Friday 2 March 2018

Dispute over the Distribution of FTA Channels in France

                                                                       Because I'm Worth It!

France has, for the last few months, been the scene of a fierce commercial battle between free-to-air channels and television distributors (satellite, cable and IPTV operators).  Historically, such FTA channels did not receive any remuneration or fees from the distributors for the right to carry, distribute and market these channels to subscribers (unlike other jurisdictions such as the United States with its so-called re-transmission consent fees).

Recently, French FTA channels (and in particular TF1, the leading private broadcaster) have adopted new bargaining stances:  fees must be paid by distributors for the right to carry and dsitribute FTA channels. 

While it would appear (based on press reports of agreements reached with certain distributors) that TF1 is not averse to dressing up the agreement so that a large chunk of the fees is allocated to so-called enhanced services (extended ctach-up, start-over or other functionalities), the fact remains that in essence the distributor is paying for the right to distribute a FTA channel.                                                   


From a strictly legal perspective, the broadcaster's right to seek such payment stems from Section L.216-1 of the Intellectual Property Code (IPC) which provides that audio-visual communcation entities (i.e. broadcasters) have the following rights with regard to their programmes: 

- reproduction
- making available to the public via sale, rental or exchange,
- broadcasting ("télédiffusion"), and
- communication to the public in a place accessible thereto against payment.

(Contrary to what is sometimes said about the making availble right under Section L.216-1 IPC, this does not correspond to the making available right under the EU InfoSoc Directive; rather, it was intended to cover the distribution (sale or rental) of tangible goods incorporating the programmes.)

As regards broadcasting, this is defined in Section L.122-2 IPC as the dissemination by any means of telecommunication of sounds, images, documents, data and messages of any kind whatsoever. 

In light of this definition, the broadcasting right under Section L.216-1 IPC is extremely broad indeed.  It covers any form of telecommunication by which the original signal (carrying the programmes) is re-transmitted (whether by wireline, wireless, internet or any combination thereof).

It certainly applies to the case of a distributor who seeks the right to distribute and market a channel to its susbscriber base (given that in such case there are clearly acts of reproduction and rebroadcasting).

Naturally, the fact that such an IP right exists does not necessarily mean that TF1 is entitled to payment.  After all, nowhere does the law say that a broadcaster must be paid for the right to re-broadcast the sigal (programmes); its consent can be given free of charge (or for non-monetary consideration).  Moreover, as reported by the press, the distributors appear to be marshaling arguments from other areas of the law (in particular competition law, claiming that TF1 is abusing its market power by demanding payment).

Press articles on the dispute:

here and here and here

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