On July 22 2010 the Communications Authority adopted Resolution 397/10/CONS, amending Regulation 66/09/CONS on quotas of European-created content.

The quota system is intended to protect the European audiovisual industry, but the burden on television broadcasters has been consistently reduced. The authority's latest reform clearly seeks to make the programming obligations more flexible and to give broadcasters greater freedom in determining editorial content.

Content quotas

The protection of European works remains based on the general duty of all television broadcasters to reserve more than half of their relevant broadcasting hours for such works. Unlike the previous provision, the new regulation includes time dedicated to the transmission of debates for the purposes of relevant broadcasting hours, in order to make Italy's rules consistent with EU provisions.

Under Paragraph 6 of the former resolution, television broadcasters were obliged to broadcast European works for more than 50% of both their daily transmission time and their peak viewing time. The latter is defined as the period between 7:30pm and 11:30pm. However, thematic channels must communicate their peak time if, based on audience share data, it differs from the legally defined period.

In the new resolution, all references to daily transmission time and peak viewing time have been removed from the wording of Article 3. Under the new rules, broadcasters must reserve 50% of their total annual transmission time for European works; therefore, the obligation no longer affects daily transmission time.

In addition, the rules on peak viewing time have been repealed. Thus, a broadcaster may choose to devote 100% of its peak time to non-European works.

The authority has increased a broadcaster's discretion to determine its channel's editorial content by abolishing the obligation to share the 50% quota across all genres of European works, which formerly applied under Article 3(1) of the old resolution. Notwithstanding such increased discretion, broadcasters must still allocate:

  • 6% of the quota to children's programmes;
  • 20% of the quota to programmes suitable for family viewing by children and adults; and
  • 10% of the quota to European works of the past five years.

The last percentage also includes time for the broadcasting of films which are deemed an "original expression of Italian culture". However, the proportion of such works to be included in the 10% allocation is now unspecified; previously, films meeting this criterion had to account for at least 20% of the time reserved for European works of the past five years.

Investment quotas

Despite a number of changes to content quotas, the new resolution makes few changes to the general provision that broadcasters must allocate 10% of their annual net revenues to European works by independent producers.

The only significant difference from the previous rules is the repeal of a rule that required broadcasters operating free-toair channels to allocate 30% of their investment to films defined as original expressions of Italian culture. However, a ministerial decree, which is expected to be issued shortly, will set a new percentage for all broadcasters.

An adequate percentage of the investment in European works by independent producers must be allocated to recent European works, including films which are original expressions of Italian culture.

In certain cases, broadcasters may apply to the authority to be allowed to derogate from the transmission and investment quotas. The authority may grant such derogation if:

  • the broadcaster has not made profits in the preceding two years;
  • the broadcaster holds a market share of under 1% (in terms of revenues from advertising, teleshopping, sponsorship, other agreements between the broadcaster and other entities, state contributions and pay-television programmes);
  • the channel is either a thematic channel or a generalist channel which exceeds the 1% quota, but for which the market provides no effective availability of editorial products that are consistent with the editorial line of the channel.

Comment

From a television broadcaster's standpoint, the new resolution is positive in a number of ways, as the increased discretion in freely determining a channel's editorial content is a key part of a wider freedom in doing business in the television broadcasting sector. The change is likely to present new opportunities for broadcasters to increase their profits consistently.

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.