UK retrans debate widens as government eyes regulation cut

UK culture secretary Sajid Javid has pledged to take a “long hard look” at retransmission fees between broadcasters and pay TV operators in an effort to cut government red tape.

In his first major appearance as secretary of state for the department of culture, media and sport, Javid told attendees of the RTS conference in London that in the he would look at balance of payments between broadcasters and platforms in the “coming weeks.”

“In our Connectivity, Consumers and Content strategy paper we set out our ambition for ‘zero net fees,’ and a lot of progress has been made towards reaching that goal. But I still want to know whether the amount of regulation around these transactions is really necessary,” said Javid.

While acknowledging that it was a complex issue that would go hand-in-hand with a review of EPG prominence, the minister said he wanted to look at whether government regulation could be removed from “what should be a private matter between two private companies.”

Referring specifically to Section 73 of the Copyright, Design and Patents act, which allows cable companies to retransmit channels without paying fees, Javid said while this helped to stimulate growth of the cable TV industry in the 1980s, it may no longer be fit for purpose.

“Now we have a much bigger, much more mature industry – the question is, is it still required in that industry, and I think that’s a very reasonable question,” he said.

“I have a very clear view of what power politicians should have over the media: as little as possible. Politicians and government have no business controlling television.

What we do have is a role to play in making the industry work for viewers,” said Javid, warning that government red tape should not get in the way of market developments.

The comments came in the same week that UK public broadcaster ITV called for major pay TV platforms to pay UK PSBs “fairly for the transmission of their channels, ending what is effectively a multi-million pound subsidy to Sky and Virgin.”

ITV CEO Adam Crozier said: “Introducing retransmission fees would have clear benefits to the UK creative industries and the wider economy – as well as to viewers right across the UK – by enabling PSBs to continue to invest in the original programming people love to watch.”

ITV also pointed out that in the US last year, free-to-air broadcasters received approximately US$3.3billion in retransmission payments accounting for nearly 15% of total broadcast television revenue. This is projected to rise to 25% by 2019.

Speaking at the RTS event yesterday, BSkyB CEO Jeremy Darroch said he was “broadly supportive of deregulation.”

“I think it’s really encouraging that the secretary of state recognises that this is a complex issue and is a connected issue. I think for deregulation to work it needs to work both ways and look at the entirety of the problem. I think it’s untenable for the commercial PSBs to look across the pond and say I’m just going to cherry-pick bits and pieces from an entirely different system.”