1992), became evident as the control over entry to the European television programme market, afforded by the monopoly public service broadcasters, eroded as Television without Frontiers was implemented. European concerns were not simply economic – there was a pervasive, although far 96

Public Service and the Media Economy – European Trends in the late 1990s from universal, concern about the cultural consequences of liberalisation and competition. This concern has seldom been voiced more eloquently than by Jack Lang, variously Minister of Culture and Communications of France for much of the 1980s and 1990s, who wrote: At a time when Europe, the cradle of Western civilization, loses control over one of the main areas in which contemporary culture is being made – the audiovisual, one can no longer react aesthetically to such liberal or ultra liberal ideologies. Reality demands that concrete steps be taken. (Lang, 1988 p. 20)

However, the death of public service broadcasting monopolies has not always been seen negatively – even by public service broadcasters. The strength of the UK television programme industry and the vitality of the BBC – which still accounts for 44% of the UK TV viewing share and about 47% of radio listening – is often attributed to the early (1955) introduction of competition into the UK television market. Similar arguments have been made concerning RAI – the Italian public service broadcaster. Massimo Fichera, formerly a Vice President of RAI, one of ‘Les Sages’ appointed to review the pilot stage of the European Community’s MEDIA Programme, and latterly Chief Executive of Euronews, spoke of a ‘fruitful balance between market forces and public service requirements’ (Fichera, 1989 p. 23). And Fichera testified to RAI’s ability to meet the challenge of commercial broadcasting and emerge strengthened by it. He stated that in 1985 RAI’s share of the Italian prime time television audience had fallen to 37% whereas that share achieved by Fininvest (Berlusconi) channels was 50%. In 1989 RAI’s prime time share had risen to 49% and Fininvest’s had fallen to 31%. Fichera attributed RAI’s success to scheduling a high proportion of its own productions, to coordinating the scheduling of its channels, to its reliance on mixed funding (i.e. advertising and public funding), and to innovations in programming and technology (Fichera, 1989 pp. 22–3).1 Alasdair Milne (when Director General of the BBC) also testified to the positive impact of competition on RAI. Milne stated (to the Administrative Council of the EBU) that ‘competition from newcomers need not be feared unduly. It could have stimulating effects. Had not the RAI, for example, when threatened some years ago, been stimulated by the competition and had it not been able to meet it in a remarkable way?’ (CA 1704 SPG 2653 May, 1984 p. 37). In the cases of RAI and the BBC, competition engendered a new orientation to market tastes and to the actual, rather than imagined, tastes and interests of viewers and listeners. Competition, and the entry of American programming and entertainment ethos, provoked similar re-orientations and re-valuations in other European public service broadcasters. Guillaume Chenevière, the Director General of the Swiss public service broadcaster, SSR, stated: I had the idea of running a schedule à la carte where viewers would be able to choose a series each week from among a selection of some 50 repeats of French, British and American productions. Not only were the American series the triumphant winners

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Media and Identity in Contemporary Europe chosen by viewers, but they had considerably higher viewer ratings during the summer than those we had obtained with similar productions over the rest of the year. I was forced to recognize the fact that American productions were preferred by our viewers, and that the problem was not one of imposing the European product but of making it competitive. (Chenevière, 1990 p. 18)

If one pervasive response to competition and Americanisation has been to adapt to it and learn from it, a second has been to follow Jack Lang’s injunctions and resist and repel it – hence the inclusion of European content quotas in the Television without Frontiers Directives of 1989 and 1997 (Council of the European Communities, 1989 and 1997). But European content quotas are not the only quotas prescribed in the Television without Frontiers Directive. Whilst European content quotas may reflect concern about the consequences for European audiovisual trade and European identity, the Directive’s quota for independent production reflects the overall emphasis of the Directive on market liberalisation and reduction of entry barriers. Article 5 of the Directive prescribes that either 10% of transmission time or 10% of programme budget be reserved for European independent production. The independent quota is a striking example of the view that, as van Miert stated, public service comes via the market rather than in spite of it. In the UK the independent quota is set at 25% of transmission time and, together with other market opening measures (notably the BBC’s introduction of internal markets and outsourcing options through the Producer Choice policy), has led to a fall (although not yet to the level of international best practice) in production costs estimated to be a 28% saving by one BBC source (David Docherty, Deputy Director of Television, in a statement to the London School of Economics Media Group on June 3rd 1997). Whatever the funding mechanism adopted by national public service broadcasters in Europe, cost savings are inescapably important. The relative importance of the licence fee in public service broadcasters’ finances ranges from more than 90% of income in Scandinavia to about 26% in Iberia.In the case of the UK advertising-financed public service broadcaster Channel 4, income from licence fees and/or taxes currently amounts to 0%.2 But everywhere licence fee funding is likely to decline relative to the volumes of advertising and subscription revenues enjoyed by commercial broadcasters. The UK consultancy, Zenithmedia, estimated that European television advertising finance will rise by 50% in decade between 1994 and 2004; subscription finance is estimated to rise by a factor of 6 in same period – that is by 600%. No-one expects licence fee finance to rise by such a proportion! Moreover, public service broadcasting’s share of broadcasting advertising expenditure has declined – from 44% in 1990 to 28% in 1994 (Zenithmedia, 1995 p. 5). As a consequence, the quality and attractiveness of PSB programming relative to commercial competitors cannot but decline. So what? Why should public service broadcasting not decline? Why should broadcasting services not be provided through market mechanisms rather than through monopolistic quasi state agencies? To answer these related questions we must consider how well broadcasting markets can work. As indicated above the empirical 98

Public Service and the Media Economy – European Trends in the late 1990s evidence, which has accrued from more than a decade of liberalisation, is mixed. Viewers and listeners now have a greater choice among consumption opportunities: programming has become more closely aligned to viewer and listener tastes than heretofore: production efficiency has increased but there have been striking, albeit uneven, increases in import penetration of European broadcasting markets with possibly damaging long term effects on European production capacity and consumer choice. The liberalization of broadcasting markets through technological change and the precedents set by the Sacchi and Debauve cases,3 on which Television without Frontiers was based, led to the mistaken view that broadcasting markets were no longer ‘failed markets,’ in the sense defined by neo-classical economic theory. Certainly some forms of market failure – notably the barrier to entry constituted by spectrum scarcity, and the absence of a price system through which viewers and listeners could signal their preferences and the intensity of their preferences – have been, more or less, redressed by satellite and cable transmission and conditional access systems. But others remain. However, the presumption that broadcasting could be treated as a market like any other led to an host of competition cases assaulting the Community’s public service broadcasters and the EBU in particular. The first major case was the Screensport/Eurosport case in which the Commission judged that the EBU’s ‘joint venture agreements and all related contractual provisions […] constitute an infringement of Article 85(1) of the EEC treaty’ (Decision 19.2.91 in OJ L 63/32–44 9.3.91). Further cases followed – most recently that which saw the European Court of the First Instance in July 1996 respond to complaints from several Italian commercial broadcasters and rule against public broadcasters combining (i.e. through the EBU) to acquire sports rights (Court of Justice of the European Communities. Case T-528/93 11 July 1996). As the Director of the EBU’s Legal Department, Dr Werner Rumphorst, stated, the Commission’s objections challenged ‘the very nature of the EBU, its membership conditions, rights acquisition practices, exclusivity policy, long-term contracts etc.’ (European Broadcasting Union Document SPG 4056 27.5.1988 p. 3). However, although the succession of Community competition cases has put public service broadcasters and the EBU under threat, the Commission has also acknowledged that public broadcasting has served the public interest, however difficult it may have been to reconcile public service broadcasters’ practices with the competition provisions of the EEC Treaty. For example, in 1988, when examining the perennial questions of EBU programme sharing and collective acquisition of rights, DG IV stated ‘the Commission considers that the joint acquiring of television rights for sports events as well as the Eurovision system produce advantages which can be passed on to consumers and are able to outweigh the restrictions of competition’ (Letter from Overbury to EBU 26.7.1988).

Competition, Market Failure and Public Service Broadcasting The question is, therefore, how far is the interest of the European public best served by applying neo-classical economists’ paradigms to broadcasting and how far by other 99

Media and Identity in Contemporary Europe arrangements – specifically by public service broadcasting? The answer is not simple, because there are strong empirical data to testify both to the benefits conferred by competition in broadcasting markets and by non-market, public service, arrangements. Moreover, not only does broadcasting fail to fit the standard paradigms of neo-classical economics, it is a failed market but one in which failure has positive social consequences. Free to air broadcasting is a non-rival product – a particular kind of market failure sometimes called a public good. That is, one person’s consumption of a broadcast does not deny another a consumption opportunity. If I eat an apple it is not available for someone else to eat; whereas if I watch a television programme it is still possible for others to watch it. Moreover, the marginal cost of adding an extra viewer or listener to a broadcast is, in most cases, zero or close to zero. This means that welfare is maximised by free to air, unencrypted broadcasting, by programme sharing and exchanges between broadcasters and by many of the arrangements which European public service broadcasters have evolved through the EBU. Subscription broadcasting is more costly than free to air broadcasting and excludes non-subscribers from consumption opportunities that they could enjoy without disadvantaging any other consumer. When programming which was formally available via free to air broadcasting migrates to subscription broadcasting, viewers and listeners experience an actual loss of welfare. When programmes are screened encrypted, rather than via free to air, even though no-one may be aware of being deprived, society loses. Welfare is reduced because some people, who could consume at zero cost, are deprived of the opportunity to do so. A public good is converted into a private good. Thus social benefits arise from the technical failure of broadcasting markets. Social losses arise from the forced conformity of broadcasting markets to neo-classical prescriptions. However, a very hard-nosed advocate of markets and competition might argue that enabling consumers to signal their preferences, and the intensity of their preferences, through price under a subscription system enables consumers to ensure that supply matches demand and so maximise their welfare. There is force to this argument. Although free to air broadcasters may use audience research to improve the matching of supply to demand in broadcasting and so mitigate the disadvantages inherent in a free to air system, the degree to which consumer welfare is maximised under a free to air or subscription system is an empirical question. However, the conversion of a free to air to a subscription broadcast necessarily involves an output loss (some viewers and/or listeners are excluded) and, moreover, there are limits to which even subscription broadcasting markets can be made to conform to the neo-classical paradigm because there is a further form of broadcasting market failure which applies no less to subscription than to free to air systems. Economic theory recognises the existence of goods which confer long term benefits but which no individual thinks are worth paying for. Examples of this class of good, known as merit goods, include high culture, scientific research, education etc. Because free markets tend to undersupply merit goods, it is generally accepted that there is a legitimate role for the state in providing them – hence public funding for education, the arts, research and so on.4 This is a particularly important consideration for 100

Public Service and the Media Economy – European Trends in the late 1990s broadcasters because free to air broadcasting provides an efficient way of delivering these merit goods to many final consumers. Conversion of European broadcasting markets to subscription markets, although enabling viewers and listeners to signal their preferences by price, does not solve the problem of undersupply of merit goods. Moreover, there is no evidence to suggest that European viewers and listeners would welcome the loss of cheap ‘table d’hôte’ services in exchange for ‘à la carte’ services, however superior an ‘à la carte’ service might be in theory. However, the social value of merit goods and the benefits potentially conferred by public service broadcasting setting a quality threshold can only realised if the services charged with these mandates is widely consumed. Unless public service broadcasting is watched and heard its merit goods are as nothing. As the great Canadian public broadcaster, Sydney Newman, who had so positive an impact on public service broadcasting in the UK, stated, ‘the cost of art in our kind of society has to be in relation to the number of people whose imagination it will excite’ (Newman, 1974 p. 46).5 There is little point to public funding of merit goods if they are consumed by few. Public service broadcasting cannot succeed unless it is popular. It cannot therefore be consigned to a ghetto at the margins of the market, filling the gaps disdained by profit maximising broadcasters.

Making markets fairer and work better There are further rationales for public service broadcasting. Profit maximising broadcasters will not extend services to potential consumers when the anticipated revenues that may accrue from serving these viewers and listeners are less than the costs of doing so. Hence the public service broadcasting mandate to provide two kinds of universal service – geographical universality and programme and audience universality. Geographical universality is achieved through the extension of transmission to communities where the costs of providing service exceed the revenues earned. Programme and audience universality is achieved by serving all, rich and poor, with a range of programmes including those which may be unprofitable. Furthermore, in imperfect markets – and few actual markets work as well as neoclassical theory suggests they should – public intervention in the market can provide a quality threshold below which rival commercial providers of goods and services sink only at their peril. The presence of an effective and efficient public service provider can therefore improve the quality and character of all goods and services in the relevant market. This benefits all consumers – even those who do not directly use the public service. But a public provider can only exert a beneficial impact on the market as a whole if it is an effective competitor – if, that is, it is efficient and popular. Broadcasting and information markets – even if they satisfied all the stipulations of neo-classical economics – will never be markets like any other. Unlike markets for steel or shoes, the resultants from markets in broadcasting and information have an inescapable impact on social solidarity and citizens’ ability to make informed decisions about their political, economic and social lives. But – and here is one of the intractable difficulties of broadcasting and information policy – in other respects broadcasting and information markets are like the markets for steel and shoes. For example, in 101

Media and Identity in Contemporary Europe programme procurement and the provision of other factors of production the competition provisions of the EEC treaty are no less applicable than they are to the market for steel.

EEC Treaty Considerations The provisions of the European Union treaties, and in particular provisions on state aids – notably Articles 90 and 92 – have posed difficulties for public service broadcasters. Licence fee funding is a hypothecated tax and thus, arguably, a form of state aid. That being so, its distribution to public sector organisations and not to commercial organisations with which the public sector bodies compete has been thought incompatible with Article 92 of the EEC Treaty. Article 92 provides that: ‘any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings […] shall, in so far as it affects trade between Member States, be incompatible with the common market.’ DG IV investigated the Portuguese public service broadcaster, RTP, under this provision (case NN 141/95 – Portugal. See Competition Directorate-General of the European Commission, 1996 pp. 48–9). Whilst few services of public broadcasters in individual Member States might be thought to affect ‘trade between Member States’ it is clear that EBU activities and services, such as Eurovision, which is intimately inter-related with many public service broadcasting activities, and pan-European channels such as Euronews, are potentially vulnerable to action under Article 92 of the EEC Treaty. True, Article 92 was amended and the post-Maastricht version now has an additional clause (92 3 d) which permits certain, narrowly defined, types of state aid: aid to promote culture and heritage conservation where such aid does not affect trading conditions and competition in the Community to an extent that is contrary to the common interest.

But this provision, if applied to public service broadcasting, would define legitimate public service programming too narrowly as a high cultural ghetto of ‘culture and heritage conservation’ (see the decision in the RTP case NN 141/95 Portugal). Accordingly, there is considerable merit in an alternative formulation – that of the European Parliament Resolution on the role of public service television in a multimedia society adopted on 19.9.1996 (para 10) to call […] on the Commission to continue to view public funding as legitimate for public service companies provided they strictly fulfil their public service obligations; welcomes the fact that the Commission is currently preparing guidelines on state aid for culture, the arts and the audiovisual sector in order to clarify state aid policy in this field; considers that public funding for public service broadcasting organisations does not constitute state aid as long as the overall funding, including any commercial revenue from advertising and sponsorship, is commensurate with the broadcaster’s public service remit; confirms that licence fees paid by customers to broadcasters are not covered by Article 92 of the EC Treaty.

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Public Service and the Media Economy – European Trends in the late 1990s Public Service Broadcasting: Ideal and Reality Although Television without Frontiers and the succession of competition cases which have followed its publication and the Sacchi and Debauve cases constitute by far the most important aspect of European broadcasting policy, the position they embody is not unchallenged. The Commission and the Parliament have also fulsomely testified in support of public service broadcasting. Carole Tongue MEP’s Report (1996) and the European Parliament’s Resolution on the role of public service television in a multimedia society (adopted on 19.9.1996) are representative recent manifestations of a consistent current of support for public service broadcasting in the European Community which resulted in the addition of the public service broadcasting protocol to the European Treaty in 1997. The Amsterdam Protocol states, inter alia: The provisions of this Treaty shall be without prejudice to the competence of the Member States to provide for the funding of public service broadcasting in so far as such funding is granted to broadcasting organisations for the fulfilment of the public service remit as conferred, defined and organised by each Member State.

But it is a matter of record that the internal market, as presently constituted, is hostile to public service broadcasting. It could not be otherwise for, seen from the vantage point of the neo-classical economic theory which underpins the EEC Treaty, public service broadcasting is aberrant and offensive because it does not display the characteristics of a well-functioning market. It exemplifies market failure. Yet, as I have shown, there are social benefits which attach to this form of market failure and which will be lost if the broadcasting market is made to conform more closely to a neoclassical model. Many of these arguments could be mobilised to support quite different broadcasting arrangements to those we know in Europe. All free to air broadcasting (including profit maximising advertising financed broadcasting) is non-rival; merit goods can be provided by incentivising commercial broadcasters to do so via subsidy; universal service and an effective quality threshold might also be established via a subsidy fund and/or regulation. In theory public service broadcasting is not necessary. But why abandon well-established institutions that discharge these tasks in favour of an unproven theoretical alternative? Why reinvent the wheel? Whilst technological and regulatory change have provided a welcome increase in consumption opportunities and, I repeat, increased consumer choice among a diversity of services, intervention in broadcasting markets, and thus public service broadcasting, is still indispensable. However, not all European public service broadcasters are equally well-fitted for the challenges of the future and not all aspects of their policy and practice are easily defended. To argue that we need public service broadcasting is not necessarily to argue that we need the public service broadcasters we now have. But what do we mean by public service broadcasters? Clearly it cannot be the same as members of the EBU. For historical accident has arbitrarily included broadcasters within the sacred circle of EBU membership who are indistinguishable in virtually 103

Media and Identity in Contemporary Europe every respect from the commercial broadcasters who are rigorously excluded from EBU membership. And how should public broadcasters be financed? Clearly the public good and merit goods arguments point to public funding for broadcasting as do universal service considerations. All should have access, as an entitlement of citizenship, to the means to communicate and to the information necessary for full participation in the economic, social and political life of their communities. But how can we ensure that public funding does not give public broadcasters access to a bottomless purse which would enable them to neglect the tough disciplines of efficient operation and to unfairly compete against rival commercial firms? Most public broadcasters will laugh sardonically at the proposition that they enjoy access to a bottomless public purse – but the relationship between broadcaster and government cannot be neglected. It goes to the heart of broadcasters’ independence of government, to the reasonable concerns of commercial service providers about improper state aid to industry, and to the over-riding question of how far public funding for public service broadcasting can be reconciled with the requirements of the founding treaties on which the European Union is based and with the prescription of the WTO, GATS, GATT and the rest of the alphabet soup of international trade agreements.

Changes to Public Service Broadcasting The Amsterdam Protocol provides an important measure of protection for public service broadcasters from the state aids provisions in the Treaty and is necessary – although unlikely to be sufficient – if we are to continue to enjoy the social gains of market failure. But public service broadcasters, the distinctive institutions Europe has developed to capture these benefits, must also change. The licence fee, with all its faults, is the least worst way of funding public service broadcasting. Governments’ financial provisions to broadcasters, and for broadcasting, must be open and transparent, and the licence fee must be (to adopt the excellent terminology of the Parliament’s Resolution on the role of public service television in a multi-media society of 19.9.1996) ‘commensurate’ with the mandate given to public service broadcasting. There must neither be an endless process of dipping into a bottomless purse of state funding to bail out failing broadcasters nor an underfunding so that efficient public service broadcasters are unable to discharge their mandates effectively A clear mandate for the broadcaster is required in order to realise a transparent funding regime, where resources commensurate with the effective discharge of the public service broadcasting mandate by an efficient broadcaster flow to the institution(s) charged with these responsibilities. The basis on which delivery to the specified mandate is costed must also be open and transparent and funding should be linked to explicit performance indicators (PIs) (See Collins and Purnell, 1995 and 1996). Moreover, if the clear social benefits to European citizens, which are conferred by long standing collaborative arrangements between public service broadcasters such as Eurovision, are to continue then those participating in these arrangements must either be genuine public service broadcasters, and not commercial broadcasters who through historical accident enjoy EBU membership, or EBU membership must be significantly 104

Public Service and the Media Economy – European Trends in the late 1990s widened so that commercial broadcasting outsiders are no longer arbitrarily excluded from access to facilities enjoyed by some of their commercial competitors.

Conclusion Clearly, if the contribution of public service broadcasters to democracy, civil society and to the demotic and elite cultures of the European Union is to be preserved and strengthened, changes to the legal status of public service broadcasters, along the lines proposed by the European Parliament in 1996 and partially enshrined in the Amsterdam Treaty, are both required and justified. However, they are unlikely to be sufficient. The RTP case has established a minimalistic definition of public service broadcasting – a definition supported by the phrasing of the European Commission’s Convergence Green Paper (Commission of the European Communities, 1997b).6 But such changes cannot be fully justified without changes to European public service broadcasters themselves. The challenges of the future point to a renewal of public service broadcasting: to public service broadcasters genuinely independent of government; to transparent funding commensurate with public service broadcasting’s public service mandate – a mandate which must be clearly defined with explicit performance indicators – if its exemption from the treaty provisions on state aids is to be legitimate. The rules which make some broadcasters eligible for membership of the EBU and others, apparently no less commercial, ineligible need revision if the EBU is not to appear a cartel of privileged insiders. Further, we must recognise the narrow limits within which the neo-classical market paradigm is applicable to broadcasting. Certainly public service broadcasters must be efficient – fostering competition in programme supply, programme production and a host of other broadcasting markets can do much to make it so. But real social benefits accrue from the non-rival, public good character of broadcasting and the form of market failure which it represents. These benefits must not be foregone by the conversion of public goods into private goods and an eclipse, total or partial, of free to air public service broadcasting by subscription services. Moreover, broadcasting markets will undersupply ‘merit goods’ and thus public funding is needed to redress this form of market failure. Although, in theory, a subsidy fund à la New Zealand could channel funding to any or all of a host of broadcasters, public or commercial, we should not lightly abandon the existing instruments we have to hand so long as they prove to be effective and efficient. Most of all we should not deny public service broadcasters the duty to be popular. For if their programmes remain unwatched they can neither exercise a beneficial effect on the market as a whole, nor effectively contribute to society by bringing merit goods to the viewers and listeners who pay for them. Too often discussion of broadcasting policy issues becomes polarised as a polemic between advocates of public service and the market. The issue is better stated as one of the appropriate balance between public service and the market. Competition and the introduction of markets has clearly improved the internal efficiency of public service broadcasting, not least in the United Kingdom. Competition between public and commercial broadcasters for the attention of viewers and listeners has promoted 105

Media and Identity in Contemporary Europe innovation and a better matching of offer to demand than was hitherto the case. We must therefore recognise the real, albeit limited, applicability of the neo-classical competitive market paradigm to broadcasting – a paradigm which is neither totally irrelevant nor universally applicable – and use markets and competition to strengthen public service broadcasting and use public service broadcasting to strengthen competition and make markets work better. It is not a matter of public service broadcasting or the market but of public service broadcasting and the market.

Acknowledgements This chapter was first published as ‘Public Service and the Media Economy: European trends in the late 1990s’ in Gazette. 1998 V 60 N 5. pp. 363–76. It is based on a paper delivered at the seminar ‘The Future of Public Service’ held at the University of Turku, Finland, on December 11–13 1997, which drew on the author’s previous presentations to the Experts Meeting on Public Service Broadcasting in Europe, February 1997, convened by the Ministerie van Onderwijs Cultuur en Wetenschappen in the course of the Netherlands Presidency of the European Union and to a seminar series organised by RTP and SCALE on Public Service Broadcasting, June 1997, in Lisbon. He is grateful to the organisers of these three meetings for their invitations to him to contribute and to the participants in discussion who helped him clarify, and sometimes even change, his views.

References 1 2

3 4

5 6

In 1992 RAI lost some of the ground it had won back from Fininvest. Its prime time share declined to 47% and Fininvest’s grew to 43% (Espace N 18 February 1993 p. 6). There is a ‘fallback’ position. Should Channel 4’s income from advertising, sponsorship and rights fall below the level deemed necessary for discharge of its public service mandate then there is statutory provision for subvention by the Secretary of State for Culture, Media and Sport. Sacchi European Court Reports Case 155/73 [1974] 409; Debauve, European Court Reports Case 52/79 [1980] 833. Of course, establishing a case for merit goods does not solve the difficult second order issue of deciding how many resources should be directed towards the provision of merit goods or deciding how much of an overall quantum of resources devoted to merit goods should be directed to each rival merit good claimant – education, research, public service broadcasting, public health etc. Newman died on October 30th 1997. The Green Paper states, inter alia, ‘The public service mission entrusted to public service broadcasters is recognised as of cultural importance and the organisations with responsibilities in this regard are entitled to appropriate funding, subject to compatibility with the rules of the Treaty. […] Traditional public broadcasters will need to reappraise their role in the convergent environment’ (Commission of the European Communities 1997b, at Chapter IV. 3 np).

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Supper with the Devil: A case study in private/public collaboration in broadcasting –The genesis of Eurosport. Feature films and sport are the two most powerful weapons in the Sky Barons’ armouries (Clarke and Riddell, 1992 p. 203).

Introduction Less than two decades ago European broadcasting was dominated by public service broadcasting monopolies providing viewers (and listeners) with services free at the point of use and services which, notionally at least, were created for the public interest. Now public service broadcasters are in a numerical minority and their relative strength is declining fast. Hodgson (1992 p. vii) observed that in 1984 there were four commercial television services in Europe, when she wrote in 1992 there were 58. In late 1996 there were between 250 and 300. And, between 1991 and 1994 European public broadcasters’ revenues increased by only 15.8% whereas commercial broadcasters’ income grew by 63.6% (Screen Digest, April 1996 p. 81). Moreover, the sharp dividing lines between public service and commercial broadcasters are eroding: • the BBC, for example, entered a partnership with commercial broadcasters to exploit its programme archive through the satellite television channel ‘UK Gold’; • deft footwork, marrying French public service and commercial broadcasters in a GIE (Groupement d’Interêt Économique) – has enabled the subscription channel Canal + and the advertising financed TF1 to enjoy the benefits of membership of the European Broadcasting Union; • commercial and public service broadcasters co-produce programmes (indeed ‘decoupling’ of programme production from the bundling, scheduling and branding activities of making a television channel and the introduction of market mechanisms to the supply of television programmes to the BBC has led to the BBC transmitting programmes purchased from UK commercial television broadcasters); • and, of course, almost all public service broadcasters (with the notable exceptions of the BBC and public service broadcasters in some Nordic countries) are, in part or whole, financed by advertising revenues. One of the chief drivers of this pervasive blurring of the boundaries between public service and the market is the striking escalation in the cost of programming at a rate which far exceeds the growth in revenues enjoyed by public service broadcasters. Sports rights, in 107

Media and Identity in Contemporary Europe particular, have been characterised by ‘sharply escalating costs’ (BBC, 1996 p. 20) – an escalation exemplified by the 12% rise in the average cost per hour of sport on BBC television between 1994/5 and 1995/6 in a period in which the average cost per hour of other programme types declined by 2% (derived from BBC, 1996 table 5 p. 94). The most striking and controversial instance of these tendencies in the UK has been the four year agreement between the English Premier soccer League, the BBC and BSkyB, granting BSkyB exclusive rights to the screening of live Premier League soccer for a payment of £670m and the BBC rights to show extracts – ‘highlights’ – from games for a payment of £73m.1 The high price of television sports rights is not an exclusively British phenomenon. The deterioration in the bargaining power of British broadcasters vis à vis rights owners, and of public service broadcasting in particular, is representative of a European condition. Formerly, the dominant European public service broadcasters had established, and maintained, a purchasing monopsony. Where they competed with commercial broadcasters (notably in the UK where Europe’s first commercial television service had been established in 1955) public broadcasters and their commercial rivals often agreed to share or divide markets rather than to compete for programming rights. Whannel rightly described UK television sport as a long established ‘buyer’s market’ (Whannel 1992 p. 21). The strength of the buyers was founded in their co-operation – never more important than in European public broadcasters long-established collaborative establishment of a purchasing cartel the European Broadcasting Union (EBU). Eugster, the author of the only substantial history of the EBU, attributes the origin of the EBU’s predecessor, the IBU, to broadcasters’ desire to strengthen their bargaining power with rights holders; ‘Broadcasters’ concern for protecting themselves from high copyright fees was a primary reason for creating the International Broadcasting Union’ (Eugster, 1983 p. 34). They did so by combining to establish a monopsony – an arrangement that was fiercely, if largely unsuccessfully, resisted by rights holders. But the ‘buyers’ market’ identified by Whannel and European public broadcasters’ successful monopsony have been transformed by competition between broadcasters for rights, following the growth of commercial television, and subscription television in particular. Competition has driven up the cost of rights and consequently programming has increasingly migrated from free to air to subscription services. This process has been paralleled by a general European regulatory rebalancing of intellectual property regimes to favour rights holders. A striking anticipation of contemporary initiatives in creative financing and collaboration between, apparently incompatible, commercial and public service business partners is to be found in the EBU sponsored satellite television sports channel Eurosport.

The Genesis of Eurosport Sport and news are the two pillars of cooperation between the Union’s Members in programme matters, and its [sic] important to strengthen this cooperation in both of them and to render it more active (Report of the Study Group on the Future of Public Service Broadcasting [the Wangermée Group] AG 551 SPG 2642 June 1984 p. 14).

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Supper with the Devil In 1986, after the failure of its flagship satellite television channel Europa (a mixed programming service, building on the foundations of the pioneering Eurikon service, which had lasted from October 1985 to November 1986 – see Collins, 1993), EBU members undertook development of two further pan-European satellite television channels: the thematic channels, Eurosport and Euronews (which entered service in 1989 and in 1993 respectively). The burgeoning success of commercial thematic channels and the failure of Europa’s mixed programming format led public service broadcasters to adopt a thematic format for their new European channels and to play to their strengths by drawing on the EBU’s core resources in sport and news. Eurosport and Euronews departed from established public service broadcasting norms in that they were launched in partnership with interests from which European public service broadcasting had formerly maintained a scrupulous distance – commerce and the state. These were News International and the European Community, respectively. The EBU first considered launching a thematic sport channel in 1981 when an EBU official, Jean-Pierre Julien, proposed that the EBU’s experimental satellite channel Eurikon (see Collins, 1993 for an account of Eurikon) be launched as a sports channel.2 The EBU’s Sports Working Party, an ad hoc working group of representatives of EBU members, advocated an EBU sports channel and ZDF, the German public service broadcaster which was the principle proponent of an EBU renewal strategy based on exploitation of the EBU’s extensive pool of sports rights, proposed that Europa be established as a sports channel – using the so called ‘Project B’ format. In the event, Europa was launched as a mixed programming channel but its failure in 1986 spurred the Sports Working Party to return to a ‘Project B’ type of service. Its members advocated a sports channel which would offer European public service broadcasters the ability to: • make better use of rights already acquired by the EBU and individual members, • form new relationships of cooperation with International Sports federations, which could ensure the EBU’s future in the area of sport, • preempt any initiative from competitors to establish a similar service (CA 1819. SPG 3336. 20.6.1986 p. 1). ZDF strongly supported the proposal and (on 31.6.1986) its Intendant, Dieter Stolte, wrote to the EBU President, Albert Scharf, stating that ZDF was ‘in favour of every step by EBU, bringing us back to the so-called ‘Project B’.’ The Sports Working Party proposed using Europa (still in operation at the time) to pilot a sports service screening a ‘wide variety of sports events’ to complement members’ national sports programming. The pilot service was to have sound-tracks in English, Dutch, German and Portuguese, and would cost an estimated SFr 1.8m for the first six months of the experiment 3 (CA 1819 SPG 3336 20.6.1986 pp. 3–4). The emphasis on complementarity responded to many EBU members suspicion of the new satellite services and provided a convenient fig leaf for a service which would inevitably compete with EBU members’ terrestrial services for viewers’ attention. 109

Media and Identity in Contemporary Europe The EBU’s sports channel was ‘pulled’ by the EBU’s persistent desire for a presence in the growing satellite television market and ‘pushed’ by its recognition that its bargaining power, with both advertisers and the owners of sports rights, was weakening. In January 1986 the Sports Working Party had noted that ‘it was becoming increasingly more difficult for member Organisations to schedule all the sports that were available under contracts concluded either by the EBU or by individual member organisations. In addition, the financial contribution of advertisers was of the greatest importance to most Federations, but advertisers were not prepared to invest in sport unless they had certain limited guarantees on the exposure’ (SG/S/372 24.2.1986 p. 2). If EBU members did not fully exploit the sports rights 4 they risked losing them to commercial sports channels able both to offer rights holders higher licence fees and advertisers better exposure to viewers. The EBU Secretary General echoed the Sports Working Party in a statement to the Administrative Council later in 1986: One of the areas where competition is becoming tougher is that of sporting events. It was felt severely during the first talks for purchase of the rights of the 1988 Olympic Games and recent negotiations for the future World Football Cups. For the moment it is still in the interest of the big Federations and the IOC to give preference to the EBU, which guarantees true professional coverage of the events and a wide distribution in Europe […] . However this is no time for complacency: the competitors of the hitherto strongly placed public service organisations are awaiting their opportunity. The financial offers they are capable of making are enticing. They can act swiftly to amass the necessary funds – which is still not the case for EBU – and furthermore they have no problem in accepting the kind of advertising which the existing EBU rules forbid (CA 1789 SPG 3292 14.5.1986. p. 3).

A satellite sports channel promised to enable the EBU to use rights more fully and maintain the access to leading sports events which European public service broadcasters, and their audiences, had traditionally enjoyed. Not only would a satellite sports channel make the EBU a more attractive partner in the eyes of sports federations but the sports channel’s revenues from advertising would help defray the increasing costs of sports rights. Stolte noted that ‘ZDF’s transmission rights payments for the Winter [Olympic RC] Games rose by 538% and for the Summer Games the figure was 875% (Stolte, 1993 p. 4). Although EBU members might fear the competition posed by an EBU satellite sports channel, they preferred competition to come from within the European public service broadcasting ‘family’ rather than from a commercial sports channel. As members of the Sports Working Party recognised, ‘it was better for competition on sport to be controlled internally than to be left to external activities such as those of Mr Berlusconi’ (SG/S/372 24.2.1986 p. 3). The sudden bankruptcy and closure of Europa made possible the accelerated development of a dedicated sports channel and left a clear field for EBU members – notably the BBC and ZDF – which had opposed the mixed programme format panEuropean services and were adamantly opposed to the resurrection of Europa (SG/S/653 18.6.1987 p. 3). Moreover, the death of Europa strengthened the hand of 110

Supper with the Devil EBU members arguing for a more business like approach to the provision of new services. RAI, for example, insisted that the new sports channel be launched in conjunction with a commercial partner. Vittorio Boni’s (the Chairman of the EBU Television Programme Committee and RAI’s representative) consistent support for the EBU’s first satellite channels, Eurikon and Europa, made his insistence on a commercial partner ‘to take the major financial risk’ (SG/S/653 18.6.1987 p. 2) particularly telling.5 Accordingly, throughout 1987, the EBU negotiated with possible commercial partners which included Sky Channel, Super Channel, Visnews and the Dutch company Proclama. Eventually the EBU’s ‘Hart Group’6 (which was responsible for these negotiations) recommended News International as the EBU’s partner. News had, it judged, ‘the necessary finance, and through its subsidiary Sky Channel, the expertise, experience and capability in the areas of sales, marketing and accessing cable systems’ (Report of the Hart Group dated 30.11.1987 p. 2).

Public Service Broadcasting, the devil and the long spoon The Hart Group’s recommendation was a devastating indictment of European public service broadcasting. After five years of first hand experience of pan-European satellite television, EBU members recognised that they needed a commercial partner to launch a viable satellite service. Moreover, their preferred partner was the very commercial rival whose innovatory service in 1982 had tipped the EBU and its members into launching its satellite television channels Eurikon and Europa. Far from its position in 1982 when the EBU urged members to ‘take the utmost caution if they are contacted by any enterprise such as Satellite Television Ltd’ (Decisions of the Administrative Council dated 18.1.82 SPG 1801 inf) the EBU now underwrote a partnership between Rupert Murdoch and European public service broadcasting. The piquancy of this reversal was increased by the match making role played by Europe’s flagship public service broadcaster the BBC.7 The EBU’s alliance with News International perfectly illustrated the extent to which time honoured values and allegiances had been overturned and the wall between commercial and public broadcasters had been breached. Whereas in 1984 the Voorzitter of NOS 8 could confidently invoke the BBC and its history as a touchstone of public service values, in 1987 the BBC was inviting the devil to supper without the benefit of a long spoon. For outside observers, and not least DG IV, the EBU’s alliance with News International in Eurosport amplified the uncomfortable inconsistency between the EBU’s overt theoretical commitment to a pure vision of public service broadcasting, manifested in its continued refusal to admit commercial broadcasters to membership, and its actual practice of close links with some commercial broadcasters.

Supper with the Devil The need to preserve public service broadcasters’ access to sports events, coupled with EBU members’ inability to capitalise the development of a new television channel, meant that a partnership with a private broadcaster was unavoidable. In consequence, the control of the new sports channel had to be decoupled from the public service broadcasters whose interests it had been developed to serve: 111

Media and Identity in Contemporary Europe It was clear that since the interests of any partner were to make the channel a profit making venture, thereby justifying the initial financial risk, freedom should be given to the channel to run its own affairs (SG/S/738 21.10.1987 p. 3).

Partnership contracts were signed by an EBU consortium (numbering 16 EBU members from 14 countries 9) and News International on 23.12.1988. They provided for joint ownership of the Eurosport channel by the EBU consortium and News International. News International was to capitalise the anticipated four or five years of initial losses; EBU members were to acquire programme rights for the channel. The deal was attractive to both parties. The EBU was to charge Eurosport high fees for access to its pool of sports rights and, because of these high fees, Eurosport would make losses which News International would set off against profits made elsewhere. News International would thus reduce its overall liability to corporation taxes. Profits were to be divided equally between the Consortium and News International. Eurosport thus secured public funding for a joint public/private broadcasting venture through the tax which would otherwise have accrued to the national exchequers of the countries in which News International’s operations were domiciled. This inventive form of public funding for broadcasting was enigmatically recorded by the Hart Group on 5.10.1987: it was accepted that the value of the programmes should be fixed as high as possible, which could be an advantage to the fiscal position of the channel (SG/S/738 21.10.1987 p. 3).

This financial structure, which enabled the EBU to load a substantial portion of the costs of its sports rights on the taxpayers of the countries of domicile of News International’s subsidiaries, was accepted by the EBU early in 1988 (SPG 3951 SG/S/781 4.2.1988 p. 4). The complex corporate structure necessary for these arrangements was achieved by dividing Eurosport into a sales company wholly owned by Sky Channel (Satellite Sports Sales) and a production company owned 50/50 by the EBU Consortium and Sky Channel (Satellite Sports Services).10 Eurosport began transmissions on 5.2.1989 for six hours daily from the Astra and ECS satellites in English, German and Dutch. Between 75% and 80% of its programming came from EBU members. In 1990 Sky merged with its principal UK rival, BSB, to form a new company – BSkyB. BSkyB judged that the BSB sports channel provided the best basis for the merged company’s sports service and withdrew from Eurosport and following Sky’s withdrawal Eurosport ceased transmission between May 6th and May 22nd 1991. The Eurosport Consortium subsequently re-established the Eurosport service in partnership with the French commercial broadcaster (and EBU member) TF1.11 This complicated history suggests that a categorical distinction between public service and commercial broadcasting is difficult to sustain. Not only does this finding challenge established academic paradigms12 which (whether as an ideal type or in reference to a proposed empirical reality) draw sharp distinctions between public 112

Supper with the Devil service and the market but also indicates how difficult will be the task of those who now seek to establish a special legal status for public service broadcasters in Europe. How is public service broadcasting to be sufficiently clearly defined to include all the institutions and practices that have to be included and exclude all those that have to be excluded? How are public service and commercial broadcasting to be differentiated? An ‘ideal type’ may provide useful analytical distinctions for heuristic purposes and, perhaps even the creation of new institutions, but it has limited usefulness in establishing the justiciable distinctions necessary to establish a distinct status for public service broadcasting in contemporary European circumstances (eg in a new protocol to the European Union Treaty).13 Supping with the devil is likely to continue to be the fate of European public service broadcasters – not least because programme prices are likely to continue to rise at a greater rate than public service broadcasters’ programming budgets. In turn, the increasingly fuzzy distinctions between public and commercial broadcasting will leave European public service broadcasters vulnerable to regulatory assault from the European Union’s competition authority, DG IV, concerned to ensure that the provisions of the European Economic Community Treaty (the Treaty of Rome) on state aids to industry (e.g. via licence fees) and fair competition are not breached by hybridised commercial/public service enterprises. The consequential constraints on public service broadcasters is likely to leave them increasingly vulnerable to what the Chairman of the BBC, Sir Christopher Bland, described as one of pay television’s chief battering rams – its growing dominance in sports programming.14 However important sports rights are, they have been and will be as a weapon in the armoury of the Sky Barons,15 the chief importance of this story, of European public service broadcasters’ partnership with News International, is the graphic illustration which it provides of the difficulty of clearly differentiating public from commercial broadcasters in contemporary Europe. Yet a clear distinction between commercial and public service broadcasters has never been more necessary. The weight of the competition provisions of the European Union Treaty will bear inexorably on public service broadcasters’ long standing practices and institutional arrangements.16 Without specific protection for public service broadcasters, e.g. on the lines proposed by the European Parliament (1996), public service broadcasting will be ground between the millstones of European Union competition law and well-funded commercial rivals. But such protection will depend on an ability to draw clear, justiciable, distinctions between public and commercial broadcasting – a distinction that a history of suppers with the devil makes hard to define.

Acknowledgements This chapter was first published as ‘Supper with the devil: A case study in private/public collaboration in broadcasting – The genesis of Eurosport’ in Media, Culture and Society, 1998 V 20 N 4 pp. 653–63. It draws on research conducted under a grant awarded by the Economic and Social Research Council (R 00023 2159). The author expresses his thanks to the European Broadcasting Union, and particularly to its 113

Media and Identity in Contemporary Europe librarian, Jean Cerentola, for assistance and co-operation. He also thanks the editors of Media Culture and Society for their comments which have enabled him to clarify and strengthen his arguments.

References 1 For discussion and historical context see Blain et al. (1993) Chapter 2. 2 The title of both Eurikon and Europa sports programmes was Eurosport. 3 A total calculated on the basis of the incremental costs which attached to the pilot, and not the fully attributed cost of use of Europa, the Eurovision system or the costs of rights and Eurovision circuits 4 Noble Wilson, formerly Controller of International Relations at the BBC and Vice-Chairman of the EBU Television Programme Committee stated that ‘the members of Eurovision transmit between 15 and 20 percent of all the sports events for which they have the rights’ (Wilson, 1988). 5 Boni sponsored the preparation of a Business Plan for the Sports Channel by the UK company Parallel Media (in which Mike Luckwell – formerly the Managing Director of Carlton Communications – played a leading role). In 1986, during Europa’s terminal crisis, Parallel Media had offered to acquire a share in and to undertake the management of Europa. RAI (and RTP and RTE) supported this proposal and advocated a partnership with Parallel Media after Europa was wound up on the basis of Parallel Media’s business plan which proposed co-operation with Sky Television, hitherto the EBU’s arch antagonist. 6 Named after its Chairman, Alan Hart of the BBC. Hart had been Controller of BBC1 and, in 1984, became Special Assistant to the Director General with special responsibility for relations with the EBU. Hart subsequently became Controller of International Relations for the BBC. 7 The BBC collaborated with Sky Channel in joint acquisition of UK sports rights in order to strengthen their respective competitive positions vis a vis their shared rival ITV. 8 Eric Jurgens wrote to the then Secretary of the EBU, Regis de Kalbermatten, stating ‘it is wiser, when reflecting on possible changes, to take notice of the maxims of BBC’s founding father Reith than of the press bulletins of Mr Rupert Murdoch’ (Jurgens’ letter to de Kalbermatten, 3.4.1984 p. 4). 9 ORF, BRT, RTBF, DR, YLE, TF1, A2, ERT, RUV, RTE, RAI, NRK, RTVE, SVT, BBC, SRG. Subsequently TF1, A2, left and JRT, TRT, CYBC, and IBA joined the Consortium. Although the initial conception of Eurosport, ZDF’s programme concept ‘B,’ originated in Germany neither the ARD nor ZDF joined Eurosport. The legal basis for German public broadcasting did not permit German EBU members to participate in a commercial venture such as Eurosport. Other members subsequently joined the Consortium and the German Länder modified the rules which had hitherto inhibited the participation of public broadcasters in commercial transnational television services. However the new arrangements (New Media Markets 18.7.1991 p. 66) required the unanimous approval of the 16 Länder broadcasting authorities for ZDF or the ARD to participate (up to 49.9% in any enterprise which did not carry advertising directed exclusively to German viewers) in trans-national ventures. 10 A full account of the corporate structure of Eurosport (when run under the agreement between the Consortium and Sky Channel) is given in OJ L 63/32–44 9.3.91). 11 TF1 was privatised in 1986 but retained EBU membership. 12 See, inter alia, Blumler (1992), Garnham (1983), Keane (1991). 13 See, inter alia, the Report of Carole Tongue MEP (1996), the European Parliament’s Resolution on the role of public service television in a multi-media society (adopted on 19.9.1996) and the record of the Experts Meeting on Public Broadcasting in Europe (OCenW/NOS 1997).

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Supper with the Devil 14 Bland commented on BSkyB’s market power stating ‘News International and BSkyB between them have […] a near monopoly of those programming ‘battering rams’ sport and movies’ (quoted in The Guardian 20.11.1996 p. 3). The dominance, to which Bland referred, may be, at least partially, mitigated by competition authorities’ increasing recognition that commercial broadcasters’ possession of exclusive rights may be used anti competitively and by the ‘listed events’ provisions of the new EU ‘Television without Frontiers’ Directive. See, inter alia, the UK Director General of Fair Trading’s finding that ‘BSkyB’s [the UK’s chief pay television service in which News International is the largest shareholder RC] acquisition of premium programming has created a barrier to entry’ and that ‘the barriers to entry raised concerns that […] the competitive process is being impaired’ (Office of Fair Trading Press Release July 1996). On 16.4.1997 the Conciliation Committee of the European Parliament and the European Council agreed the terms of the new ‘Television without Frontiers’ Directive. this provides for each Member State to publish a list of events, of major national importance, which must be ‘available to the public on freeto-air television.’ Other EU States must respect these lists (information and citation from EU web site on 25.4.1997). 15 Williams (1994 p. 383) claims that ‘exclusive ‘live’ coverage of Premier League soccer from England has been the key cultural product in establishing BSkyB as a major European-wide pay-to-view satellite channel.’ His article provides a succinct history of the growth in importance, and interdependence, of pay television and exclusive sports rights in the UK. 16 See, inter alia, the judgement of the European Court of the First Instance in July 1996, in response to complaints from several Italian commercial broadcasters, which ruled against public broadcasters combining (i.e. through the EBU) to acquire sports rights (Court of Justice of the European Communities. Case T–528/93 11 July 1996).

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9

Cultural Development in an Open Economy – Trading In Culture: the Role Of Language

Introduction Understanding the relationship between economic organisation and culture is not straightforward. Not least because the economic characteristics of cultural productions conform imperfectly to those which have formed the normative basis of neo-classical economics (see, inter alia, Baumol and Bowen 1966, Collins, Garnham and Locksley, 1988, Hoskins, McFadyen and Finn, 1994 and Sturgess, 1992). Moreover there is often a significant disjuncture between the meanings attributed to the terms used to discuss such matters by scholars on one hand and in popular speech and by politicians and policy makers on the other. Williams (1976) has noted how difficult it is to define culture (and thus cultural development). There are also difficulties in defining an open economy. Whereas in popular usage (and in the public policy agenda which preceded SSHRC’s commissioning of a ‘State of the Art Review of Cultural Development in an Open Economy’) an open economy is often seen as a free trade economy characterised by weak national control over economic activity, whereas for scholars an open economy is simply one where cross-border flows of traded and non-traded goods and services are significant in comparison to the domestic circulation of goods and services. However, it is clear that cultural development in an open economy is perceived by many to be an oxymoron. For trading patterns in an open economy entail an international division of labour which in the cultural domain means that cultural production comes to be located in some locations at the expense of others. This locational specialisation is perceived to be problematic for three reasons. First, culture is becoming increasingly important as a tradeable commodity. The growing importance of trading in information is one dimension of the supposed global transition of developed societies from manufacturing to information based economies (Bell, 1976).1 Thus the balance in cultural trade becomes as important for governments as the trade in manufactures or primary products. This may sound a hyperbolical claim, but Marcel Masse, Minister of Communications, claimed that the ‘cultural sector is practically as important as the entire agricultural sector in Canada in terms of GNP’ (Cinema Canada, May 1985 no 118 p. 118). Second, there is a strongly held presumption that culture is a vital social glue and that without a common culture, shared by citizens, states and the political authorities which govern them will lack legitimacy and robustness. As CBC/Radio Canada put it in its evidence to the Task Force on Broadcasting Policy: ‘At the very heart of our 117

Media and Identity in Contemporary Europe sovereignty is our culture. there can be no political sovereignty without cultural sovereignty’ (CBC, 1985 p. 9). Third, cultural markets (or, in a moderate version of this thesis, some important cultural markets, notably broadcasting) are perceived to have failed. Failed in two senses: in the technical sense that they do not conform to economists’ definition of a wellfunctioning competitive market, but also in the sense that they may not deliver the outcomes desired by society as a whole. Economists regard cultural markets as failed markets because cultural goods are non-rival and non-excludable. Consumers lack adequate means to signal their demand, or the intensity of their demand to suppliers, and thus supply may not correspond to demand. Moreover, a market in culture is believed not to capture all the potential benefits of cultural production. Society as a whole may benefit from the production and distribution of culture whereas individual consumers and producers have no interest in procuring benefits for society as a whole (see, inter alia, Applebaum and Hebert, 1982, Hoskins and Mirus, 1988, Peacock, 1986). Thus the development of an open economy and cultural free trade, can be, and more often is perceived to be, economically and socially damaging, in that it threatens the prosperity of information producers, the cultural level of the population and the cohesion of society itself. However, there are strong countervailing presumptions in favour of an open economy and cultural free trade. The dominant international trade regime, the GATT (General Agreement on Tariffs and Trade), is based on the premise that aggregate wealth is increased through free trade (although services, and thus communications and culture, are not yet integrated into the GATT regime). The Universal Declaration of Human Rights adopted by the United Nations (and other major international agreements such as the European Declaration on Mass Communications and Human Rights) enshrine freedom of access to information (and thus to culture) across political boundaries. Such international agreements are based on the general presumption that economic and social welfare is maximised by free access to information and culture. Moreover, if markets are unable to value cultural goods satisfactorily (because they cannot recognise the value of cultural goods to future generations of users) then cultural markets are not alone in failing in this way. Scientific research, military defence, education and a host of other goods and services are similarly likely to be undervalued by the market in an open economy. And whereas nationalism, the ideology that ‘the boundaries of state and those of nation [must] coincide’ (Minogue, 1967 p. 12) if societies were to be robust and legitimate was for long the ‘foremost ideology of the modern world’ (Minogue, 1967 p. 8) latterly post-modern social theories have been advanced which suggest that ‘It no longer matters, for the effectiveness of state power, and for the reproduction of political domination in general, whether the social area under domination is culturally unified and uniform’ (Bauman, 1992 p. 97). Yet to cast the argument in these terms is to beg a number of questions. What is cultural development (and what is culture)? If the premises of the pervasive belief that cultural markets are necessarily failed markets (and that therefore the maximisation of welfare requires political intervention) are granted, then an open economy will amplify 118

Cultural Development in an Open Economy – Trading in Culture the economic dynamics which have caused market failure. Thus any discussion of cultural development in an open economy must consider the relationships between the cultural and economic domains and the political institutions, notably the state (political authority) which mediates between them and which is often given the role of compensating for the failure of cultural markets.

Culture What is culture? The British scholar Raymond Williams referred to ‘culture’ as ‘one of the two or three most complicated words in the English language’ (Williams, 1976 p. 76). Williams distinguishes three principal meanings: that drawn from husbandry and horticulture signifying rearing or fostered growth; an anthropological notion signifying the ensemble of practices and assumptions that distinguish one society from others; and that referring to the articulation of systems of symbols such that aesthetic responses are elicited in consumption. Culture in its ‘anthropological’ sense is a bundle of attributes that differentiate human social groups from each other. Hardin (1974 p. 12) has identified three central distinguishing characteristics for Canada: English against French, Canada against the United States, and the regions against the centre. Lipset’s study (Lipset, 1990) supports Hardin in its eloquent documentation of differences in values between English and French speaking Canadians and Americans on a vast range of issues from parenting to crime. National cultures may or may not closely correspond to political demarcations. There are undoubtedly politically sovereign states which are possessed of strongly marked national cultures. In Western Europe national cultures have been produced by a long history in which political authorities have successfully (if such a brutal process can be graced with the honorific term ‘success’) constructed monoglot communities with a single dominant religion, and a shared ethnicity within stable and geographically distinct boundaries. These nation states have, it is often claimed, distinct national cultures. But even here a host of exceptions and qualifications spring to mind – not least a long established international high culture for which ‘timeless’ and ‘universal’ qualities are claimed. Here the second of the two pertinent meanings of ‘culture’ identified by Williams becomes significant, where ‘culture’ is not a descriptive but an evaluative term, distinguishing not separate but equal social markings, but ranking systems of moral values and human capabilities. If culture is the ‘harmonious expansion of all the powers which make the beauty and worth of human nature’ (Arnold, 1963 p. 48) or the ‘best that has been thought and known in the world’ (Arnold, 1963 p. 70) as Arnold variously described it, then all anthropological cultures are not equal. It is widely agreed that high culture is part of the common patrimony of humankind, even though there may be disagreement on what precisely counts as ‘good enough’ to be recognised as part of humankind’s common patrimony. Certain characteristics (in advanced Western societies at least) are customarily present in objects designated as being culturally valuable: age, handmade, single authorship (all of which make for scarcity) and complexity (see, inter alia, Benjamin, 1970, 1973). The symbol system articulated, the language of the work, is one which requires skill and an 119

Media and Identity in Contemporary Europe educated consumer to read or decode. Cultivation is required in order to understand a Poussin but not to understand Dallas. For the conventions used in Dallas are widely generalised in the representations we have been educated to decode since infancy. Poussin is now remote (and therefore difficult), requiring expertise the acquisition of which cannot be the prerogative of all. For not all of us have the leisure and opportunity to familiarise ourselves with Poussin’s work and to learn how to unpack its signifying system. The social division of labour that produced the leisure necessary for producers to acquire the skills for physical command over the factors of artistic production (whether painting in oils, playing a musical instrument or sculpting, that is for coding the symbols articulated in artistic productions), and for consumers to acquire decoding skills, constituted ‘culture’ as a minority prerogative. To be sure there was, and in some societies still is, ‘popular culture’ – e.g. oral literature, song and decoration of everyday objects. These societies did not sharply differentiate producers and consumers of culture nor constitute ‘culture’ as a commodity. But this popular culture was and is customarily designated as inferior to ‘high’ culture which was, necessarily, the property of elites who had the time and wealth necessary to produce, acquire and consume it. Films and television programmes have few of the time-honoured markers of cultural value. They produce no unique products (no videotape or film print has a superior status as ‘the original’ over others), have no single authors to whom creative responsibility can exclusively be assigned (though there are divisions of labour in production that privilege the inputs of one or a few individuals) and their products are characteristically marketed and are readily intelligible to large numbers of people. To understand prime time television requires no special cultivation available only to a few. And the technologies on which the audio visual industries are based have ‘deskilled’ production and removed the ‘aura’ from their producers and from the works themselves. There is a mismatch between the cultural assumptions and definitions of the past (which owe their origin to an era in which the leisure available for cultural production and consumption was available only to a few) and contemporary culture based on ‘mechanical reproduction’ (Benjamin, 1970) and mass consumption. In advanced western societies, leisure is now universal. Electronic and mechanical reproduction have reduced the cost of culture and consumption of symbolic goods, and thus cultural consumption is a major activity of the mass of people. Mass and high culture are different in that few consume high culture and many consume popular culture. They are similar in that both mass and high culture separate producers and consumers and commoditise symbolic culture. Whereas in popular culture those who produce and consume culture are the same. However, although mass culture and popular culture are socially pervasive, mass culture is pervasive within a much larger community or communities than is popular culture. The long established international character of high culture is now a property of mass culture.

The transnationalisation of culture The transnationalisation of culture, for long the property only of elites, is now pervasive throughout advanced societies. This is the ‘cultural crisis’ which presents 120

Cultural Development in an Open Economy – Trading in Culture both threats and opportunities. Formerly national cultures were formed from a repertoire of symbols that were shared by members of the national community and not by others outside it. These national repertoires of symbols were not disseminated outside the national community and therefore distinguished one nation from another. But an international character has long been evident in the culture of national elites. It is not accidental that the most honoured forms of international high culture are music and easel painting which do not require knowledge of a particular natural language in their consumers. Much binds advanced societies in a common transnational culture: their family structures, agnosticism, industrial technologies, disciplines of labour, structure of the working day, and a shared repertoire of symbols of mass culture. Moreover many advanced societies contain populations whose cultural identity is formed in several matrices – for example that of the country of residence (and often the country of citizenship) of their members and also that of the country of their origin. The crisis for national cultures extends through the anthropological and symbolic. There is a pervasive and growing absence of fit between the cultures and the political institutions of modern states. The relationships between the two types of culture are complicated and difficult to demonstrate. There are generally admitted problems of demonstrating the effects of the media on receivers’ attitudes and behaviour (see Cumberbatch and Howitt, 1989 for a useful overview). If there are difficulties in demonstrating the effect on viewers of viewing a representation of violent (or indecent) behaviour then how much more difficult is it to demonstrate the effect (or absence of effect) of consumption of exogenous or endogenous, high or popular culture on the individual and collective identities of cultural consumers? On one hand, culture is evidently synthetic, adaptive, protean and crosses communities. On the other it is a major bearer and indicator of collective identity. Thus as culture changes so does (or does it?) collective identity. The unities embraced by collective identities and which define communities have grown over historical time as markets have extended through space, as literacy has regularised and reduced linguistic and cultural variation. These unities, collective identities and markets are in constant flux. Yet this flux is not unprecedented. Cultural exchange and trade in cultural goods has prevailed since Gutenberg’s era and before (see inter alia, Steinberg, 1969). Nor are contemporary policy makers’ and commentators’ preoccupations about collective identity, cultural development and cultural trade novel. What however is new is the pace of change and the consequences of an accelerating ‘dematerialisation’ of cultural commodities. The ‘Gutenberg Galaxy’ was one in which most cultural commodities had a physical existence.2 However, the characteristic materiality of cultural commodities in the Gutenberg galaxy has changed to the characteristic immateriality of cultural commodities in the ‘Marconi Galaxy.’ The Marconi Galaxy is distinguished by an absence of the previous customary isomorphism between common culture and collective identity, and between political identities and institutions. This disjuncture is in one sense a version of the antinomy between the different forms of social solidarity discussed under the headings of 121

Media and Identity in Contemporary Europe gemeinschaft and gesellshaft, and organic and mechanical solidarity by the founding fathers of the social sciences (notably by Tönnies, 1957 and Durkheim, 1984). If there is no collective identity or common culture which binds together individuals then social cohesion becomes a matter of rational, voluntaristic assent to a society based on an inclusive but atomistic universalism. Whereas social cohesion in a society where members of a political community are also bound together by membership of a shared culture and collective identity is more powerfully communitarian. But it is also one which must necessarily be both rigorously exclusive (those who do not share the cultural character of the community cannot be admitted to the full rights of members) and diligent about policing the boundaries which differentiate one society from another. Thus the post-Gutenberg, post-Marconi accelerations in the rate of cultural exchange and adulteration are profoundly troubling to societies based (as all must be, to some extent) on common cultures and collective identities and the reverse to societies based (as all must be, to some extent) on universalistic and rational principles (see, inter alia, Alter, 1989, Gellner, 1983, Hall and Jarvie, 1992).

Culture and politics The isomorphism of state and culture and the notion of a universalistic high cultural canon are both challenged by: 1 Fourth world communities living in first world states. 2 Accelerating migration of populations and establishment of multi-cultural and multi-lingual societies. 3 Globalisation of culture and internationalisation of cultural industries. 4 Self-conscious creation of multi-lingual political entities. The European Union is the best contemporary example but other examples (whether successful or unsuccessful), such as India, the former Yugoslavia and the former Soviet Union show that the European Union is not unique. Cultural and collective identities are, of course, not singular. No gemeinschaft is formed around only one collective identity, nor do the members of any gemeinschaft have only one vector of collective identity. However, the rise in the relative importance attributed to collective cultural identity as a gemeinschaft binding collective identity, or social glue, can be dated from the beginning of the modern period. Formerly, in pre-modern times (let us say before the two major revolutions of the enlightenment – the American Revolution in 1776 and the French Revolution of 1789), the principal locus of gemeinschaft binding collective identity was religion. States were organised on confessional lines. Many contemporary states, of course, still assert the importance of the congruence between religious confession and political structures. The unsatisfied demands for states based on Islamic law suggest that such confessional/political demands are powerful and lively, and existing theocratic societies such as Israel, Iran and Pakistan testify to the consequences of such demands for isomorphism between religion and polity and to the characteristics of contemporary theocracies. 122

Cultural Development in an Open Economy – Trading in Culture Yet the USA established that a state could exist and thrive on the basis of religious toleration and the separation of church and state. However, if religion is absent as a social glue, how is the enduring human hunger for gemeinschaft to be satisfied? Cultural gemeinschaft is the obvious answer. It is notable how strongly normative cultural (and linguistic) policy has been in the secular post-Jacobin state of France. Peasants had, (Weber, 1976), to become Frenchmen if the state was to endure. Further, it became widely believed that the state had the role of raising the cultural level of the population, a role not dissimilar to its role in promoting national education and health policies. However, an official fostering of high culture engenders both cultural adulteration (as exogenous and endogenous cultures mix) and cultural (and therefore social) stratification as groups within the gemeinschaft are distinguished from each other on the basis of their cultural consumption and practices. The only way these contradictions can be resolved is to intensify attempts to reconcile high and mass cultures. Mass culture, and particularly a mass culture which has a synthetic and international character, therefore becomes a problem. It is feared as an enemy of social cohesion or of cultural standards or of both. Thus the two cultural roles of the state, engendering cultural and thus social cohesion and raising cultural standards, may be threatened by an open economy. Or, alternatively, those plebian internationalists whose values are attached more to the values of gesellschaft and to libertarian modernism may see no problem arising from citizens’ free access to information and the impossibility of effective state censorship. Formerly the main issue that international circulation of culture posed was freedom of information, but now there are very important issues of economic interest and the desire of communities to affirm their distinctiveness and difference from other collectivities at stake. Resolution of these and related issues, such as the reconciliation of community and individual rights including the ‘right’ to a distinctive language and culture, are intractable problems. For these are not ‘soluble’ problems; there are genuine contradictions and mutual incompatibilities in the different positions espoused. Religious freedom can be seen as an unproblematic civil liberty, but the rights of one or other collectivity must be abridged if a confessional group espouses beliefs which conflict with the beliefs of another. The rights to diversity and to universality conflict and public policy concerned with ‘Cultural Development in an Open Economy’ cannot evade the choice between these values in many concrete instances. But however incompatible the principles of universality and diversity are in strict logic, different societies reconcile these contradictory imperatives in very different ways. There are striking differences in the way these contradictory principles are mediated and reconciled in ‘old’ and ‘new’ societies. Many, but not all, of the ‘New Societies’ (or settler societies as they are also sometimes called) of the European diaspora (notably North and South America, Australia and New Zealand, but also Pacific, African and Asian societies), including Canada, demonstrate a more successful acceptance of cultural and linguistic difference than do the ‘old’ societies of the core European nation states. Success is a relative term 123

Media and Identity in Contemporary Europe and a difficult one. For it is not easy to weigh in the balance the ‘success’ of different societies. But however troubling are the recent travails of ‘new societies’ which have experienced riots occasioned by the acquittal of police in Los Angeles, accused of beating a black driver Rodney King in 1991, window breaking on Yonge Street, or the Oka confrontation in 1990, they must be set against the experience of ‘old societies’ (notably European societies) which have spawned the two major twentieth century forms of totalitarianism and two world wars. Are the evident problem of social cohesion (in Canada and elsewhere) attributable to too much or too little cultural diversity? Is there too much or too little gemeinschaft in contemporary societies? These matters may seem abstract and irrelevant but if we are to assess the role of cultural development in an open economy we must consider them – even if only to reject them. Culture and its preservation and development is increasingly being defined as a policy goal. We therefore need to know what is meant by ‘culture,’ the relationship of the factor of culture to other social factors, and the overall goals of society before we can judge the appropriateness of cultural policies.

Culture and technology What then are the factors which make for long term success of cultural and information industries and which should be taken into account in formulating policies for cultural development in an open economy? First it is important to recognise that the rate of cultural and information exchange and integration between societies has accelerated rapidly under the influence of technological innovation. New communication technologies and the restructuring of information markets which they make possible present both threats and promises. The policy decisions of governments will determine the extent to which threats or promises are most realised. Contemporary discussion of communication policy is suffused with metaphors of integration, such as the globalisation of communications, the convergence of different media and the erosion of the tyranny of distance. These metaphors have been spawned by an accelerating development of electronic technologies which have reduced the tyranny of both spatial and temporal distance during the twentieth century. They signify a perception that information and communication markets (and the social relations that follow from them) are rapidly being changed. Harold Innis (1951) described different communications media as having time and space binding properties. The space binding properties of writing, Innis believed, enabled the creation and maintenance of empires over great geographical spaces. Its time binding properties enabled current and future generations to receive communications from the past. These tendencies were amplified by printing and were extended by photography and cinematography (which permitted the capture and preservation of images) and by sound on film and sound on disc recording. The perishability of cultural and information commodities was dramatically reduced. Such technologies permitted the temporal extension of communications and provided powerful incentives for information production by enabling producers to amortise costs and accrue profits over time. Developments after the second world war, which made possible the electronic encoding of information (whether of sound, image or 124

Cultural Development in an Open Economy – Trading in Culture alphanumeric characters) and the storage of information in electronically encoded form (audio and video tape and on disk), significantly amplified the binding effects of new communication technologies. But however important the metaphors and processes of integration and binding have been, they have been attended by contrary processes of differentiation and specialisation. The world’s markets for cultural products have not become completely integrated; they remain differentiated temporally and spatially. Although new communication technologies have reduced the costs of transmitting and distributing information over distance (space binding) distinct information markets remain; here the most important differentiating factors are those of language and culture. These contradictory forces of integration and differentiation have always structured information markets. However, it has become both more important to understand these contradictory forces, because information has grown in importance as a traded commodity, and more difficult, because new technologies are rapidly changing the relative power of the forces of integration and differentiation. The simultaneous, but changing, processes of integration and differentiation present both threats and opportunities for communication policy makers, businesses and citizens.

The internationalisation of the information economy As the world economy has become more integrated and inter-dependent so the international division of labour has increased. Production of commodities is more and more location specific. Such specialisation is very evident in the tradeable information sector which has become a paradigm of globalisation. (See, for example, ‘Economic and Industrial Patterns’ in UNESCO, 1989 pp. 79–108). In 1986, total world turnover in the information and communication industries was estimated to be $US 1,185 billion (the information and communication sector itself was estimated to account for perhaps 8% or 9% of total world output) of which the information content sector (press, publishing, recording, radio, television and cinema) accounted for $US 315 billion annually. The European Economic Community (now the European Union), Japan and the United States of America accounted for approximately 87% of world turnover in information goods and services (their share of the global information content sector is comparable to their share of the total global market in information goods and services). This compares with their share of global GDP of 70% (derived from UNESCO, 1989 p. 83). These three entities are therefore even more globally dominant in the information sector than they are in other economic sectors. Their development seems to epitomise the transition to a post industrial, knowledge based, information society proposed by Daniel Bell (Bell, 1976). English speaking states and enterprises are particularly strongly represented in the global information content sector, although governments across the world have fostered the information sector in their own economies in order to accelerate a desired transition to a post-industrial (or ‘information society’) status. Of the world’s fifty largest enterprises ranked by total media turnover (press and publishing, television, radio and cinema) thirty-four are anglophone. These anglophone enterprises account for about 66% of the media turnover of the top fifty enterprises. Twenty-five of the 125

Media and Identity in Contemporary Europe anglophone members of the world’s top fifty media enterprises are domiciled in the United States, six are United Kingdom domiciled enterprises, three are Canadian (International Thomson, Southam, CBC/Radio Canada) and one (News Corporation, which ranks fourth in size of all world media enterprises) is domiciled in Australia. MacLean Hunter and Torstar are the next highest rated Canadian enterprises at 67th and 76th positions respectively (See UNESCO, 1989 pp. 104–8). Internationally traded information pre-eminently originates from the anglophone world and from the United States and United Kingdom in particular. In the internationally traded sector of the world television programme market the OECD, (1986) estimated that of a total 1980 world traded volume of US $400 million, the United States’ television programme exports accounted for US $350 million, and the UK (second to the United States) accounted for US $22 million (see Miles 1990 and Moore and Steele 1991 for accounts of the UK’s information economy; also Cultural Trends passim). The USA is even more emphatically the leading exporter of cinema films followed by France (OECD, 1986). The President of the Motion Picture Association of America, Jack Valenti, reported to the United States Congress that the United States had a positive trade balance of US $1 billion for the audio visual sector in 1987 (Valenti, 1988). The surplus on overseas trade for the United States’ entertainment industry as a whole has been estimated at $4.9 billion in 1986 (Brummer cited in Hoskins and Mirus, 1988). Why have the United States and United Kingdom been able to dominate the internationally traded sections of global information content markets? Several explanations have been advanced, each of which has force, but none of which seem wholly satisfactory. I consider here three explanations, two advanced by scholars from the United States and one by Canadian scholars. Schiller (1969, 1981) and others of the ‘media imperialism’ school argue that the domination of world-information flows by the media imperialists, and notably by the United States, is both consequence and cause of the overall dominance of such states in world affairs. Yet, as a Canadian commentator, Ravault (1980), points out, this is not a satisfactory explanation. For the post war period, which has seen a significant augmentation of the share of the international information market of the UK and USA, has been a period when the military, political and economic power of these states has declined. Others, such as Guback (1969), point to the early capture of a commanding position in international information markets by the USA (a similar argument could be made – in respect of products such as printed books and news agency services – for the UK) giving the USA a decisive advantage. The decisive shift, it is customarily argued, took place during the First World War when the film industries of the European belligerents (which had hitherto accounted for the majority of world film trade) closed their markets to each other and reduced overall film production. The United States was able to maintain (and increase) production and trade in the markets of all belligerents (except for the relatively short period from 1917–1918 when it was itself a belligerent). The United States consolidated its position in the inter-war period through technological innovation (eg sound, sensitive film stocks, etc) and, during and after 126

Cultural Development in an Open Economy – Trading in Culture World War Two, by filling the vacuum in European film production which was one of the consequences of the war. An alternative explanation emphasises the importance of home market size; Hoskins and Mirus (1988) have given a particularly persuasive account of the importance of this factor. Although their emphasis on the importance of home market size explains many phenomena in the global information content industry it does not account for all. It does not account for the relative positions of individual information economies which can be derived from UNESCO’s data (UNESCO, 1989): notably the UK’s fourth place (very close to that of West Germany); Australia’s superior position to that of Italy; or Canada’s superior position to France’s. Nor does it explain the UK’s superior export performance in international information content markets to that of Japan and West Germany.3 Home market size is undoubtedly among the factors which contribute to the success or failure of information content producers in international markets, but the relevant unit of analysis seems not to be the size of a single national market (or strictly the size of the market of a state) as has usually been argued hitherto, but rather the size (and wealth) of the whole language community within which a media enterprise, or enterprises, is located. The distinctive economic characteristics of information make market size a particularly important factor in contributing to the success or failure of enterprises trading in information.

Language and comparative economic advantage Clearly a particular language community will, all other things being equal, tend to prefer information content encoded in its own language. But all other things are seldom equal. And as we will see, although preference for own language explains some features of international information trades, it does not explain all. For example, Austria’s importation of more television programming from West Germany than from other European sources in 1987 is probably satisfactorily explained by a combination of the factors of preference for programming in its own language and the tendency for television programming importers to acquire programming from suppliers enjoying a large domestic market where high production costs can be amortised, and where, consequently, high quality productions may be made. A similar pattern is evident in Swiss television’s programme imports in 1987. The Swiss German language channel imported a higher proportion of programmes from West Germany than it did from any other single source (except the United States). The Swiss French language channel imported more programming from France than from any other single source (except the United States). Reverse flows from Austria to Germany, Switzerland to France, from small to large markets, did not complement and balance the flows from large to small. Thus the factor of shared language is insufficient alone to explain these television programme flows. Rather, a combination of the factors of market size and language seem to be at work. (Data from UNESCO, 1989 pp. 151–2). The evident importance of both market size and language in accounting for information flows suggest that a multivariate analysis which recognises the importance of the character of linguistic markets as well as national markets may be superior to a 127

Media and Identity in Contemporary Europe single factor analysis (see Collins, 1989 for discussion of language and European satellite television). Of course, within a single world language community composed of several distinct national, or state, markets the factor of national market size remains significant. Within the anglophone world the United States is advantaged relative to the UK, the UK relative to Ireland, and among German language communities West Germany is advantaged relative to Switzerland. But some language communities are more permeable to exogenous information products than are others. Varis’ work (see Varis, 1985) on international flows of television programming is deservedly well-known; it reveals strikingly less penetration of non-English language programming into English speaking markets than of English language origin programming into non-English speaking markets. The membrane separating anglophone information markets from others is semi-permeable. Anglophone producers and exporters of information content seem to enjoy a comparative advantage compared to producers and exporters of other language communities. The source of their advantage is their membership of the world’s largest and wealthiest language community. The strength of American films and television programs in world markets can therefore be explained by the fact that the English speaking market for video products has much greater spending power than do markets comprising other linguistic populations (Wildman and Siwek 1988, p. 8). Tabulation of the comparative size and wealth of the world’s principle language communities graphically demonstrates the potential advantages of anglophone producers (see table 1). Note: This table includes only market economies and thus excludes both the Russian and Chinese language communities. Language

Native Speakers (Millions)

1981 GNP* (Millions $US)

English Hindi/Urdu Spanish Arabic Bengali Portuguese Malay/Indonesian Japanese French German Punjabi Italian

409 352 265 163 160 157 122 121 110 101 69 62

4,230,375 209,023 653,958 328,547 12,692 303,465 237,715 1,185,861 812,179 1,017,528 29,575 502,306

The World Almanac and Book of Facts (New York: Newspaper Enterprise Association, Inc., 1984); World Bank, World Tables, 3rd ed., vol 1 (Baltimore, Md.: Johns Hopkins University Press, 1983) Adapted from citation in Wildman and Siwek 1988 p. 85.

Table 1. A Comparison of Linguistic Markets 128

Cultural Development in an Open Economy – Trading in Culture Anglophone information producers have the potential to benefit from the comparative advantage of participation in the world’s wealthiest language market in two ways. First they are potentially able to amortise high ‘first copy’ costs in both the world’s largest national and the world’s largest language market. Anglophone producers are therefore able to produce high quality works (for example high production budgets make possible extensive rehearsals and retakes in film and television programme production) and works which exhibit high ‘production values.’ Moreover, anglophone producers benefit from the status of English as the world’s preferred second language. Not only does this mean that works in English are intelligible to more non-native speakers of English than are works in, say, German, Urdu or Bengali to non-native speakers of those languages, but also that English language works are likely to be easier and cheaper to dub, subtitle or translate into other languages than are works not made in English. It is easier to sell an English language work into the German and Spanish language markets than it is to sell a Spanish work into the German and English markets or a German work into the Spanish and English markets.

The performance of information producers in international markets – the role of language. UNESCO (see UNESCO, 1989 pp. 104–8) has divided the world’s information and communication economy into three sections of roughly equivalent size: the media (press and publishing, television, radio and cinema), services (information and telecommunications), and equipment (telecommunications and electronics). In all these categories enterprises from the United States figure prominently (for example the USA has the first ranked enterprise in the media and equipment areas and the second ranked in services). However, it is only in the equipment area that a significant number of non-anglophone enterprises are ranked highly. Seven of the top ten equipment enterprises are non-anglophone (five Japanese, one Dutch, one German) four of the service providers are non-anglophone (one each of Japanese, German, French, Italian) whereas only two of the top ten media enterprises are non-anglophone (German and Japanese). Not only are anglophone enterprises better represented in the media area than in the equipment and services areas, but anglophone enterprises from anglophone states other than the USA are represented. In the first two of these categories, media and services, Australia has enterprises occupying relatively high positions relative to overseas enterprises (fourth in the media category and twentieth in services, while, in the category of equipment none of the 148 largest enterprises listed are Australian); the UK has six enterprises in the top fifty of the media category (21st, 24th, 35th, 36th, 40th and 44th) and three in the top fifty of the services category (5th, 39th and 40th) and two in the top fifty of the equipment category. Canada, as previously noted, has three in the top fifty of the media category (41st, 49th and 50th) one in the top fifty of the services category and one in the top fifty of the equipment category. If instead of taking enterprises as the unit of analysis, we take a specific information product, printed books, as the unit of analysis we find similar phenomena. UNESCO’s 129

Media and Identity in Contemporary Europe data on the translation of printed books enables us to test the extent to which information products which emanate from one language market are saleable in other markets and the extent to which producers in one language community enjoy advantages relative to producers of comparable products in other language communities. In 1982, 3,557 English language books were translated into Spanish, but only 816 German language books were translated into Spanish. Some 5,795 English language books and 160 Spanish books were translated into German in the same year. And only 108 Spanish books and 873 German books were translated into English in 1982. (UNESCO, 1989 p. 336). This data suggests, as does UNESCO data on information producing enterprises, that there are powerful advantages for anglophone producers. What of French language producers? There are striking disparities between the status of English and French in international cultural markets. In 1982, 1,525 books were translated from French into Spanish (less than half the number of books translated from English into Spanish) and 60 from Spanish into French, 1,294 books were translated from French into German (less than a quarter of the number of books translated from English into German) and 628 books were translated from French into English (less than half the number of books that were translated from English into French). France has two enterprises in the top fifty of the media category (26th and 37th), one in the top fifty of the services category (fourth), and three in the top fifty of the equipment category (11th, 18th and 44th). However, although French was considerably less important a language of origin and destination than was English for the translation of books in 1982, French was the second most important language as a language of origin for translation after English. In 1982 5,033 books were translated from French into other languages, 18,311 books from English into other languages, 3,596 books from German into other languages, 2,961 books from Russian into other languages, and 533 books from Spanish into other languages (all figures derived from UNESCO, 1989 pp. 336–7). France is the third largest world market for printed books (publishers’ net sales).4 Although considerably less well-endowed with linguistic advantage than are English language producers, as the ninth largest (and fourth wealthiest) language community French language producers seem to be less disadvantaged than are producers in any languages other than English. But French language producers may be vulnerable to displacement from their position as second most important language group of international information providers5 by German and/or Japanese and possibly by Spanish language information producers. Japanese information producers enjoy a larger and wealthier language market than do francophone producers (although Japanese is almost certainly a ‘harder’ language than French and thus less likely to be learned as a second language), German producers have a smaller, but wealthier, language market than do francophone producers and Spanish language producers have a considerably larger, but poorer, market than do francophone producers. Moreover the relative advantages of English language production seem to be so compelling that even co-ventures between French native speaking partners (for 130

Cultural Development in an Open Economy – Trading in Culture example Franco-Canadian film and television co-productions) are increasingly producing English language works for exploitation in international markets. English language information producers (and, to a significantly lesser degree, French language information producers) therefore seem to experience less reduction in the value of their products due to ‘cultural discount’ (to employ a useful neologism from Hoskins and Mirus, 1988,) than do information producers working in other languages. They are able to sell high cost productions at marginal cost (after ‘first copy’ costs have been recouped in their home language home markets) in foreign language markets which, all other thing being equal, will be preferred to the lower cost productions originating in other language communities (and may often be preferred to those of domestic producers). Note that these advantages are only potential advantages; they may be insufficient in practice to surmount the ‘cultural screens’ which separate distinct linguistic and cultural communities. The factor of comparative advantage offered by the English language enables us to account for the disparity in information flows between anglophone and other states, and the success of anglophone information exporters in international markets. A record of success which is at odds with the persistent deficits experienced by major anglophone states on their overall international trade balances. But comparative advantage has not always been sufficient to enable anglophone producers to penetrate the cultural and linguistic screens which surround information markets.

Conclusions Drawing conclusions about the place of English (and French) language works in international tradeable information markets should be done with caution. Too often one runs the risks of drawing false conclusions because one has compared apples with pears. There are significant gaps and incommensurabilities in the data I have used which point to the need for further research. However, the marked dominance of anglophone producers in world information markets suggests that these producers do enjoy an advantage over producers in other language communities and that, since the positive balance on the tradeable information account of the major anglophone states is not representative of their overall overseas trading performance, these states do enjoy some significant advantage which can, provisionally, be attributed to the factor of language. The strong performance of the UK and, probably, Australia suggests that although home market size is likely to be a factor which significantly influences the likelihood of success of information producers in overseas markets, the home linguistic market within which producers operate is also significant. The size and wealth of the English language community means, first, that higher production (‘first copy’) costs can be incurred in the global English language market than in other language markets, and that, consequently, information goods produced in the English speaking market are likely to be more attractive to third market customers than are products which emanate from other language communities. Although European television viewers customarily prefer own country programming, their usual second choice is programming from the anglophone world. And, second, because of the status of English as the world’s 131

Media and Identity in Contemporary Europe preferred second language, anglophones have opportunities to create international media products which are denied to members of other language communities. The advantages of English are, of course, disadvantages for other languages including French. France itself has a substantial deficit in trade with the USA on audiovisual products (estimated at $2bn by Sturgess, 1992). Moreover the potential advantages of English language (and, in relation to other non-English language producers, of French language producers) cannot be actualised unless the products which the tradeable information sector produces and markets are well-adapted to the needs, tastes and interests (the ‘culture’) of the overseas market(s) on which they are targeted. The successes of the information sectors of small anglophone countries (notably Australia) seem to have derived from successful niche marketing rather than direct challenge to the United States on the terrain of high budget film and television drama in which it excels.6 Prima facie, there seem to be niches (at least in audio-visual markets) which Canada could exploit successfully. Representatives of the BBC’s sales organisation, BBC Enterprises, testify to an undersupply of ‘strong documentaries’ and ‘live action children’s programming’ on international television markets. Both these programme forms are ones in which Canada has a notable record. Moreover the success of Japan (Ito, 1990) in overcoming its linguistic disadvantages in a successful exploitation of animation film suggest that Canada’s expertise in animation may serve it well. Further, given the continuing escalation in costs of audio-visual drama production and an increasing, consequential, recourse to international joint ventures to spread costs and risk, Canada’s multi-cultural and multi-linguistic society offers it an unique ‘laboratory’ in which the skills of joint venturing can be fostered, learned and disseminated. The linguistic and cultural characteristics of software and information content are central factors which have determined, and will continue to determine, the economic success or failure of new communications technologies. For policy makers the economic success (or otherwise) of new communication technologies is but one factor to be taken into consideration. Others include the integrity of national culture and diversity of media content and ownership. There are obvious trade-offs entailed between concentrating resources and specialising in particular niches of the global tradeable information market, which a policy seeking to maximise financial returns in global information trading may well entail, and the achievement of national content over a full range of information products. The Canadian case is indeed interesting yet under-researched. Canada is a subordinate and peripheral actor in the world’s richest and most important information markets. Its varied social composition gives it links to other language communities and markets and constitutes it as a microcosm of the world community. These characteristics have customarily been seen as disadvantageous to Canada, making it vulnerable to import penetration, particularly in its information sector, and to loss of social cohesion. However, there are important counter-indications which suggest that this conventional wisdom requires reassessment. The benefits which accrue from Canada’s linguistic and cultural links to other world communities are 132

Cultural Development in an Open Economy – Trading in Culture evident. A recent, if paradoxical, example comes in France’s recent designation of Franco-Canadian film and television co-productions made in English as European works, thus qualifying such works as European for French and European Community quota requirements (see Media Policy Review N, 5 September 1992 p. 1). Canada’s two official languages are the languages which appear to offer most advantages to information producers who wish to exploit their products on international markets. Canada is the domicile of successful international media content enterprises (albeit anglophone), and Canadian society has a very varied social, ethnic and linguistic composition. It may be that ‘new societies’ such as Canada possess social structures and habits better fitted to the brokering roles increasingly required in an increasingly interdependent and internationalised world economy than do old style nation states. This general observation has a specific relevance to the Canadian tradeable information sector; co-productions are becoming more and more important forms through which resources are concentrated and markets secured for high cost media productions. For co-productions to be successful, not only do workers of different backgrounds, work practices and values have to successfully collaborate, but the product has to be acceptable to consumers who may be widely separated linguistically and culturally. Prima facie, an anglophone ‘new society’ seems well-suited to make a success of coproduction. However, the advantages of English can easily be seen as disadvantages for French. Although French language productions seems to be more likely to succeed in international and transnational information markets than productions in any language other than English, there can be no doubt that English language productions are, all other things being equal, more likely to succeed than French language productions. The different status of Canada’s two official languages vis à vis international information markets suggest that different strategies are required to optimise benefits to Canada’s two language communities and their distinct cultural industries. Speculations such as those above can, thus far, be no more than that. The research to test such propositions (and the host of other research questions concerned with the organisation and structure of Canada’s tradeable information sector and of the firms in it) has yet to be conducted. Researchers have a vital role in identifying the long term structural characteristics which are shaping Canada’s and the world’s information markets and in clarifying the issues and consequences which relate to shorter term policy decisions. The continuing convergence and interdependence of media of content and carriage suggests that software characteristics, notably language and culture, will become more and more important foci for communications policy. Those such as lawyers, economists and experts in technology assessment who have long held sway in policy analysis will increasingly find themselves rubbing shoulders with scholars from the fields of media, cultural and communication studies.

Acknowledgements This chapter was first published as ‘Trading In Culture: The Role Of Language’ in Canadian Journal of Communication. 1994 V 19 pp. 377–99. (Reprinted in Cultural 133

Media and Identity in Contemporary Europe Development in an Open Economy. ed. S. McFadyen, C. Hoskins, A. Finn and R. Lorimer. Burnaby BC. Canadian Journal of Communication Corporation). Earlier versions of parts of it were published in ‘Language Culture and Information Markets’ CIRCIT Policy Research Paper No. 5. 1990. CIRCIT. Melbourne. I am grateful to members of the research team on Cultural Development in an Open Economy, brought together by the Social Science and Humanities Research Council (SSHRC) of Canada’s funding of the state of the art review conducted by the team, for their comments on an earlier draft and to Philip Schlesinger for his guidance.

References 1

The terms ‘culture’ and ‘information’ are difficult to define and to differentiate from each other. I have used the term ‘information’ chiefly to signify an economic resource of knowledge which can be, and is, commoditised, traded, bought and sold. Culture is both one form of information (and is commoditised and traded) but also constitutes a characteristic of information commodities (and of information consumers and producers), which forms an important boundary of information markets.

2 3

4

5 6

Not all did;before Edison there were no means of recording sounds. Note that these conclusions are based on available data which is incomplete and imperfectly commensurable. For example my conclusions could be falsified were France found to have more smaller media enterprises than has Canada. This hypothetically greater number of smaller enterprises might have a greater overall output than the fewer but larger Canadian enterprises. However, data to compare export performance with domestic market size for all major information content sectors by country is lacking. Conclusions are therefore provisional and indicative. In 1990 the United States was largest with an annual publishers’ net sales total of $7.9bn, Germany second with $5.1bn, France third with $2.83bn, Italy fourth with $2.81bn, the UK fifth with $2.35bn and Spain sixth with $2.15bn (Euromonitor survey 1992 cited in the Financial Times Review of Business Books 29.9.1992 p. 12). If we take the book translation index, supplemented by our knowledge that the French film industry is second only to that of the USA in its export performance (see OECD, 1986), as a reliable measure. More research is required to validate, or falsify, this proposition. We lack anything other than impressionistic and anecdotal information on the character of the products successfully sold overseas by the UK and Australia – still less do we have information on the apparent successes of the South East Asian anglophone information producers of Hong Kong and Singapore.

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10 Paradigm Regained? Where to in Media and Communications Regulation? Introduction It is a truism of contemporary communications policy research to observe that government control over media and communications has weakened – largely as a consequence of technological change. A dominant narrative tells a story of a progressive weakening of government control. Printing itself, the first mass medium of communication, has been widely seen as a subversive technology which, in a mutually interdependent relationship with the growth of mass literacy, emancipated larger and larger numbers of people from the tutelage of religious and secular authorities. Although authorities sought to countervail subversion of established knowledge-based authority and control structures by licensing printers, the interdependent growth of printing and popular literacy inexorably eroded knowledge-based religious and secular authority (for a succinct version of this narrative see Peacock, 1986 2.3). Latterly, the locus of control has shifted from print to electronic communication. Governments have exercised control through their ability to allocate a scarce resource, the radio frequency spectrum, and/or by licensing favoured contractors for services specific to national territories. Yet here too technological change may be seen as emancipating people from the shackles of government. New communication technologies have both reduced spectrum scarcity – via digitalisation, communication satellites and the ‘Negroponte Switch’ (Negroponte, 1995) of bandwidth hungry applications from wireless to wired communication – and reduced national sovereignty – via satellites, digitalisation and the massive increases in capacity and traffic on the global ‘any to any’ wired telecommunication system. These contemporary technological trends and changes in international relations have run together in a mutually reinforcing relationship. Trends towards an international sharing of sovereignty (e.g. in the European Union) and reduction of global trade barriers have led to further integration of markets, to a consequential internationalisation of the rules and control systems which govern markets and thus to a reduction of whatever abilities to exercise communications sovereignty states once possessed. Clearly, there is no consensus about the extent to which these changes have been beneficial or whether the ‘whig’ history of print, which proposes an intimate interdependence between emancipation and technological change in written communications, reads across to the electronic media of broadcasting and telecommunications. Yet, whether evaluated positively or negatively, governments’ long established ability to control entry to electronic communications markets has declined. I consider the consequences of these changes for media and communications policy and regulation and draw on examples from the context most familiar to me – the contemporary UK embedded within the European Union. 135

Media and Identity in Contemporary Europe The UK case The UK has, by and large, chosen to ‘go with the flow’ of technological change and, rather than resist loss of entry control, over the last fifteen years or so, the UK has sought consistently to encourage market entry. In some domains, notably telecommunications, this has been quite explicit – eg in entry assistance for new players such as the cable companies. In others, such as the press, the Government supported action against forces perceived as barriers to market entry. Notoriously, Government supported newspaper proprietors, notably Eddie Shah and Rupert Murdoch, in their 1980s battles against the ‘inkies’ – as the printers and their unions were colloquially known. And in broadcasting, new terrestrial channels have been licensed; new distribution technologies, notably cable and satellite, have been encouraged; and vertically integrated firms broken apart to facilitate entry by new market actors (notably by independent producers in programme supply and also in transmission). The pace and extent of change are very striking. In 1980 the UK had two telecommunication operators (Hull Telephones and Post Office Telecommunications/British Telecom) both publicly owned. Now there are more than 1000 licensed telecommunication service providers (though BT remains dominant by almost any measure). In 1982 there were four television channels – including Channel 4 which started that year – and the ITV network was made up of 15 commercial television companies licensed by the IBA. Now the ITC, the IBA’s successor, licenses more than 350 television companies. The UK has more than 200 commercial radio stations, including three national commercial services. Whereas in the early eighties there were no national commercial radio services and fewer than fifty local radio stations. And so on. In 1981 The Times emerged from a year long printers strike which seemed emphatically to confirm the power of the ‘inkies.’ But by 1986 single keystroking had been introduced, first by Eddie Shah’s company publishing the Stockport Messenger and followed famously by News International in its move from Fleet Street to Wapping. Now it is ubiquitous. The Wapping revolution meant, as the Daily Mirror memorably put it, that the ‘gravy train had hit the buffers.’ The ‘inkies’ were decimated and a succession of new newspaper titles were launched. Today,’launched in 1986 lasted a decade, The Independent and the Sunday/Daily Sport are still with us. Others, like News on Sunday, The Sunday Correspondent, Eddie Shah’s The Post enjoyed a mayfly life. But whether or not the Wapping Revolution did, as its proponents claim, lower entry barriers to newspaper publishing in the UK it has certainly been followed by a newspaper regime very different to that foreseen by the Labour Party in its last systematic media policy document ‘The People and the Media’ which foresaw only two or three national newspapers by the 1980s (Labour Party, 1974 p. 17). These comprehensive changes on the ground went with a new hegemonic intellectual agenda which, both in the UK and the European Community, provided a comprehensive and robust doctrine for advocates of the new pluralised media order and advocated liberalisation in the heartland where government had hitherto most conspicuously and effectively exercised entry control – in television broadcasting. The 136

Paradigm Regained? Where to in Media and Communications Regulation? Peacock Report of 1986 (Peacock, 1986) was the UK landmark and its doctrine of liberalisation chimed convincingly with the European Union’s advocacy in Television without Frontiers (Commission of the European Communities, 1984) of opening and integration of broadcasting markets on a European scale. The transformation of UK communications in consequence of technological change and government liberalisation policies has been echoed, albeit sometimes faintly, in the European Union. For example, in 1982 there were four commercial television channels in Europe (Hodgson 1992 p. vii) – two of them in the UK – now there are about 250 (Commission of the European Communities, 1997a p. 4). And on January 1st 1998 the European Union’s voice telephony directive comes into effect requiring all Member States (with a partial exemption and delay in implementation for small and less developed Member States) to open national telecommunication markets to competitors domiciled elsewhere in the EU. In most Member States the Directive’s requirements have been foreshadowed by a striking pluralisation of supply in telecommunications markets.

Convergence However, technological change (and the dominance of liberalisation doctrines) has not only meant that government control over entry has weakened and that supply has become pluralised, it also means that there is now a higher degree of substitutability across and between media and between different elements in media and communication supply chains than ever before. ‘Convergence’ – the erosion of barriers between hitherto distinct media of communication and hybridisation between them to produce new media – further complicates matters. Erosion of barriers gives rise to uncertainty about where regulation can apply, about whether regulation should be applied, and engenders an inevitable lag between market innovation and governmental and regulatory response. Above all, convergence means a growth in substitutability between end products – final consumption goods and services – and between particular elements in the supply chain leading to final consumption goods. Substitutability means real uncertainty about which regulatory paradigm should apply as well as presenting practical difficulties about actual exercise of regulatory power. If, as Kevin Werbach of the United States’ FCC has argued, the Internet is ‘substitutable for all existing media’ (Werbach, 1997 p. 1) which regulatory paradigm should apply? That for the press, that for broadcasting or that for telecommunications? Should publication of newspapers on the Internet count when consumption share, and ownership limits, are calculated? Should posting a message on a bulletin board be considered private or public communication? Should video on demand – a form of point to point communication to which, prima facie, telecommunication regulatory precedents apply – be regulated in the same way as near video on demand, to which, prima facie, broadcasting precedents apply? Briefly, we can distinguish three regulatory paradigms in media and communications. First, a ‘first amendment’ paradigm – a paradigm hostile to regulation and usually applied to the press. Second, a paradigm of entry control and tight licensing of a few firms whereby access to a scarce public resource is traded off against firms’ delivery of specified goods and services which they would otherwise be 137

Media and Identity in Contemporary Europe unlikely to provide – the broadcasting, or more accurately, television paradigm. And third, an emerging paradigm where the role of regulation is to keep a self-regulating competitive market in being without seeking to secure particular outcomes – the telecommunications paradigm. Of course, these trends of convergence and internationalisation operate unevenly and their force differs from place to place and from time to time. Accordingly, the relative attractiveness of each paradigm will differ. Outcomes are highly situated and factors which have a major salience in the UK – such as the international sharing of sovereignty in a trans-national political community – are relatively unimportant in Australia. Whereas in Australia, the size of market – in the sense both of Australia’s geographical extensiveness and the comparatively small size of Australia’s capital pool and domestic revenue-generating capacity relative to the UK – is more pressing a policy constraint than in the UK. To take just one instance where these differences are manifested: the hard Australian choice between domestic ownership and diverse ownership is not so acute in the UK – though it certainly applies to the UK. But the challenges presented by the weakening of government’s control over entry, and by convergence, the erosion of boundaries between markets and media are shared by many countries. The Internet is most often cited to exemplify both these trends, but such challenges are clearly evident in other domains, such as the proliferation of possible delivery paths for digital television in the UK. Wired, wireless and hybridised transmission paths all potentially provide access to information located outside national control.

Shared sovereignty and internationalisation However, technological change is far from being the only relevant factor, political considerations have also contributed – notably the sharing of sovereignty, which is particularly striking in western Europe with the growth in size and power of the European Union/Community. Moreover, the European Union’s economic liberalism (to some ultra-liberalism) embodied in the European Treaty (notably Articles 85 to 90 of the Treaty of Rome), emphasising integration of markets, promotion of competition and hostility to state intervention, has meant that European sharing of sovereignty has echoed a general current of liberalisation expressed in the growth of global free trade and the transition from the GATT to the WTO international trade regime. And, of course, this global current flowed particularly strongly through the economic philosophy of UK governments – since the first Thatcher government of 1979 and including the Blair government elected in 1997. Indeed, the UK is often seen as the laboratory in which now pervasive notions of privatisation, liberalisation, competition and regulation with a light touch were first implemented. Thus the exogenous factors of technological change and shared sovereignty and the endogenous factor of liberalisation have combined to reduce governments’ control over entry to communications markets. Entry control, insofar as it still exists, has passed from Government to firms. Self-evidently such a change poses challenging problems to a regulatory regime based on government’s power to control entry – as UK 138

Paradigm Regained? Where to in Media and Communications Regulation? broadcasting regulation has been – and which has weak, and unevenly applicable, instruments to bear on the problem of firms’ market power. So too is the UK case where, broadly, the Office of Fair Trading (the chief UK Competition Authority) is hampered by a weak UK competition law and the shared jurisdiction with the Monopolies and Mergers Commission (another UK competition authority). However, in telecommunications, the generally weak and messy state of UK competition law has been mitigated by determined and inventive action by Oftel using powers derived from the Telecommunications Act of 1984, particularly the goal of promoting effective competition [Part I (2) (b)]. Albeit Oftel’s efforts have been hobbled by the absence of general powers to require trading on ‘fair reasonable and non-discriminatory terms.’ Most of all, effective regulation of firms’ exercise of market power, one key aspect of which may be firms’ ability to exercise entry control, is impeded by the division of responsibility for media and communications regulation between agencies, often jealous of their own power and fearful that they may lose their authority and very existence to another regulatory body, whose jurisdiction is defined by obsolete technological distinctions. The dual challenges posed by an increased number in potential regulatees,1 making the old style model of regulation – tightly defined (and even individually specified) conditions of licence and closely monitored performance – costly and difficult to achieve, and by entry control (a problem in itself but also an instance of a more general issue of the undesirable exercise of market power by firms) passing to firms have led to proposals for a new, competition based, regulatory paradigm. Clearly, any number of superordinate policy goals can be proposed which might find competition wanting either as a means to an end or as an end in itself. Competition, whether as a goal in itself or as a means whereby policy goals may be achieved, is a choice rather than a given. There are empirical reasons to give it serious consideration – notably, the striking improvements in cost/benefit ratios in UK telecommunications which competition has delivered. There are also theoretical reasons – the media and communication landscape has changed, and seems likely to continue changing (under the exogenous force of technological change and endogenous force of changed policy choices resulting in a regime of pluralisation, disaggregation and entry control passing to firms). A new paradigm seems both to be required by changed circumstances and vindicated by experience.

Competition based regulation In 1992, Media Information Australia’s issue on broadcasting policy and regulation cited Leo Gray, an Australian media lawyer formerly with the Australian Broadcasting Tribunal, who cogently put the case for the withering away of sector specific media regulation. Gray argued for a self-regulating media system based on competitive markets and policed, like other markets, by a competition authority: ‘there is very little point’ he wrote ‘in having any detailed structural rules for regulating ownership and control […] The only objective that seems capable of being realistically pursued is the encouragement of real competition’ (Gray, 1992 p. 22). Gray’s analysis is clearly echoed by a variety of regulators including the FCC’s Chairman, Reed Hundt, and the 139

Media and Identity in Contemporary Europe European Union’s Competition Commissioner, Karel van Miert, who described competition policy as ‘the best and most effective tools [sic] we have on hand’ (van Miert 1996 p. 1). Gray’s vision is seductive, and the striking success of competition-based regulation of telecoms in the UK (albeit combined with complementary policies of entry assistance for new players and tight licensing of the overwhelmingly dominant player – British Telecom) 2 provides empirical support for his proposals. Moreover, the European Union’s competition directorate, DG IV, has successfully used competitionbased regulation to open markets and countervail the power of dominant firms. See, for example, its requirement that intellectual property be compulsorily licensed so that firms are unable to monopolise markets (or at least chill entry) through their possession of exclusive rights to desirable programming, particularly sports rights. Or its requirement that firms controlling ‘bottleneck’ facilities in the supply chain must provide competing firms with access to essential facilities on fair, reasonable and nondiscriminatory terms.3 But although competition-based regulation has very notable achievements to its credit (and must therefore remain a central instrument in the arsenal of media and communication regulators), applying the competition paradigm to media markets presents important intrinsic difficulties. Media and communications have economic characteristics which don’t fit the paradigms of neo-classical economics. Competition theory presumes that markets trade homogeneous products which are substitutes for each other. Whereas – in spite of convergence – the media are heterogeneous, The Age is only to a limited extent a satisfactory substitute for The Sydney Morning Herald, a CD is not a direct substitute for a radio programme and so on. Moreover in key communication sectors, notably in telecommunications, there are significant economies of scale and scope which means that in at least some sectors of these markets competition may be wasteful and inefficient. Furthermore, in markets for other products it may be perfectly acceptable for one supplier to go out of business and for consumers to be served by other firms providing close substitutes for the product or products which have ceased to be available. But closure of a newspaper title, a television station or a telecommunications network is a different matter. Readers of the defunct title may believe substitutes to be unacceptable, the loss of a voice articulating a particular point of view may be seen as impoverishing society as a whole (see, inter alia, Curran and Seaton, 1991 pp. 107–8) and loss of a network may leave users without a means to communicate. And whereas in other sectors, economic efficiency (and the consumers’ interest in low cost production and supply) may be best served by a few firms (perhaps even one firm) in content media, such as newspapers, radio and television, films, books and the like, plurality is a goal in and for itself.

Market failures Moreover, there are at least two major instances where effective competition may produce sub-optimal outcomes. The first concerns the so called network externality and the second the public good character of free to air broadcasting. 140

Paradigm Regained? Where to in Media and Communications Regulation? The network externality (sometimes known as ‘Metcalfe’s Law’) is the term used for the increase in the value of a network to its existing users when an additional user joins the network. Clearly, when two terminals (let us say telephones) are connected in a network and a third terminal is added to the network the value of the network to the two original users doubles: instead of each being able to call only one other user they are each now able to call two other users. Yet, although there are obvious social benefits accruing from this process, there are powerful countervailing forces which militate against realisation of the network externality in unregulated markets. Consider the case of two telephone networks of unequal size, one of four users (network A) and the other of eight users (network B). All users will benefit if the networks are integrated or interconnected because all will be able to call (and be called by) more users. But the users of the four terminal network A will benefit twice as much from integration as will the users of the eight terminal network B. Accordingly, a firm operating network B may see commercial advantage in refusing integration or interconnection with network A. We see an empirical case of this behaviour in bank ATM networks. All customers would benefit if they were able to access their account via any ATM. Yet, although universal interconnection of ATMs would benefit all bank customers with plastic cards, the customers of a small bank with few ATMs would benefit more than would the customers of a large bank with many ATMs. In theory we might argue for regulation to ensure compulsory interconnection of ATM networks but, thus far at least, the ability to get cash from each and every hole in the wall machine has been seen to be less socially important than the ability of each and every telephone to call each and every other telephone. Realising the network externality through mandatory interconnection is a key regulatory goal because the striking social benefits of any to any telecommunication are unlikely to be realised in an unregulated market. Moreover, the concept of network externality, and its realisation through regulatory mandate, is likely to become increasingly important. It applies, for example, to conditional access systems and, potentially at least, to a host of other third party access and bottleneck issues in communications. A second salient instance showing that, whilst competition-based regulation may be necessary, competition-based regulation will not be sufficient to realise the public interest. This example concerns free to air broadcasting which fails to fit the standard paradigms of neo-classical economics – it is a failed market – but broadcasting is a failed market where failure has positive social consequences. Free to air broadcasting is a non-rival product – a particular kind of market failure sometimes called a public good. That is, one person’s consumption of a broadcast does not deny another a consumption opportunity. If I eat an apple it is not available for someone else to eat whereas if I watch a television programme it is still possible for others to watch it. Moreover, the marginal cost of adding an extra viewer or listener to a broadcast is, in most cases, zero or close to zero. This means that welfare is maximised by free to air, unencrypted broadcasting, by programme sharing and exchanges between broadcasters and by many of the arrangements which public service broadcasters have evolved through their organisations for co-operation.4 Whereas subscription broadcasting may be theoretically better than free to air, because 141

Media and Identity in Contemporary Europe consumers can express their preferences through the price system, it is intrinsically more costly than free to air broadcasting and excludes non-subscribers from consumption opportunities that they could enjoy without disadvantaging any other consumer. When programming that was formally available via free to air broadcasting migrates to subscription broadcasting, viewers and listeners experience an actual loss of welfare. When programmes are screened encrypted, rather than via free to air, even though no-one may be aware of being deprived, society loses. Welfare is reduced because some, who could consume at zero cost, are deprived of the opportunity to do so. A public good is converted into a private good. Thus social benefits arise from the technical failure of the free to air broadcasting market. Social losses arise from the forced conformity of broadcasting markets to neo-classical prescriptions in a transition from free to air to encrypted subscription broadcasting – albeit that transition does introduce a direct relationship between supplier and consumer through price and enables those consumers who can afford to do so to signal their preferences. Indeed, a very hard nosed advocate of markets and competition might argue that enabling consumers to signal their preferences, and the intensity of their preferences, through price under a subscription system outweighed the welfare loss attached to a subscription system. That may be the case. Clearly any assessment of the relative benefits of free to air and subscription systems must be situated and empirical rather than theoretical and a priori. However, the welfare loss case, providing a significant rationale for free to air broadcasting (and more radically for a recasting of copyright law in favour of user rights to copy rather than authors’ monopolisation of intellectual property) has had considerably less salience than has the case for pay broadcasting. Further arguments could be made for the continuing legitimacy of sector specific regulation beyond that necessary to ensure well-functioning competitive markets. Notably, arguments derived from market failure in content and to secure the ‘universal service obligation’ (USO). To take the USO argument first. Societies pervasively choose to identify certain goods and services as an entitlement of citizenship and provide that no member of the society shall be denied access to the goods or services in question – whether free of charge or at affordable cost. Societies may designate different universal service obligations and identify different means to secure the USO – eg via direct state subsidy or requiring firms to provide the services in question as a condition of doing business – but the USO in communications is just one instance of a general class of requirement that socially desirable goods or services are generally available. It is not a matter specific to the media and communications sector. However, content issues are specific to media and communications and arise from the distinctive economic character of information. Content markets may fail by supplying too few ‘merit goods’ and too many ‘demerit’ goods. Economic theory recognises goods which confer long-term benefits but which no individual thinks worth paying for. Examples of these merit goods include high culture, scientific research, education, etc. Because free markets tend to undersupply merit goods, it’s generally accepted that there is a legitimate role for the state in providing them – hence public funding for education, the arts, research etc. This is a particularly important 142

Paradigm Regained? Where to in Media and Communications Regulation? consideration for broadcasters because free to air broadcasting provides an efficient way of delivering these merit goods to many final consumers. Conversion of broadcasting markets to subscription markets although enabling viewers and listeners to signal their preferences via price does not solve the problem of undersupply of merit goods. Similarly, there are obvious empirical instances of markets oversupplying demerit goods. Hence we have laws protecting personal privacy, torts of slander, libel and defamation, prohibition of racist utterances etc. These considerations point to a continuing role for intervention in communication markets, and therefore a qualification to van Miert’s (1996 p. 7) judgement that competition policy is ‘the most effective and least risky’ of available strategies. Whether that intervention should be through proscriptive regulation (e.g. limits on concentration of ownership), subsidies to secure desired behaviour (e.g. film and television production subsidies), or via state agencies (e.g. public service broadcasters), or by all of these is a matter for case by case judgement. My insistence on the continued necessity of regulation in respect of concentration of ownership, capturing network externalities, the social benefits of welfare enhancing market failure in broadcasting, and redressing market failure in content may seem like a case for ‘steady as she goes’ and the preservation of familiar good old things. But it should not. For times have changed – and in the UK they have changed irrevocably. Accordingly, the goal of competition and a well-functioning market is not only likely to be the best basis for regulation of a media and communications sector which is changing through an unprecedented growth in the number of firms and the convergence and interdependence of hitherto distinct markets, businesses and sectors, but is also likely to be the only generally acceptable basis for the establishment of an international regulatory regime – which is becoming more and more necessary. To take just one instance of this, the European Union’s competition regulation (regulation which has bitten hard and will bite harder on media and communications arrangements in the Member States) is based on Articles 85–90 of the European Treaty. These provisions were strongly influenced by anti-trust law in the USA via Jean Monnet who, in turn, was influenced by his friends and colleagues among United States anti-trust lawyers. More specifically, it’s striking how the essential facilities doctrine which basically informs interconnection regulation and promises to provide a powerful basis to check firms’ abuse of market power through their control of essential facilities – not least in respect of conditional access systems – derives directly from American transportation regulation notably the Terminal Railroad case of 1912. Its implementation in the UK, largely via Oftel, involves continuing formal and informal collaboration and division of labour between UK and European agencies and not infrequent co-operation with the FCC. Here we can see a striking form of convergence in regulatory ideology in action. However, as stated, because some forms of market failure in media and communications are socially beneficial and because some instances of well-functioning competitive markets in the sector are likely to produce sub-optimal social outcomes – notably too many negative externalities and too few positive externalities in media content and/or unacceptable diminution of sources of supply through concentration of 143

Media and Identity in Contemporary Europe ownership – intervention in media markets, whether through negative or positive regulation or through public sector institutions, is required for the foreseeable future. The two chief difficulties in devising a stable and predictable regime are first in finding a doctrine which will coherently reconcile the competition paradigm with the need to continue to capture the social benefits of market failure – particularly in free to air broadcasting. And second, in reaching a durable general international consensus on the exercise of common regulatory principles so that firms cannot evade regulation in the public interest by extra-territorial location in a permissive haven. What is required is thinking through the doctrine and institutional structures required to secure the public interest in circumstances where the chief regulatory lever, or cosh, formerly used – entry control – is no longer effective. Competition-based regulation provides a coherent and effective basis for the regulation of abuse of market power by firms to which entry control in many instances has now passed. Moreover, it provides the least unpromising basis for the international regulatory co-operation now increasingly required. But it does not provide a satisfactory basis for capturing the benefits of the failure of (some) communication markets. However, neither does the old way based on entry control. To adopt and adapt Bertolt Brecht’s epithet, the competition based regulatory paradigm represents ‘the bad new things,’ the entry control paradigm ‘the good old things.’ The challenges of digitalisation require new regulatory institutions and initiatives. The bad new things provide a considerably better foundation on which to build than do the good old ones.

Acknowledgements This chapter was first published as ‘Paradigm regained? Where to in media and communications regulation?’ in Cultural Crossroads. (1998) ed C . Spurgeon. pp. 37–47. Sydney. Communication Law Centre. An earlier version was presented as a keynote address at the Cultural Crossroads conference organised by the Australian Key Centre for Cultural and Media Policy in Sydney 1997.

References 1

2

The pluralisation of media markets, leading to a practical problem of implementation of ‘old style’ regulation (in which the monitoring of firms’ performance had a big part) when more and more firms enter markets has been amplified by the disaggregation of vertically integrated firms and supply chains. Disaggregation has taken place spontaneously, for commercial reasons, and in consequence of Government policy. It’s most strikingly evident in terrestrial television broadcasting where vertically integrated firms, eg the BBC, have both been required to disaggregate (e.g. by procuring programming from independent producers and privatising the engineering and transmission functions which formerly were carried on ‘in house’) and have also done so to promote efficiency (e.g. in the introduction of internal markets and option of outsourcing factors of production under the ‘Producer Choice’ doctrine). In the first quarter of 1997 79% of fixed link PSTN revenues accrued to BT, BT supplied 89.8% of PSTN exchange lines (Oftel, 1997 p. 11) and BT accounted for 67% of the turnover of the UK telecommunications industry (Oftel, 1997 p. 3).

144

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See, inter alia, the Eurosport/Screensport case (Decision 19.2.91 in OJ L 63/32–44 9.3.91) and the ARD case (Decision 15.9.1989 OJ L 284/36-44 3.10.1989) for rights licensing. The essential facilities doctrine is rooted in US transport regulation – (see the Terminal Railroad case: United States v Terminal Railroad Association 224, US, 383 (1912) – and has been used in several instances by the EU (see B&I Line v Sealink Harbours Limited [1992] 5 CMLR 255, British Midland Airways Limited v Aer Lingus PLC [1993] 4 CMLR 596). The head of DG IV’s directorate on Information, Communication and Multimedia, John Temple Lang, has authored a comprehensive study of the essential facilities doctrine (Temple Lang,

4

1994). In Europe the European Broadcasting Union.

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11 Back to the Future – Digital Television and Convergence in the United Kingdom Introduction In 1897 the world’s first patent for wireless telegraphy was granted to Guglielmo Marconi in London. Later in the same year Marconi established his own company – first named ‘The Wireless Telegraph and Signal Company Ltd’ and which subsequently was properly and simply named ‘The Marconi Company.’ Marconi’s pioneering work reminds us that, although it’s now a commonplace to assert that the pace and extent of contemporary changes to communications are unprecedented, in some sense digitalisation returns us to a past in which we can see the future. Though the contemporary digital converged environment is undoubtedly different from the analogue environment which it is supplanting, it’s salutary to reflect that Marconi’s first wireless transmissions were a form of digital communication. His first wireless transmissions used the digital Morse code, most famously for his deservedly celebrated invention of trans-Atlantic wireless communication when he transmitted the letter ‘S’ in Morse code between Poldhu in Cornwall and Signal Hill Newfoundland in 1901. Just as Marconi’s innovations transformed communications policy and practice a century ago, so too does the contemporary integration of voice, video and data into a digital bitstream fundamentally challenge established commercial and regulatory practices. This is nowhere more so than in the convergences of hitherto distinct media of content and carriage, of wired and wireless communication, and of point-to-point and point-to-multipoint communication into a single digital signal transmitted through a universally interconnected global network. In a real sense, therefore, the challenges of digitalisation take us ‘back to the future.’ The contemporary UK case has both a unique and a representative character. Unique because of the UK’s prominence in the European Union’s media and communication economy, the success of its public service broadcasting (which still accounts for more than 50% of television and 47% of radio consumption) and the government’s firm commitment to rapid development of digital terrestrial television (DTT) – representative because the UK’s liberalisation and privatisation policies and the regulatory order which attended them foreshadow emerging, liberalised, EU arrangements. The UK case shows both the qualitative change in media policy and regulation that new communication technologies have imposed, and the continuing necessity for sector specific regulation. The key change is a shift in control of market entry from government to firms. This shift has led both to pluralisation – and therefore to 147

Media and Identity in Contemporary Europe competition as a governing policy paradigm, and to a paradoxical potential for significant market power to be exercised by one or many firms. The market power of dominant firms mandates regulatory intervention to prevent control of essential facilities being used to bar entry of other firms to relevant markets. But the shift in the power to control entry, from government to firms, means that regulation must be exercised in a new way. Yet in spite of the salience of the UK, in some respects the UK lags behind other European partners. France, Italy and the Netherlands are all more advanced in the transition from analogue to digital broadcasting. Moreover, the UK is behind Italy in establishing a single regulator for media and communications, behind Finland for Internet connectivity, Sweden for penetration of mobile (and wired) telephony and so on. But the 1997 UK licensing of digital terrestrial television (DTT) broadcasters suggests that the UK may be the first EU Member State to introduce digital terrestrial television.

Why digital? The transition from analogue to digital communication offers significant advantages to key media and communication interests. Digital broadcasting uses the radio frequency spectrum more efficiently – a single analogue television channel uses at least eight times (and, as digital compression techniques improve, probably considerably more) as much of the scarce spectrum resource than does digital transmission. Moreover, television is very spectrum hungry – a colour television channel and 2,000 two-way voice telephone channels use similar quantities of spectrum. The UK spectrum authority, the Radiocommunications Agency, estimated that replacing analogue by digital terrestrial television would contribute £3.6bn to UK GDP (1997 p. 4). Of course, much of what the Radiocommunications Agency counts as an increase in GDP is the cost of the transition which will largely be born by the residential consumer replacing analogue equipment – radio and television receivers, video cassette recorders and the like. The growth of both telephony and broadcasting are making increasing demands on the scarce spectrum resource. In the UK mobile telecommunications grew by 50% and broadcasting by 26% between 1993 and 1996. And radio communication’s contribution to the UK economy is growing (c11% pa) far faster than the economy as a whole (c3% pa) and endows the economy as a whole with increasing levels of general efficiency gains.1 Furthermore, the efficiency gains conferred by digitalisation will enable government to increase revenues from selling a hitherto under-exploited public resource – the radio frequency spectrum. Since 1993 in the USA, where spectrum sale is best established, the Federal Communications Commission’s (FCC) fourteen spectrum auctions have realised more than $23bn – and cost only c0.28% of revenues raised (source http://www.fcc.gov.wtb/auctions/summary/revenue.gif). The UK has followed the lead of the USA. In July 1997 the Department of Trade and Industry (DTI) announced that it would use an auction to allocate spectrum and licences for Universal Mobile Telecommunications Systems (UMTS). In spite of the costs to consumers, the greater productivity of digital communication – enabling governments to use the radio frequency spectrum more efficiently, easing 148

Back to the Future – Digital Television and Convergence in the United Kingdom new service providers’ entry to markets from which they have hitherto been excluded and facilitating the development of new services through a seamless integration of broadcasting, telecommunications and computing – points to an inexorable digitalisation of communications and explains the UK Government’s encouragement of digital terrestrial television. Indeed, so strong is the UK Government’s commitment to spectrum ‘farming’ to raise revenue that Dr Chris Smith, the Secretary of State for Culture, Media and Sport, acknowledged (in a speech to the Royal Television Society’s annual conference) that the Government was considering accelerating digitalisation of broadcasting by subsidising consumers (Financial Times, 19.9.1997 p. 20).

The digital challenge to regulation The convergence of telecommunications, computing and broadcasting into a single digital bitstream poses obvious challenges to a regulatory regime organised around historically distinct media and communication technologies. In this respect the UK is singularly ill adapted to face the challenges of convergence and digitalisation. The UK has (at least) ten separate statutory and self-regulatory agencies for media and communications – not counting the provisions of statute and common laws, the powers of Government Departments, the European Commission and bodies such as the Office of Fair Trading and the Radiocommunications Agency. 2 Therefore it is not surprising that Michael Redley, the Secretary of the Independent Television Commission, described this regime as a ‘riotous mixture of exclusive and non-exclusive regulation’ (Redley, 1996 p. 20)! The ‘riotous mixture’ is sub-optimal. Jurisdictional jealousies are endemic, different regulatory regimes apply to services which are close substitutes (eg video on demand and near video on demand), a single product supply chain is subject to regulation by different agencies and it is often unclear where regulatory responsibility lies for new products and services, for example, who regulates a newspaper on the World Wide Web with video inserts? 3 The UK Government has foreshadowed its intention to reregulate the sector and establish a single regulator – an Ofcom (Office of Communications), though both the boundaries of Ofcom’s jurisdiction and the pace of regulatory convergence remain to be defined. The flaws in the established regulatory arrangements became clear in the troubled allocation of the UK’s digital terrestrial television licences in 1997.

Licensing UK digital terrestrial television First, it’s important to realise that neither the UK Government’s decision to allocate spectrum for terrestrial transmission of digital television nor the specific manner of implementation of that policy decision were necessary or inevitable. Instead of making spectrum available for DTT, the government might, for example, have decided to accelerate what has come to be known as the ‘Negroponte switch’4 in the UK and promote a shift of television transmission from wireless to wired distribution. Or it might have decided to promote satellite broadcasting of television signals.5 Both these possible policy options would have assisted release of spectrum for other services such as radio mobile communication. Having decided to promote digital terrestrial 149

Media and Identity in Contemporary Europe television the government determined that spectrum should be allocated to six ‘multiplexers.’ The multiplexers would be responsible for the simultaneous weaving together of several signals, each using varying quantities of bandwidth,6 to optimise efficient use of spectrum. One multiplex was allocated to the BBC, and capacity on the remaining multiplexes was reserved for established analogue terrestrial broadcasters (Channel 4/S4C, ITV, Channel 5, Teletext and a Scots Gaelic service) to ensure the continued availability of established public service television channels (although the public service incumbents will also be permitted to offer additional services using their digital bandwidth). Capacity on four multiplexes (designated A, B, C, and D) was reserved for new services and the Independent Television Commission was charged (Broadcasting Act 1996 Section 8(2)) with awarding these four multiplexes. Multiplex A was sought only by the Welsh public broadcaster S4C, but the other three (multiplexes B, C and D) were the subject of rival bids. One from BDB, a consortium made up of the two strongest commercial terrestrial broadcasters in the UK – Carlton and Granada (which, together, control ITV analogue terrestrial franchises covering the main population centres of England – London, the Midlands and the North – accounting for approximately 21% of current UK television viewing share and which, if they retain their existing ITV franchises, will enjoy access to the ITV digital terrestrial multiplex) in alliance with BSkyB (the dominant UK pay television operator, in which Granada is a significant minority shareholder, providing services via satellite to c4m homes and via cable to c2.2m). And another, DTN, from CableTel (a US based company with UK cable franchises and the owner of NTL, the company contracted to provide analogue terrestrial transmission services for Channels 3, 4 and 5) and United News and Media (third to Carlton and Granada in importance in the ITV system – with c7% of UK viewing share – part owner of Channel 5 and owner of significant newspaper interests). The ITC was mandated to decide between rival applicants on the basis of six criteria: 1 2 3 4 5 6

extent of coverage speed of roll out ability to establish and maintain the service programme appeal to different tastes and interests promoting take up of decoders ensuring fair and effective competition in programmes and services

The ITC awarded the three digital terrestrial multiplexes to the Carlton/Granada consortium and required BSkyB to quit the consortium and to contract to supply programming to the consortium it had been required to leave! That this resolution provides BSkyB with a positive outcome, which its owners could not have imagined in their wildest dreams (release from the risk and investment responsibilities involved in launching the new channel, a £75m ‘golden goodbye’ from its erstwhile partners and a guaranteed market for its programming) is of secondary importance to the regulatory 150

Back to the Future – Digital Television and Convergence in the United Kingdom conflicts which the ITC’s decision made apparent. 7 These conflicts which are representative of the difficult transition from a familiar, old media order. They are also characterised by clear boundaries between media, government control of market entry via the allocation of elaborately specified (and closely monitored) licences awarded to a few firms after ‘beauty contests,’ to a new order of many firms, erosion of government control of entry, convergence between hitherto distinct firms and sectors and ‘generic’ regulation which sets the terms on which firms operate but which does not ‘pick winners.’

Competition or beauty contest The failure of the UK’s regulatory order to fully recognise and adapt to changed circumstances accounts for many of the confusions and sub-optimal outcomes of current policy. The chief failure has been a continued adherence to a regulatory system based on Government control of entry when, now, it is no longer Government but firms with significant market power which control entry. Perhaps this statement puts the issue too starkly and hyperbolically. Clearly, Government does dispose of significant power to control entry; if it did not firms would not apply for licences, bid for spectrum and agree to adhere to whatever conditions of licence Government and regulators prescribe. But the trend towards a shift in the power to control and set the terms of market entry from Government to firms is clear. The trend became starkly evident in 1990 when British Satellite Broadcasting (BSB) succumbed to intense competition from News International’s Sky Television to merge with Sky and form BSkyB (which now provides the principal non-terrestrial television services received by UK satellite and cable homes). BSB had been granted a UK monopoly for a direct to home satellite television licence by the UK regulator and licensing authority, then the IBA (Independent Broadcasting Authority). Sky, on the other hand, by using the Luxembourg Astra satellite and the provisions of the European Community’s single market in television doctrine, was able to circumvent the entry controls of UK regulation and provide so effective a competing force that the officially licensed monopoly, BSB, was forced to accept a merger with Sky on unattractive terms. Subsequently, entry control has accrued to BSkyB thanks to the control it and associated companies exercise over a wealth of complementary bottlenecks and loci of competitive advantage – for example, conditional access, subscription management, premium programming, cross-promotion in media controlled by associated companies, transponder capacity, and so on. BSB’s failure was a crucial transition point in UK broadcasting policy. For the first time an officially sponsored monopoly failed in competition with an unplanned, and officially unwelcome, new entrant to the market. Henceforth, although terrestrial services continue to maintain a very considerable strength, with a c88% share of viewing, 8 the old broadcasting order, distinguished by a few officially licensed vertically integrated organisations providing highly regulated services, has come to an end, as may be seen by examining the variety of possible paths to implementation of digital television services in the UK. Similar, albeit less striking, trends are apparent in telecommunications. Here the situation is different in that the regulator, Oftel, is 151

Media and Identity in Contemporary Europe charged in the 1984 Telecommunications Act with maintaining and promoting ‘effective competition between persons engaged in commercial activities connected with telecommunications in the United Kingdom’ [Telecommunications Act 1984 Part I (2) (b)]. Accordingly, promotion of entry has been a major policy consideration.9 Yet, in spite of extensive competition between network and service providers, the dominant operator, British Telecommunications, was ranked 9/9 on dominant operator’s strength by Public Network Europe (Public Network Europe, 1995 pp. 40, 117, 123). Cable, to which considerable entry assistance has been given (notably, but not exclusively, by denying BT [and Mercury] the economies of joint provision of telephony and television services enjoyed by cable until 2001) in the interests of promoting competition, remains weak. Franchises have not yet been fully built out, penetration of homes passed averages 21% and cable operators are ground between two price setters – BT for voice telephony and BSkyB for subscription television services. If it is government policy which fostered entry to the cable market it is dominant firms which set the terms on which entrants compete.

Alternative modes of delivery of digital television Accordingly, given the erosion of the government’s ability to control entry and to shape market outcomes,10 the success of DTT – albeit strongly supported by the UK Government – cannot be taken for granted. For digital television can be provided by a variety of transmission paths. This pluralisation of delivery systems both testifies to government’s loss of control over entry and also suggests, plausibly but erroneously, that markets are functioning well and that competition can be left to flourish and deliver, as all well-functioning markets do (at least in economic theory), an optimal matching of supply to demand and the most efficient use of resources. However, a plurality of transmission paths does not mean that markets are functioning well and that competition can thrive under a regime of ‘light touch’ regulation. For some firms are endowed with significant market power which may be used anti-competitively. There are at least six alternative means of providing access to digital television using wired and wireless transmission paths. Wired services (particularly ADSL,11 Internet and the hybrid wired/wireless BIB – British Interactive Broadcasting – system) offer a greater potentiality for interactivity than do wireless systems. Which of the new delivery technologies will succeed depends on the outcome of a variety of uncertain scenarios. Wireless

Wired

Hybrid

Digital Terrestrial Digital Satellite

ADSL Cable Internet

BIB12

The plurality of means of access to digital television services indicates, first, that established regulatory arrangements, whereby one regulator (the ITC) was broadly 152

Back to the Future – Digital Television and Convergence in the United Kingdom responsible for regulation of wireless services and another (Oftel) for wired services, are no longer appropriate; second, that the established broadcasting regulatory paradigm of control exercised via licensing of a scarce resource (most evident in the case of the radio frequency spectrum) providing service providers with access to consumers, is no longer effective, and third, may appear to suggest that regulators’ concerns about a dominant firm’s possible abuse of a dominant position have no substance given the alternative paths digital television signals might take to homes. However, although the first and second suppositions above are well-founded, the third may not be. Assessments of the viability and competitiveness of alternative delivery paths for digital television differ. It is a matter of fact that in the UK no wireless digital television services yet exist. However, there is a general consensus that BSkyB will introduce digital satellite television services long before digital terrestrial services are brought on stream.

Wireless BSkyB’s established competitive strength in analogue satellite services provides it with a promising base from which to launch digital services. Although BSkyB has succeeded in penetrating only c20% of UK television homes with its analogue direct to home (DTH) services, the revenue streams from this customer base, allied with those accruing from the relay of its services via cable to a further c2.5m homes, has endowed BSkyB with annual revenues which exceed those the BBC devotes to its television services. And has enabled BSkyB to relentlessly improve its competitive position by securing exclusive rights to more and more premium programming. Moreover, BSkyB is a senior partner in the projected hybrid wired/wireless BIB system.

Wired Services Although there are, to date, no digital cable services, cable 13 seems the strongest of the possible wired digital service providers, in that cable networks exist, are providing service, have created a customer base and have experience of providing a portfolio of wired telecommunication services including pay television. However, considered in other contexts cable appears rather weak. Cable services are accessible to less than half UK television homes (in mid 1997 9.4m homes were passed by cable) and of those potential cable television homes only 22% subscribed to cable. Thus, of the total universe of UK television homes, cable accounts for only 8.8% of homes. Moreover, cable has yet to succeed in developing a portfolio of unique programming services. Accordingly cable is currently little more than a relay system for BSkyB’s programming services.14 Currently, therefore, cable operators enjoy thin margins in their major TV business – the relay of BSkyB services to consumers. Digitalisation is both a threat and an opportunity to cable. Threat in that conversion from analogue to digital services will drain yet more cash from cable franchisees hard pressed to finance their continuing programme of network construction. Opportunity in that cable can make consumers’ conversion from analogue to digital simpler, easier and cheaper than can cable’s principal rival – satellite television. 153

Media and Identity in Contemporary Europe As for other wired services, ADSL has also yet to be implemented (although BT envisages launching an ADSL service to potential customers in a limited geographical area in 1998) and access to Internet television is limited to households endowed with both a powerful (and expensive) personal computer and a broadband connection to the World Wide Web. Estimates of the number of homes with Internet access vary – as might be expected – however the London consultancy Informed Sources (1997 p. 38) estimates 0.8m homes with Internet access and a BBC source (Edward Briffa, quoted in The Times 20.9.1997 p. 10) estimated that 3.1m people in Britain had Internet access.15 Internet access clearly remains a workplace rather than a domestic phenomenon and even when there is domestic Internet access it is usually via a PC and in a quasi-office environment – not via a television receiver in a living room. No service provider in the UK has yet implemented digital services using television in the living room as the gateway. However, there can be little doubt that such services will soon be offered. In the USA, Microsoft – through its purchases earlier in 1997 of WebTV (for $425m) and a share of Comcast (with 4.3m cable subscribers)16 has assembled the elements necessary to do so (though the US consortium may well find an initial offering of analogue services more cost efficient). In the UK a consortium of BSkyB, British Telecom, Matsushita and the Hong Kong and Shanghai Bank (which owns one of the major UK retail banks) announced a new service – British Interactive Broadcasting (BIB) discussed below. There is an obvious potential for cable companies to offer interactive digital services but, to date, none have been implemented.

Hybrid BIB will downlink via a satellite to a BIB box connected to a domestic television set and use the narrow band wired return path connection provided by a PTO to signal consumers’ preferences (and the information required for billing subscribers). The BIB box will provide access to the ‘bouquet’ of BSkyB pay television services already delivered by satellite direct to homes. The impact of BIB must, of course, remain a matter for speculation. However, it represents a genuinely ‘converged’ application and sets intriguing regulatory problems. Potentially, BIB poses a variety of market entry problems due to its sponsors’ ability to control several important gateways. The BIB ‘box’ – the customer premises equipment – is likely to command access to digital television itself and, depending on the box’s functionality, access to non-BIB members’ digital services may be constrained. The conditional access system embedded in the box provides BIB members with a similar gatekeeper power; the box’s connection to the narrow band return path provides a gateway to a PTO 17 network; the navigation system for accessing television and Internet/World Wide Web content is yet another gateway potentially endowing BIB members with the ability to constrain and direct consumer choice – including choice of payment system and agent for interactive shopping conducted via BIB; the data generated by consumer use of the interactive functionality of the BIB box potentially enables service providers to ‘push’ targeted programme material, advertising and direct purchase opportunities to BIB users. 154

Back to the Future – Digital Television and Convergence in the United Kingdom Regulatory issues However, even if the most optimistic assessments of the viability of alternative transmission paths are accepted, the plurality of modes of delivery of digital services masks key loci whereby market power can be exercised (for an excellent comprehensive discussion of this issue see Cowie and Crowther 1997).18 First, although there are, as shown above, several alternative modes of delivering digital television services to homes, not all modes are equal in respect either of the time they come to be generally implemented or their likely penetration of a critical mass of UK television homes. In consequence, there are likely to be important first mover advantages for the first firm(s) to penetrate a large number of homes. Second, the plurality of delivery systems masks at least three loci of power (and, as the discussion of BIB indicates, there may be many more) which prevail within the digital television supply chain within which each of the distinct transmission/delivery alternatives identified are embedded. These three principal loci of power are: • programming (particularly premium programming – i.e. films and sport), • digital/analogue ‘boxes,’ the hardware required to give viewers with analogue receivers (i.e. the whole existing universe of UK television homes) access to digital services, • revenue collection/conditional access systems. Internet

Satellite

ADSL

DTT

Cable

BIB

Programme

Theoretically infinite, but in practice, limited supply of premium programming

Control of premium programming key locus of power

Control of premium programming key locus of power

Control of premium programming key locus of power

Control of premium programming key locus of power

Control of premium programming key locus of power

Revenue Collection

Requires secure debit system. Yet to be implemented BSkyB

Head end

BSkyB

Headend

BSkyB

satellite and transponders in key position BSkyB

BT

Carlton/ Granada

Cable cos.

BT/BSkyB

Digital/ Analogue box Transmission

Raw bandwidth from PTO

In each of these three loci of potential power, as well as in some modes of the notionally pluralised area of transmission/access system, significant actual or potential power is exercised by BSkyB. 19 Moreover, the combination of different loci of power exercised by BSkyB means that there is a potential to lever power from one sector into another and to exercise effective power over the totality of the supply chain even though the firm does not exercise absolute or unchallenged market power at any 155

Media and Identity in Contemporary Europe individual point in the supply chain. Of course, other firms (not least BT) may also exercise significant market power at some key points in some modes of access to digital television but over the ensemble of possible delivery systems and supply chains it is BSkyB’s potential power that is most striking. However, it should not be forgotten that the definition of the relevant market in respect of digital television is not straightforward. A plausible claim could be made that digital television is not a distinct market but merely one element in a total television market – a market which is currently wholly analogue and which, at least when digital services are first implemented and for some time thereafter, is likely to be still dominated by analogue services. Seen in this light, firms such as Carlton and Granada (and the BBC) appear to be significant competitors and may offer significant potential checks to BSkyB’s putative market power. On the other hand, as the transition to digital progresses potential market power exercised via control of gateways or ‘bottlenecks’ in the supply chain is likely to become more significant and enable a firm controlling ‘bottleneck’ essential facilities to chill competition and/or block market entry. Outcomes within the digital television market remain uncertain. That they are so testifies to changed circumstances and in particular the changed balance of power between firms on one hand and government and regulation on the other. Accordingly, inescapable questions impose themselves: how best to regulate the newly pluralised and converged electronic communications sector and how best can government secure public policy and public interest goals? These are questions which are relevant to matters extending far beyond digital television. The UK’s policy and practice in respect of the introduction of DTT reveal many salient general characteristics of this new policy and regulatory order.

Changed terms between the regulator and regulated Change has been driven by several distinct but interdependent factors. First, there has been an erosion of the distinction between private point-to-point wired communication and public-point to-multipoint wireless communication. Second, new distribution technologies, notably – but not exclusively – television satellites, complemented by international agreements, such as the European Union’s Television without Frontiers directive (89/552/EEC amended by Directive 97/B6/EC) to integrate markets have made the exercise of national communication sovereignty increasingly difficult. Third, vertically integrated organisations, which formerly covered the whole television supply chain from programme production to transmission, have been disaggregated (both because of regulatory requirements and commercial choice). And fourth, a host of new forms of distributing television signals have come to market. In consequence, the locus of state control over broadcasting – political control over a scarce resource, the radio frequency spectrum – has weakened considerably. Indeed, one of the principal rationales for government policy has been the attempt to retain some measure of control over television by promoting development of distribution media that continue to be susceptible to a measure of government control – i.e. cable and terrestrial digital transmission. However, UK evidence, albeit partial and perhaps 156

Back to the Future – Digital Television and Convergence in the United Kingdom premature evidence, suggests that these media of transmission and loci of control are relatively weak.

Paradigm clash: How to regulate the digital world Following publication of the ITC’s decision on 24th June 1997 to award three multiplex licenses to BDB (the Carlton/Granada consortium after BSkyB had been detached), the telecommunications regulator, Oftel, published the submission it had sent the previous month to the ITC on the competition issues arising from the award of the DTT multiplex licences. Oftel’s submission clearly advocated licensing DTN rather than BDB on competition grounds. Oftel’s comment, on a decision clearly within the ITC’s remit, was based on its statutory mandate, defined in the Telecommunications Act 1984, to promote competition in telecommunications systems and services,20 and DTT is a telecommunication system within the meaning of the Act.21 Indeed, Oftel’s jurisdiction applies in a host of areas that were formerly assumed to be within the broadcasting domain, eg the contractual terms on which terrestrial broadcasting transmission is undertaken, the conditional access systems at the heart of pay television services (see, inter alia, Oftel, 1995, 1996, 1997). The case, independent of the merits of Oftel’s and the ITC’s analyses, strikingly demonstrates the difficulties presented by non-exclusive jurisdictions over a ‘converged’ regulatee. Oftel, whilst recognising that ‘competition is only one, albeit an extremely important one, of the matters to be considered by the ITC’ (Oftel, 1997 p. 1) vigorously argued that on competition grounds, ‘the DTN bid would be far ahead of the BDB bid’ (Oftel 1997, p. 2 para 10) because a successful BDB would ‘foreclose competition in UK premium programming across all platforms and […] significantly weaken competition between transmission networks’ (Oftel 1997, p. 2 para 7). Moreover, BDB’s success would reinforce dominant positions in broadcasting’ (Oftel 1997, p. 13 para 67). Publication of Oftel’s comments on the day the ITC announced its decision provoked an explosive response from the ITC. That night, on the BBC’s late night radio programme reviewing the day’s business news, the ITC Chairman, Sir Robin Biggam, robustly admonished Oftel, in the person of its Director General Don Cruickshank, for interfering in a matter over which the ITC had jurisdiction. But the pleasures afforded by the spectator sport of regulatory conflict, intense though they may be, are secondary to the substantive issues. First, that of the merits of the DTT case itself and second the light the DTT case sheds on regulatory practices and paradigms. Oftel acknowledged that ‘it is tempting to argue that only detailed regulation can prevent these anti-competitive practices’ (Oftel 1997, p. 3 para 15) but argued that ‘experience in telecomms suggests that, where it is possible, regulation which encourages greater competition produces greater choice and value for the consumer than direct regulation of the output’ (Oftel 1997, p. 3 para 15). Its statement succinctly captures the essence of the key contemporary regulatory policy issue – a choice between generic, competition based, regulation where the regulator’s role is to ensure that markets work (on the implicit, or explicit, assumption that a well-functioning market is sufficient to secure the public interest) and regulation based on the exercise of specific regulatory powers which, either through allocation of a scarce publicly-controlled 157

Media and Identity in Contemporary Europe resource or through the exercise of legal powers of reward and punishment ensures that the regulator can secure desired behaviour from a regulated firm or firms. UK broadcasting regulation has, broadly, followed the latter paradigm and telecommunications regulation the former. However, broadcasting regulation has worked, insofar as it has worked, to the extent that market entry could be controlled by the regulator and Government. Telecommunications regulation has been designed to promote entry of new firms and has therefore sought to prevent, inhibit and if necessary punish dominant firms from unduly exercising their market power. It is a regulatory strategy that does not rely on the ability to control market entry. Indeed, it is predicated on the need to prevent dominant firms from inhibiting market entry and thereby disadvantaging consumers. It has at its centre the presumption (and regulatory requirement) that goods and services be supplied on fair, equal and non-discriminatory terms, thus fostering competition. As such, it complements the exercise of the European Union’s competition law and regulation by DG IV (the EU Competition Directorate) rather than conflicts with it. The difficulty of reconciling the UK tradition of regulation via entry control with the imperatives of competition law and policy are likely to grow. DG IV’s concern about the ITC mandated programme supply contract between BSkyB and BDB is one case in point.

Well-functioning markets and the consumer interest Competition law, and competition based regulation, is based on the presumption that a well-functioning market will deliver outcomes that approximate to the public interest (for a powerfully reasoned, and extremely influential, exposition of these propositions in respect of broadcasting see Peacock 1986). In theory, there is a substantial correspondence between the characteristics of a well-functioning market and many of the broadcasting policy goals which hitherto regulation has been believed necessary to achieve – notably: diversity of supply, quality of product, high levels of consumer satisfaction and a high level of consumer surplus. Moreover, when technological and (whether endogenous – as in the UK choice of liberalisation in telecommunications – or exogenous – eg in the form of EU requirements) regulatory change conspire to increase the number of firms regulated, regulation based on general principles of competition policy is potentially well-adapted to the pragmatic challenges of the future. But two sorts of difficulty follow. First, the empirical difficulty that current developments in the broadcasting market give cause for concern that goals common to competition and regulated paradigms – such as diversity of supply, quality of product, high levels of consumer satisfaction and a high level of consumer surplus – are not being achieved. Notably, because of an increased concentration of ownership and a growth in the market power of the chief pay television operator, BSkyB, leading both to barriers to entry and reduction of the consumer surplus in both the pay tv and, because of cross impacts in programme supply, rights markets, etc, in the free to air sector. The growing concentrations of power in the television sector, driven both by market pressures and by regulatory decisions (both permissive – loosening restrictions on concentration of ownership and pro-active – the use of quality criterion in allocating 158

Back to the Future – Digital Television and Convergence in the United Kingdom franchises, thereby advantaging established firms with a track record of performance relative to new entrants with no record of delivery of quality) has contrasted with the erosion, albeit slow, of the market power of incumbent telcos by regulatory policies of entry assistance in telecommunications. Admittedly this is a contentious judgement because several exogenous factors (such as the existence of the BBC and its salience – a 44% share of television viewing – the presence of similar concerns in the non-regulated press sector – News International’s newspapers account for c33% of circulation of national daily and 38% of national Sunday newspapers 22 – and other issues – notably those of content regulation – in broadcasting) complicate the issue. And second, there are undoubtedly forms of market failure which have positive consequences for consumers. Free to air broadcasting is a non-rival product – a particular kind of market failure sometimes called a public good. That is, one person’s consumption of a broadcast does not deny another a consumption opportunity. If I eat an apple it is not available for someone else to eat whereas if I watch a television programme it is still possible for others to watch it. Moreover, the marginal cost of adding an extra viewer or listener to a broadcast is, in most cases, zero or close to zero. This means that welfare is maximised by free to air, unencrypted broadcasting, by programme sharing and exchanges between broadcasters and by many of the arrangements which European public service broadcasters have evolved through the EBU. In contrast, subscription broadcasting is more costly than free to air broadcasting and it excludes non-subscribers from consumption opportunities that they could enjoy without disadvantaging any other consumer. When programming that was formerly available via free to air broadcasting migrates to subscription broadcasting viewers and listeners experience an actual loss of welfare. When programmes are screened encrypted, rather than via free to air, even though no-one may be aware of being deprived society loses. Welfare is reduced because some, who could consume at zero cost, are deprived of the opportunity to do so. A public good is converted into a private good and some of the consumer surplus hitherto enjoyed by viewers and listeners is converted to rent captured by the broadcaster. Thus social benefits arise from the technical failure of broadcasting markets and social losses arise from the conversion of broadcasting markets which technically fail, to broadcasting markets which technically function well.

Crossing the Rubicon But however beneficial free to air broadcasting markets may have been for consumers (and the extent to which the theoretical benefits of market failure were enjoyed by viewers and listeners as an increment to the consumer surplus or by broadcasters who, insulated from competitive pressures, programmed their services to suit themselves rather than their consumers, varies from place to place and from time to time) the old broadcasting order is dead and gone. There has been too great an increase in the number of licenced firms (1000+ in telecoms, 350+ in broadcasting in the UK), so comprehensive a disaggregation of a sector where formerly vertically integrated firms embracing programme production, channel assembly, branding and sale, transmission 159

Media and Identity in Contemporary Europe and revenue collection have been separated, and so thorough a globalisation of the sector whereby programme and channel supply at retail and wholesale level is sourced from outside the UK, for old style regulation to endure. Allocation of the DTT licenses is a case in point. The ITC’s licensing decision, even with divestiture of BSkyB from BDB, has meant that the market power of already dominant players is further consolidated (albeit this is an entailment difficult to avoid arising from criteria 2, 3, 4 and 5 of ITC’s remit). The crucial loci of BSkyB’s market power, control of conditional access systems and of premium content remain untouched, and in the case of content, further consolidated. The old regulatory policy of putting all the eggs into one, or a few, basket(s) – firms chosen after a ‘beauty contest’ – and watching the basket(s) closely – via close monitoring of conditions of licence – must give way to a new policy paradigm, not least because there are too many firms to monitor closely and regulatory control of entry has diminished. Entry is more and more controlled by market rather than regulatory power. Hence, the key regulatory issue is no longer allocating a scarce resource to the firm offering the greatest social dividend but of inhibiting the abuse of market power by dominant firms. This does not mean that effective competition regulation is sufficient to secure the public interest, only that it is necessary to it (and is unlikely to be effectively secured under a regime, and by institutions, oriented to entry control and trading off quasi-monopoly entitlements for social dividends). Further measures, whether via subsidy, public sector institutions or conditions of licence, will be required. The chief loci of contemporary market power are control over bottlenecks/essential facilities and over premium content. Why are these problems? Control of bottlenecks can prevent or chill entry – weakening diversity and enabling dominant firms to capture the consumer surplus in rents. Control of content can do the same. In theory, of course, control of either essential facilities and/or content by a dominant firm may incentivise entry and the development of competitive supply. But not only may such competition be wasteful in that it unnecessarily duplicates the products in question but there is substantial empirical evidence to suggest that the combination of market power in both areas chills entry rather than promotes it. The vertical integration of the major Hollywood movie producers with film distribution and key exhibition venues is a particularly clear analogous case which resulted in successful anti-trust actions by the US Justice Department (see United States versus Paramount Pictures. 334 U.S. 131).13 Whatever the future of digital television in the UK the licensing decision made one thing clear. It starkly clarified the disjuncture between the regulatory paradigms inhabited by the ITC and by Oftel. The first paradigm is characterised by a presumption that Government and regulator can control entry and thereby require firms to behave in the public interest. The second paradigm presupposes that dominant firms may control entry, and that such control is unlikely to be in the public interest. Accordingly, the regulatory task is to curtail dominant firms’ abuse of market power. It is now the second paradigm which provides an appropriate basis for securing the public interest in contemporary circumstances. The challenges of digitalisation 160

Back to the Future – Digital Television and Convergence in the United Kingdom require new regulatory institutions and initiatives. However, although the competition paradigm is a necessary basis for regulation, it is unlikely to be sufficient. For market failure in television has had beneficial social consequences and the old regulatory order based on entry restrictions succeeded in capturing many of them. Circumstances have changed so much that the old methods and institutions are no longer competent to secure the public interest. The regulatory and institutional challenge is to devise a doctrine and institutional structure which combines the positive, and necessary, elements of the competition paradigm with preservation of the socially beneficial consequences of market failure. The unfortunate course of events associated with the licensing of DTT in the UK suggests that there is, as yet, neither the doctrine nor the institutional arrangements required if regulation is to secure the public interest in media and communication in a converged digital environment.

Acknowledgements This chapter was first published as ‘Back to the future: Digital television and convergence in the united kingdom’ in Telecommunications Policy. 1998 V 22 N 4/5. pp. 383–96. May/June. An early version was presented to the 1997 annual colloquium of the Italian Alumni of the LSE at the Villa Wolkonsky, Rome.

References 1 The UK Government Agency charged with responsibility for spectrum policy, the Radiocommunications Agency, estimated radio communications’ contribution in 1995/6 to ‘efficiency, competitive gains and other user benefits’ at £12–15bn whereas in 1993/4 such gains were estimated at £7–11bn (Radiocommunications Agency 1997 pp. 2–3). 2 Notably the Office of Telecommunications (OFTEL), the Independent Television Commission (ITC), the Radio Authority, the Broadcasting Standards Commission (BSC), the Welsh Fourth Channel Authority, the Governors of the BBC, the British Board of Film Classification (BBFC), the Advertising Standards Authority (ASA), the Press Complaints Commission (PCC) and the Independent Committee for the Supervision of Standards of Telephone Information Services (ICSTIS). 3 See, inter alia, Consumers’ Association 1997, Collins and Murroni 1996 (especially pp. 158–181 and pp. 199–212), Collins 1996. 4 The Director of MIT’s Media Lab, Nicholas Negroponte (1995), has argued that traditional spectrum hungry radio frequency users like television will move to wired delivery and historically wired systems, such as telephony, will move to wireless transmission thus using spectrum more efficiently. 5 The 1996 Broadcasting Act (Section 8(1)) specifically charged the ITC with considering how a licensee would ‘promote the development of digital broadcasting in the UK otherwise than by satellite.’ Clearly, the Government placed a high priority on ensuring that a variety of transmission paths and distribution technologies would be employed for UK digital television. Wired distribution technologies in the UK have been slow to develop. Video on Demand via ADSL/xDSL technologies had not, at the time of writing (Summer, 1997), progressed beyond field trials. Latterly, British Telecom has introduced commercial ADSL services, in some areas of the UK. Broadband cable franchises are not fully built out and penetration of homes passed remains low.

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Media and Identity in Contemporary Europe Indeed, the Radiocommunications Agency comments that ‘radio based services often offer a rapid means of entering the market, particularly at the local level, at a lower market cost than that associated with cable’ (Radiocommunications Agency, 1994 p. 28). 6 In digital transmission, unlike analogue, different types of television programme take up different, and varying, amounts of bandwidth (or channel capacity). For example, sports programmes showing continuing movement require greater bandwidth than do relatively static programmes such as a talk show. The ITC estimated that each multiplex had the capacity to carry three to six channels. 7 However, the ITC’s decision may not stick. The European Union Competition Authority, DG IV, initiated an investigation on the BDB licence by announcing a twenty day period of public consultation from 26.9.1997. DG IV acted in response to a complaint from DTN but its action is in keeping with its record of concern about possible foreclosure of competition through long term programme supply contracts. The ITC’s requirement that BSkyB contract to supply BDB with programmes (resulting in a seven year contract) seems likely to have aroused DG IV’s concern. 8 Though much of the strength of terrestrial broadcasters is accounted for by public service broadcasting. The commercial terrestrial television channels, Channel 3 and Channel 5,have either lost share, Channel 3, or have succeeded in capturing only a derisory share: Channel 5 was launched in March 1997 and in August 1997 had succeeded in attaining a viewing share of 0.7%. 9 See also the Peacock Report, properly known as the Report of the Committee on Financing the BBC, especially Chapters 4 and 12 (Peacock, 1986). 10 This is not to make a judgement on the desirability or otherwise of the weakening of governmental power in media and communications markets. Moreover, promotion of entry has been a clear government priority since Mercury, the first competitor to BT, was licensed under the Telecommunications Act 1981. 11 Asynchronous Digital Subscriber Line – a technique for transmitting compressed digital signals, including video, over a standard twisted copper pair of telephone cables. 12 The projected British Interactive Broadcasting (BIB) service is to be launched by a consortium of BSkyB (32.5%), BT (32.5%), HSBC-Midland Bank (20%) and Matsushita (15%). it will provide a broadband broadcast downlink via satellite combined with a wired narrow band return path to a variety of interactive multimedia and video services. 13 The principal UK operator of wired telecommunication services, British Telecom, is prohibited from offering broadcast television services before 2001 as a form of entry assistance to cable companies so as to promote network infrastructure competition – particularly in voice telephony. 14 For the purposes of this paper I do not consider cable as a provider of voice telephony and other telecommunication services. 15 The same report cites a British Telecom source, Rupert Gavin, as estimating a global Internet user total of 40m. 16 Microsoft acquired an 11.5% share for $1bn. 17 Public Telecommunications Operator. 18 See also Cowie 1997. 19 In respect of premium programme content through its contracts with leading sports rights holders and film producers and distributors. 20 Article 3 (2) b of the Telecommunications Act 1984 requires the Secretary of State (the Government Minister responsible) and the Director General of Telecommunications to ‘maintain and promote effective competition between persons engaged in commercial activities connected with telecommunications in the United Kingdom.’

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Back to the Future – Digital Television and Convergence in the United Kingdom 21 The Act provides, Part I 4 (1), that telecommunication system means a ‘system for the conveyance, through the agency of electric, magnetic, electro-magnetic, electro-chemical or electro-mechanical energy, of: (a) speech, music or other sounds; (b) visual images; (c) signals serving for the imparting (whether as between persons and persons, things and things or persons and things) of any matter otherwise than in the form of sounds or visual images; or (d) signals serving for the actuation or control of machinery or apparatus. 22 Derived from ABC UK newspaper circulation statistics for August 1997. 23 The anti-trust actions usually known as the Paramount case began in 1938. The US Justice Department filed a petition against the Hollywood majors (Big Five – Loew’s/MGM, Paramount, RKO, Twentieth Century Fox, Warners and Little Three – Columbia, United Artists, Universal), charging violations of Sherman Anti-Trust Act – anti-competitive practices, discriminatory pricing and supply arrangements etc. The eight defendants had vertically integrated businesses linking film production to distribution and exhibition. The Justice Department sought to abolish ‘all monopolistic practices in the motion picture industry.’ It secured a consent decree in 1940 which maintained vertical integration in exchange for minor concessions on new trading/working practices. The case was reactivated in 1944 and in 1948/9 leading to a new consent decree under which the studios sold theatres.

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Media and Identity in Contemporary Europe Consequences of Global Convergence Has international media impacted upon the legitimacy of national communities and ideologies in Europe? Richard Collins gives an integrated analysis of the central issues in contemporary media policy. Because technological change in broadcasting has enabled us to open up media markets, the shape of media and society has become increasingly global. Indeed, modern international media questions the very legitimacy of national communities and ideologies. And this is a phenomenon whose greatest impact has been in Europe. These studies address the future of public service broadcasting and the power of national regulators to shape trans-national media relationships. The author takes an empirical approach to analyse these issues, exploring media and communication studies very much as a social science. The chapters focus on technological change and its impact upon cultural and political identities, and globalisation to include: • the change in technological communications – leading to loss of entry to national media markets, • the impact upon cultural and political identities through the media – especially TV, • the role of the cultural industries in the ‘New Economy’, and • the effect of European integration upon national institutions – like public service broadcasting. “A pioneering and immensely valuable work...rich and detailed exploration of key issues of globalisation and media convergence.” Dr Alasdair King (University of Portsmouth)

Author Richard Collins is Professor of Media Studies at the Open University

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