News from DG Disinformation Society: maladministration revisited

Posted on June 27, 2008 | Filed Under communication technologies

Commissioner Reding likes to stress the “need for transparency” (in media pluralism), supports the aim “to ensure greater transparency“ (for roaming charges), worked on “issues of transparency” (in education and training), takes “measures to enhance transparency” (again: for roaming charges), and she even wants to “ensure the transparency” of the exchange of views between Commission and European Regulators Group (ERG). Maybe she should also check the performance of her Directorate General for Information Society: she could find a perfect case where increased transparency would be necessary.

I have already reported on a previous case where the EU Ombudsman found there was maladministration in DG Information Society. Now the Ombudsman closed another case, related to the first one, and again had to come to the conclusion that the Commission’s relevant behaviour “involves maladministration”.

It is a striking example of how not to deal with a request for access to a document: claiming that the document does not exist is a rather stupid action when the document had been e-mailed to at least dozens of people. When confronted with the document, obtained from other sources, the Commission said it had “believed bona fide” that there had been no such document, then “tried to retrieve the document from the place where such documents are usually saved” and “did not consult the CIRCA website” (where such documents are definitely always saved). 

“The Ombudsman notes that an institution’s factual statement that a document does not exist carries with it a (refutable) presumption of truthfulness. This presumption applies with respect to all those actors who may be involved in the context of applications for access to documents, be they citizens or other Community institutions. With regard to the Ombudsman specifically, the presumption of truthfulness is, first of all, based on the high level of trust that exists between all institutions and the Ombudsman with respect to the application of Regulation 1049/2001. … At the same time, the presumption of truthfulness implies a particularly strict duty of care to ensure the accuracy of statements regarding the non-existence of a document.”

Not surprisingly, the Ombudsman was not convinced that the Commission had complied with the duty of diligence in this case. And as to the “(refutable) presumption of truthfulness”. I may quote Shakespeare again: “That is too much presumption on thy part” (King Henry VI, part 2, Act V Scene 1)

PS: The Ombudsman also stated that “it would have been appropriate of the Commission to issue an apology to the complainant. The Commission has chosen not to do so”. I have to disclose that I was the complainant - but dear Commission, I do not need an apology, just more transparency (and, not to forget, truthfulness).

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“an assessment, tinged with subjectivity”: CFI on state aid and public service broadcasting

Posted on June 26, 2008 | Filed Under competition/mergers/state aid, public services

There is a lot going on in Public Service Broadcasting these days: in France, the “Copé Commission” delivered its final report (which prompted a speech by President Sarkozy, going even beyond the proposals in the report, with a view to abolish advertising on PSB from 8 o’clock p.m. to 6 o’clock a.m. by January next year and completely by 2012), in the UK, the second PSB review is in progress (leading, amongst other things, to official blogging by Ofcom, and to a series of Pro-BBC-lectures), and Germany is finally trying to implement the commitments give in the state aid case that was decided in April 2007. This is not to mention a range of developments in smaller EU member states (as for instance the current state aid case concerning the financing of the Austrian public service broadcaster), and of course the European Commission’s own consultation on reforming the state aid rules applied to Public Service Broadcasting.

And today (some 15 years after the first complaint in this matter had been filed with the Commission) the Court of First Instance of the European Communities delivered a long awaited judgment in the case T-442/03 SIC v. Commission that addresses a few key issues on state aid to public service broadcasters. What are the main points?

  • There is no requirement to the effect that member states must follow a competitive tendering procedure for the award of the SGEI (service of general economic interest, such as public service broadcasting)
  • “Community law in no way precludes a Member State from defining broadcasting SGEIs widely to include the broadcasting of full‑spectrum programming. That possibility cannot be called into question by the fact that the public service broadcaster carries on, in addition, commercial activities, in particular the sale of advertising space. … It follows from all of the foregoing considerations that the power of the Member States to define broadcasting SGEIs in such a way as to include broadcasting a wide range of programming, whilst authorising the operator in charge of that SGEI to carry on commercial activities, such as the sale of advertising space, cannot be disputed.”
  • As regards the monitoring of the public service broadcaster’s compliance with its public service remit, there are two aspects: “In the first part, it is necessary to examine the monitoring of RTP’s compliance with the qualitative criteria … . In the second part, it is necessary to examine the monitoring of the actual provision by RTP of the public services expected of it and the correspondence between those services and the costs declared.”
  • The first part of the analysis “relates to an assessment, tinged with subjectivity, of the qualitative level of public service television” - and this is up to the member state.
  • The second part, concerning “the objective question of the administrative and accounting fairness” of the PSB’s  accounts in relation to the cost items, is a task for the Commission - and the Commission did not fulfill this task properly as it relied on accounts without external verification by auditors. 

So the CFI annulled the greater part of the Commission’s decision. But even if SIC, the private Portuguese broadcaster that had intiated the proceedings, achieved annulment of much of the Commission’s decision, the judgment does not seem a major setback for PSB. Rather on the contrary: the CFI explicitedly referred to the Amsterdam Protocol on the system of public service broadcasting and the Resolution of the Council and the Representatives of the Member States concerning public service broadcasting and stressed the role of member states in defining the public service remit and in controlling the qualitative criteria. Only when it comes to accounting, the creativity of member states is severely restricted.

There is, however, one message in the judgment that sounds like a warning to public service broadcasters: “there is”, it states,  

“no reason for a widely defined broadcasting SGEI which sacrifices compliance with those qualitative requirements in order to adopt the conduct of a commercial operator, by broadcasting programming specifically designed to generate optimal audiences for advertisers, to continue to be financed by the State on the same conditions as if those qualitative requirements were complied with.”

PS: in another state aid/broacasting case (C-333/07 Régie Networks, not yet available in English), brought to the ECJ via a preliminary reference, the advocate general today delivered her opinion - also pleading for annulment (basically because the Commission had not examined all relevant issues).

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copyright term extension for sound recordings - a very bad idea?

Posted on June 23, 2008 | Filed Under copyright

tonearm.jpgAccording to Commissioner Charlie Mc Creevy the proposal for a directive extending the term of copyright for sound recordings from 50 to 95 years (see our post on “the poor cousins of the music industry” ) is about to be adopted before the forthcoming summer break (see the press release here). Now a group of european experts on intellectual property law (under the lead of the Centre for Intellectual Property Policy & Management at UK’s Bournemouth University) have in a letter to the Commission’s President José Manuel Barroso raised their voice in protest, declaring the directive

“a spectacular kowtow to one single special interest group: the multinational recording industry, hiding behind the rethoric of “aging artists”

But it is not without good reason they ask “… how locking up recorded music for another 45 years could possibly benefit a creative and innovative society?” Allegedly the proposed directive ignores recent independent reviews on the issue - one even commissioned by the EC itself - and takes a view contrary to the 2004 Commission Staff Working Paper on the review of the EC legal framework in the field of copyright and related rights which had pointed out that

it is feared that an extended term of protection would only tend to diminish the choice of music on the market by enforcing the flow of revenues from few best-selling recordings, while at the same time not providing any real new incentives for creation of new recordings or motivating new investment.

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ECJ on universal service designation: a regulator’s, not a legislator’s choice

Posted on June 19, 2008 | Filed Under communication technologies

The European Court of Justice has issued a judgment today in the Case C-220/07 Commission v. France (so far only available in French), concerning the designation of the universal service provider. France had laid down in its Act on Post and Electronic Communications that only an operator accepting to provide the universal service in the whole territory of France could be designated by the regulatory authority.

The Court found this to be incompatible with articles 8, second paragraph, 12 and 13 and annex IV of the Universal Service Directive 2002/22/EC, as it excludes operators that are not willing or able to fulfill the universal service obligation within the whole territory of France. This constitutes a breach of the principle of non-discrimination as it is stipulated in article, 8 second paragraph, of the directive. It also limits the choice of the regulatory authority in designating universal service providers and thus might prevent the regulator from choosing the most efficient solution for parts of the territory. This in turn would lead to higher universal service costs.

The Court points out twice that its judgment does not concern the decision of the regulator to designate just one universal service operator for the whole territory. To me this seems to imply that the Court is fully aware that even when the law allows for regional operators to be designated, it is very likely the regulator will again choose a national operator. But this does not justify the legislator to prevent the regulator from fully assessing which operators - national or regional - best meet the criteria to be designated.

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ECHR on denial of broadcasting licence: just “no” is not enough

Posted on June 18, 2008 | Filed Under fundamental rights

_jauerling.jpgJulius Caesar (in Shakespeare’s play), when pressed by Decius Brutus to “let me know some cause”, was in a position to say: “The cause is in my will … that is enough to satisfy the senate”. But times have changed, and nowadays a broadcasting regulator should give some more reasons on why a licence is denied to an applicant. However, when reading the judgment by the European Court of Human Rights in the Case of Meltex v. Armenia, Appl. no. 32283/04, handed down on 17 June 2008, I couldn’t help but think of Caesar’s words. In presenting the circumstances of the case, the ECHR reports of five instances (if I counted correctly), where the applicant company lost in tenders for broadcasting frequencies, receiving the information that it “was not selected as the best organisation in the call for tenders” - no further reasons. Even in judicial review it did not get further, with the courts stating that there was no need for further reasons: “there can be no uncertainty for the other participants in the tender process as to whether their bid has or has not been refused, since they are told who the winner is and, consequently, that they have not won.” What else would you want to know?!

The applicant company had been active in broadcasting for some time in Armenia before, and it obviously had a professional track record, so there is some lingering suspicion that the denial of a licence might have had political reasons. The Court reports that the applicant company had refused to broadcast only pro-Government material and it had been informed that “the broadcast frequencies were granted by the State in order to defend and further State interests rather than criticise State authorities.”

The judgment of the ECHR does not need to go into these questions of a possible political background: the mere fact that there were no reasons given for the denial of the licence constitutes a violation of Article 10 of the Convention:

“The Court considers that a licensing procedure whereby the licensing authority gives no reasons for its decisions does not provide adequate protection against arbitrary interferences by a public authority with the fundamental right to freedom of expression.”

This echoes the judgment of 11 October 2007 in the Case of Glas Nadezhda EOOD and Elenkov v. Bulgaria, appl. no. 14134/02. In both cases the Court makes an explicit reference to the Recommendation Rec(2000)23 on the independence and functions of regulatory authorities, in the Case of Meltex v. Armenia also to the recent Committee of Ministers declaration on the independence and function of regulatory authorities of 26 March 2008.

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Cell-phone users “no human subjects”?

Posted on June 15, 2008 | Filed Under communication technologies

_mobilfunkantennen2.jpg The ethics of research can be difficult: in most countries, research involving humans requires some sort of ethical review. In the US, Institutional Review Boards (IRBs) require investigators to justify their human research to peers prior to recruiting participants. But does research on data capturing “the location of 206 mobile phone users, recorded every two hours for an entire week”, or using the complete set of traffic and location data of 100,000 mobile phone-users “involve human subjects”?

No, at least not if the cell-phone users are not identified, according to the IRB at the U.S. Office of Naval Research. This “science and technology provider for the Department of the Navy” provided funding for research into mobility patterns, making use of data provided by a mobile operator form an “unidentified European country”. The research was done by Albert-László Barabási and his team at Northeastern University, and the main results were recently published in nature (see also this website with further information). Some of the results do not seem really breathtaking to me (basically, people are likely to repeatedly return to a few places like home or work), but the researchers do claim they can provide “the probability of finding a user in a given position in the user’s intrinsic reference frame”. This may well be important for epidemic prevention, emergency response, or urban planning, as the authors point out, but it is not difficult to see the privacy concerns.

It is particularly interesting that the data set the researchers worked with came from Europe, where (at least within the European Union) the “E-Privacy directive” limits the storage of traffic data to that required for billing purposes only, and even the data retention directive does not allow for sharing traffic data with anyone except “the competent national authorities in specific cases”.

So where did the data come from? A German privacy watchdog suspects Ireland or Italy, as these two countries have for some time allowed/mandated retention of traffic data (however, it is far from certain that providers in countries where retention was illegal would not have retained traffic data anyway). But the researchers also stated that the 100,000 records were taken as a sample of a set of 6 million cell-phone users, so it must be an operator with at least this number of customers; and also the distance between towers, as it appears in the supplemental info, was up to 1,000 km, so I guess Ireland would not qualify on that count either.

The research has been criticized for lack of research ethics (see this discussion in nature news), and the University has come out strongly in support of its staff. And while I would probably concur that using anonymized traffic data would not make it a research project involving humans, the statement of the university is in contradiction with the research itself. The university states: “The study relied on a sample from anonymized, aggregate billing data from cell-phone users in an unidentified European country.” Compare that to the research paper claiming inter alia to have looked at “a data set that captured the location of 206 mobile phone users, recorded every two hours for an entire week” - that’s not exactly what I would call “aggregate billing data”. - If you are interested, Professor Barabási will address some of the challenges one faces when trying to explore the datasets of communications companies at the NetSci conference in Norwich, UK, on 27 June 2008.

PS: A plain English version of the results comes from the New York Times: “News flash: we’re boring.”

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“advice, … both grave and prosperous, in this day’s council”*: Telecoms

Posted on June 12, 2008 | Filed Under communication technologies

slow progress Today’s Telecommunications Council held “a public exchange of views on the review of the EU regulatory framework and took note of the presidency’s three progress reports on the work carried out so far in its preparatory bodies” (press release by the Council). In addition, the Council adopted Conclusions on the i2010 – Mid-term review (for this review see previous post), which are not very substantial, as the Council welcomes, recalls, underlines, acknowledges all the good things and invites everyone to get even better, and it also adopted Conclusions on the digital dividend-communication, which are more interesting, as they do show that the Council is not fully content with the direction of the Commission’s efforts. For example, the Council “underlines … the genuine right of Member States to determine the amount of spectrum from the digital dividend to be used for the achievement of general interest objectives in conformity with Community law, including broadcasting services” and it even “invites the Commission … to recognise previous advice by both the RSPG and CEPT”. In the world of diplomatic language, that is rather strong wording, as it implies (correctly) that the Commission has so far pretty much ignored RSPG and CEPT opinions.

On the reform of the regulatory framework, progress has been varied:

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“Don’t expect a revolution here” - Revising the Broadcasting Communication

Posted on June 11, 2008 | Filed Under competition/mergers/state aid, digital content, public services

Already announced in its 2005 state aid action plan the European Commission is reviewing the 2001 Communication on the application of State aid rules to public service broadcasting. In January 2008 it opened a corresponding public consultation of which the results now have been published. According to Commissioner Kroes:

“… more than 120 entities made contributions. They ranged from independent producers through to the biggest broadcasters and publishers, and 16 Member States.”

Whereas public broadcasters naturally opted against a review, private broadcasters and newspaper publishers as well as consumer associations seem to be in favour of a more or less comprehensive update. All kinds of media companies join the private broadcasters’ complaint about the public broadcasters’ unrestrained use of public money on platforms like the Internet which allegedly cleans out private initiatives on the internet and distortes the competition (a summary of the contributions is available here).
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“I promised we would be contributors”*: news from the ERG

Posted on June 5, 2008 | Filed Under communication technologies

The European Regulators Group (ERG) is currently fighting a rearguard action not to be abolished with the revised framework. The Commission, not content with what this advisory body achieved (but who could blame an advisory body for not being able to enforce its views?), wants to replace it with EECMA, a new advisory body, which would have some semblance of a European agency and a few not really important decision making powers (by the way, the reform package is up for a first discussion in the Council on 12 June 2008, while the European Parliament could not find a date for the first reading before summer and will now probably have it on 2 September 2008).

But it seems ERG is sufficiently frightened now to start every press release with a statement of humble submission, praising cooperation with the Commission and congratulating itself on what it has achieved, seemingly against all odds. The latest press release of last week’s meeting thus quotes the ERG-Chairman Daniel Pataki on “further reinforced” cooperation with the Commission (having read previous releases you would think they already had cooperated so closely and forcefully that any further reinforcement would hurt).  Pataki then said:

“We promised earlier this year, to come up with concrete responses to concerns in these areas [mobile termination rates, geographical segmentation of national markets, NGN and roaming] and we have delivered.“

So what ERG delivered (besides the press release and presentation) is:

As for community wide roaming, the ERG is clear on continuing regulation for voice calls and on extending the reach of the roaming regulation to SMS. For data roaming, the ERG is ambiguous: “The case for retail price control in data roaming is more finely balanced” (I love these euphemisms; others might have said: we could not agree on this this).

*) Shakespeare, The Taming of the Shrew, Act I Scene 2

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“Since they, so few, watch such a multitude”*: monitoring compliance with AVMS-Directive

Posted on June 1, 2008 | Filed Under digital content

watchWatching TV can be a business: at least when you succeed in a tender that the European Commission has just published. The Commission wants to conclude a framework contract for “Monitoring of the compliance by audiovisual media service providers in the MS with the provisions of Chapter IIa (Article 3e-3g) and Chapter IV of the Audiovisual Media Services Directive” (invitation to tender, tender specifications, draft contract).

The Commission is acting because - as it states in the tender specifications - “following complaints from the public and Parliamentary questions and petitions, the attention of the Commission was drawn in the past years to the situation prevailing in certain Member States in respect of the rules on television advertising.” Spain and Italy are mentioned, as they already received formal notices for non-compliance. I am quite sure, however, that there are also a few other countries where the application of the rules on advertising, as they are laid down in the Television Without Frontiers-Directive (and as of 19 December 2009, the Audiovisual Media Services Directive), may not be a priority of national enforcement.

Just a few days ago, the Austrian Federal Communications Senate found that a major TV Show produced in ccoperation between the German public service broadcaster ZDF, the Swiss SRG and the Austrian ORF, included pure advertising (without the necessary separation; the decision, in German, can be found here). This show (”Wetten dass..?“) has for many years been widely criticised (and mocked) for its rather obvious mixture of show and advertising. Still up to now there has not been any action by the German authorities to enforce the rules (or - as the Commission defines its modest aim in the tender specifications - “to reach an appropriate level of application of the rules in question”).

*) Shakespeare, King Henry VI, part 1, Act I Scene 1 (for the Austrian readers of this blog: currently playing at the Burgtheater in Vienna, I’ll be there on Tuesday)

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