Viewers in the UK can now benefit from a range of multi-channel pay TV services offered by providers of satellite television, cable television and video-on-demand (VOD) services. Up-to-date information on the numbers of subscribers to different multi-channel services can be obtained from the ITC website. Each of the channels comprised within multi-channel services are licensed, and are subject to the same programme and advertising standards as apply to terrestrial television (e.g. ITV, Channel 4 and Channel 5). However, no channel requires more than one licence. Thus, a channel licensed for satellite broadcasting does not require a separate licence for cable broadcasting (and vice versa).
In addition, separate licences are required by cable operators (a Local Delivery Service licence), conditional access providers (which enable broadcasters to scramble their signals so that unauthorised persons cannot receive them), and electronic programme providers (which enable subscribers to access particular channels directly from the guide). Details are given below.
Satellite Television
Satellite services established in the UK require a Satellite Television Services (STS) licence (regardless of whether the services are aimed at the UK or other countries). An STS licence is required not only for a television channel available direct to viewers with satellite dishes but for one intended only for distribution on cable networks where a satellite is used for the delivery to cable head-ends. STS licensees may charge a subscription for their services or to allow them to be broadcast ‘free-to-air’. Many broadcasters serving markets in Europe and the Middle East have chosen to be licensed in the UK.
Cable Television and Video-on-Demand
A Licensable Programme Service licence (LPS) is required for a television programme or video-on-demand service provided in the UK for distribution over cable or telecommunications systems, without using satellite transmission. It also covers large screen television presentations, such as football matches relayed to the away club’s home ground.
Common licensing provisions
The Broadcasting Acts permit the ITC to refuse a licence only where a proposed service would breach certain statutory programme rules, where the applicant does not meet the ownership requirements set out in the legislation, or is not a “fit and proper” person under the terms of the Act. Local Authorities, political bodies and advertising agencies are disqualified from controlling or owning STS licences. There is no restriction on newspaper groups holding STS licences. Specific guidelines are available from the ITC on the holding of STS licences by religious groups. All licensees must comply with the ITC codes on programme standards, and on advertising and sponsorship, which transpose relevant EC legislation as well as UK standards.
The ITC licences, for a 10-year period, are issued on demand for any service which complies with the ‘consumer protection’ requirements in the Broadcasting Act 1990. The ITC’s powers to impose sanctions for failure to comply with its licence conditions include a direction to broadcast a correction or apology (or both); a direction not to repeat a programme; imposition of a fine of up to £50,000 or up to three per cent of ‘qualifying revenue’ and in the case of a second or subsequent offence, up to five per cent, whichever is the greater; and shortening or revocation of the licence for non-compliance.
In September 1995 the ITC imposed a fine totalling £60,000 on MTV Europe for three breaches of the ITC programme and advertising codes, and in 1998, fines totalling £90,000 on Med TV for breaches of the programme code. In April 1999 the ITC announced that it would be revoking Med TV’s licence due to broadcasts which were considered “likely to encourage or incite to crime or lead to disorder”.
Local Delivery Services (LDS)
A Local Delivery Service Licence (LDS) is required for the use of a telecommunication system for the purpose of delivering television services to two or more homes, licensable only if more than 1,000 homes can be served. Every local delivery operator needs two different licences, one under the Telecommunications Act 1984 for the system itself which is issued by the Department of Trade and Industry (DTI) and regulated by OFTEL; and a second under the Broadcasting Act 1990 for the provision of the local delivery service over the system.
As of 1 January 2001 all franchises became non-exclusive and LDS licences are now issued for all areas of the United Kingdom to any applicants who pass the statutory tests in Section 75 of the Broadcasting Act 1990. A local delivery licence runs for 15 years and is renewable. If a local delivery licensee fails to comply with its licence conditions the ITC may impose fines of up to 3% of qualifying revenue or, for a second breach, up to 5% of qualifying revenue. There is also power to revoke the licence. Prohibited classes for local delivery licences include local authorities, advertising agencies, religious and political bodies. The Communications Act abolishes the requirement for LDS licences from the Television Transfer Date.
Conditional access services
Conditional access services enable reception of unscrambled programme services to be restricted to those authorised to receive them, and comprise two processes – encryption, and subscriber management. Encryption prevents those who have not paid subscriptions from viewing the programme services, and so protects subscription revenue. It also allows programme service providers to protect the copyright of content licensed for particular geographical markets (e.g. the United Kingdom). A subscriber management system handles subscriber requests for access to particular services, bills and payments and passes to the encryption system information on which customers should be allowed access to which services. This then creates messages which are transmitted to the customer’s receiver authorising access to these services.
The EC Advanced Television Standards Directive (95/47/EC) requires, amongst other things, that conditional access services should be available to broadcasters on a fair, reasonable and non-discriminatory basis. Licences are issued by the DTI, and Oftel has strict powers of enforcement: both are advised on the exercise of these functions by the ITC.
Electronic Programme Guides
Electronic programme guides (EPGs) are provided by all channel packagers (Sky, Telewest and NTL) and enable viewers to go directly to the channel of their choice. The ITC recognises the potential for EPG providers to confer an unfair advantage on selected programme services by the way in which they are displayed. In order to prevent this the ITC issued a Code of Conduct on Electronic Programme Guides in June 1997, giving guidance on how the ITC will apply its competition powers in this area. The code also requires EPGs to give ‘due prominence’ to public service channels (BBC channels, ITV 1, Channel 4 and Channel 5). Oftel regulates the arrangements under which programme service providers contract with the EPG provider to ensure that these are done on a fair, reasonable and non-discriminatory basis.
Communications Bill
The Government has introduced legislation to Parliament that would, amongst other things, abolish Local Delivery Service licences, and replace STS and LPS licences with a single Television Licensable Content Services licence (TLCS). Providers of VOD services would no longer require a licence, although associated multi-channel services would require TLCS licences.
ITC Publications
ITC Notes 2-38 cover all aspects of the ITC’s functions and activities.
June 2003
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