The European broadcasting landscape has seen unprecedented change in recent years. With more competition than ever in television markets and new customer behavior altering the way content is distributed and consumed, developing niches such as mobile TV are becoming a more important part of the broadcast equation and present a new set of regulatory issues.

One of the most influential people in Europe in determining broadcast and media regulation is Viviane Reding, commissioner for information society and media. Reding spoke with Via Satellite Associate Editor Mark Holmes about what the European Commission can do to ensure that Europe’s citizens have access to the latest media services.

VIA SATELLITE: What is the significance of the decision to institute pan-European licensing for mobile satellite services?

REDING: Given that the European space industry holds 40 percent of world markets for manufacturing, launching and operating satellites, clearly the potential of the European satellite market is huge, and there is a lot to gain for satellite system operators. But until now investments by these operators have often been discouraged as a result of the 27 different national selection procedures in place. Therefore, to simplify things, create economies of scale and increase transparency and legal certainty, the European Commission, with the help of the European Parliament and the Council, adopted a single European procedure for selecting operators of mobile satellite services. This new one-stop-shop-procedure will not only cut red tape and save a lot of time, but it will also enable an operator from the United Kingdom or France to compete on the same basis with a satellite operator from Sweden or Luxembourg because the selection criteria used are the same now no matter in which EU (European Union) country operators would like to offer their services. Establishing a common selection procedure for 27 sovereign nations is an innovation for the satellite world and acknowledges the fact that, by their very nature, satellite communication systems do not know any borders and should in fact cover the largest possible part of our EU territory.

VIA SATELLITE: Do you believe you have created a level playing field for satellite operators?

REDING: The new EU decision will give industry long-term legal certainty to operate throughout the single market. Until now, in spite of the clear cross-border dimension of satellite services, existing national rules obstructed the creation of a single market for mobile satellite services by leaving the selection of operators to each member state based on different sets of criteria. The result was a patchwork of procedures, legal uncertainty and a substantial competitive disadvantage for the satellite industry in Europe. Having now the same criteria for all operators who would like to offer their services in Europe clearly creates a level playing field and will enhance competition. Only the best with the most attractive service package will succeed.

VIA SATELLITE: Does the failure of a mobile satellite service in Japan offer a warning for players in Europe?

REDING: Mobile broadcasting is an important innovative service, but it is just one of many potential ways for exploiting a mobile satellite system. One should also note that there are important differences between the European and Japanese competitive environments. For instance, approximately 84 percent of Japanese mobile subscriptions are for 3G mobile services, which give access to viable mobile broadcasting solutions, whereas the level of 3G subscriptions in Europe is only approximately 11 percent. Another important factor is that Japan is much more densely populated than an average European country, which makes the business case for terrestrial infrastructures much stronger. The main lesson would be an obvious necessity for the candidate mobile satellite services operators to weigh carefully the different factors affecting their business prospects across Europe, about which we remain optimistic.

VIA SATELLITE: Why was a pan-European licensing structure not implemented sooner?

REDING: Carefully preparing such decisions takes time, especially when they are of a complex nature concerning the use of spectrum and touching often sensitive questions of national sovereignty and competencies. In order to be able to organize a single selection and authorization process of operators for all member states at European level, we first need to assign the same spectrum to operators in each member state so that they can provide their satellite services at a pan-European level.

Next, to prepare the mobile satellite services decision in a public consultation lasting from 30 March to 30 May 2007, we sought the advice of relevant experts and the wider public. Following all the responses received, the Commission then needs to coordinate its proposals with the 27 member states, who all have to give their opinions before the decision can be taken. Given that the proposal for the selection procedure had then to pass through the European Parliament and the Council, we had an impressive run and the decision was adopted in only 10 months.

So all the time-consuming preparatory coordination work was worth it. We can say that today, there is one market, not 27, in Europe for mobile satellite services. I hope that next time when we want to create economies of scale for a specific cross-border communication service, we will be able to benefit from the experience made with the mobile satellite decision and arrive at such a good result in only half the time.

VIA SATELLITE: Do you feel all the necessary regulation are in place satellite players to play a role in this market?

REDING: Yes, as I described above, a single market — not 27 — now exists for these services. Henceforth, the ball is in the camp of the industry, and I expect intense competition among operators offering satellite-based communication services. Depending on the number of candidates, the Commission expects that the selection procedure can be completed in the first months of 2009. First satellite launches could take place already in 2009, but the deadline for the deployment of commercial services is 2011 at the latest. This said, we have no specific plans for regulating satellite TV, technological neutrality being our preferred approach.

VIA SATELLITE: Do hybrid delivery infrastructures present any unique regulatory challenges?

REDING: Combining different networks to deliver a homogeneous service which covers a large geographic area perfectly reflects the cost dynamics and rollout patterns of the underlying broadcast network infrastructures. Each time new players enter into the telecoms arena competition is increased and so is consumer choice. Creative combinations of different infrastructures pose no problem from the perspective of content regulation.

What one does have to take into account, however, is technology neutrality — this being one of the backbones of the EU’s new Audiovisual Media Services Directive and of our regulator framework for the telecoms sector. Generally speaking, the models which are being developed have the potential to benefit European citizens.

Whether and which individual offers succeed or fail will be a market decision.

VIA SATELLITE: Do you see satellite technology playing a role in reducing the digital divide in Europe?

REDING: Mobile satellite services have the tremendous advantage of being able to cover most of the EU’s territory, thereby reaching millions of EU citizens across borders. A lot of remote rural areas will have access to high-speed Internet and other services that they previously could not access via ground-based networks. Opening areas up to services that were once considered too expensive to reach should energize local economies and could indeed help to close the digital divide. As such, they represent an unprecedented opportunity for all Europeans to access new communication services. That is also why geographical coverage and the range of services to consumers in rural or remote areas are among the criteria that will be assessed in the selection process. It is obviously in the operator’s interest to reach as many potential customers as possible by serving an area as wide as possible.

VIA SATELLITE: As the way content is consumed becomes more fragmented, is regulating the market more difficult?
REDING: I see a huge potential for new services such as IP, mobile and high-definition media. At the same time there is great confidence of viewers in TV, radio and other established media as they know them. These two trends are not contradictory but will come together and allow market players to contribute to growth and employment in the media industry. There is also a challenge for content providers to maintain their revenues as mass audiences become more and more fragmented. While they need to experiment with imaginative offers on new platforms, they also need to make sure that they keep offering high-quality content.

VIA SATELLITE: Do you feel you have the foundations in place to create a strong media and information society in Europe?

REDING: We still need to make substantial progress with the reform of the EU telecoms, in place since 2002 and proposed for a review by the European Commission at the end of 2007. We are living in a world where communication technologies unite people across borders and where we need to deal more effectively with regulatory issues on a European level. We need quick and effective decisions in the name of competition and consumers.

Of course in the United States, where you have only one telecoms authority — the Federal Telecommunications Commission — decisions will be taken much quicker than in the EU, where we work according to a 27-plus-1 model. We have 27 national regulators plus the loose European Regulators Group, which is for the time being not at its best in terms of efficiency as it is bound by the consensus rule and, therefore, often only is able to arrive at slow, lowest common denominator decisions. This is not good news for European telecoms companies, which suffer as a result of this system under substantially higher regulatory costs and long procedures and therefore lose competitiveness vis-à-vis U.S. and Asian companies. What we therefore need in Europe is to end regulatory fragmentation where we do not need 27 or 28 set of rules any more, but only one. We need a one-stop-shop for European companies that want to invest into telecoms and build new networks.

The recent EU decision on mobile satellite services will certainly serve as a useful precedent for the EU telecoms reform. I see a lot of agreement both in the EU Council of the 27 Telecoms Ministers and in the European Parliament — which has an equal say with ministers on the matter — with my objective of creating a single telecoms market in Europe without regulatory borders for businesses and consumers, thereby paving the way for a level playing field for telecoms companies with cross-border activities and an open, innovative and borderless telecoms market for Europe’s 500 million consumers. The European Parliament, which always has the citizens’ interests in mind, has even come forward with an own proposal for a European telecoms authority called BERT (Body of European Regulators for Telecommunications). At the end of this reform process, I expect Europe as a whole to be stronger and more efficient as regards telecommunications and new high-speed Internet services.

VIA SATELLITE: Is there a growing appreciation within the European Commission on the role satellite technology can play on the media and communications landscape?

REDING: Satellites and satellite technology in today’s world are rocketing upwards. While the satellite industry is a 77 billion euro ($112 billion) market worldwide, it has been growing at 16 percent in 2007. Of this, satellite services alone generated approximately 38 billion euros ($55.3 billion) in global revenue. Mobile satellite services will change the future landscape of media and communications, as the potential of such systems is huge. They will allow us to experience services we did not know before: using a high-speed internet connection to watch TV or listen to the radio via your mobile phone or even to guarantee communication services in case the telecommunications infrastructure has broken down as a result of a natural disaster. Satellite communications are an integral and essential part of the new global information highway, and they will substantially improve high-speed communication throughout the entire EU.