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U.K. Digital Economy Bill Could Propose Retransmission Fees

LONDON — British government unveiled its Digital Economy Bill on Tuesday, which could see the territory adopt retransmission consent fees like its U.S. counterparts if the bill is accepted in parliament.

One part of the 145-page bill suggests to repeal section 73 of the Copyright, Designs and Patents Act 1988, which has meant that pay-TV operators, such as pan-European giant Sky and Virgin Media, have been able to retransmit public service broadcast channels such as BBC, ITV, Channel 4 and Channel 5, without payment.

It’s a cause that ITV and Channel 4 have lobbied hard for in recent years, with ITV previously pointing out that U.S. free-to-air broadcasters receive more than $3.3 billion in retransmission payments from cable operators.

“We have consistently called for major pay-TV platforms to pay U.K. public service broadcasters fairly for the transmission of their channels ending what is effectively a multi-million pound subsidy – and this is clearly a welcome first step in that direction,” said a spokesman for ITV. “This is simply about ITV, and other PSBs, being paid fairly for their investment in original UK content so that we can continue to invest in the programmes viewers love.”

Back in 2014, ITV chief exec Adam Crozier said that “introducing retransmission fees would have clear benefits to the U.K. creative industries and the wider economy – as well as to viewers right across the U.K. – by enabling PSBs to continue to invest in the original programming that people love to watch.”

Last year, regulation body Ofcom suggested that allowing PSB’s to charge pay-TV operations would be a regulatory nightmare and while the channels would benefit financially, new regulation would need to be introduced to make it work, with no guarantees of how the extra funds would be spent.

But should new regulations go through, it would see channels such as ITV and Channel 4 earn $157.7 million and $97 million respectively each year, based upon research the channels presented to the government.

Unsurprisingly, Virgin Media took the view that proposals to scrap section 73 did not indicate a victory for retransmission fees for PSBs saying that the government made it clear that it would ensure “zero net fees” in the proposals.

“Virgin Media welcomes the government’s decision to reject a two year lobbying campaign by ITV and Channel 4 to charge viewers extra fees for watching programmes on cable and satellite that they’ve already paid for,” Virgin Media’s chief corporate affairs officer Brigitte Trafford said in a statement.

The Digital Economy Bill also includes measures to “protect children from online pornography by requiring age verification” as well as suggesting criminal sentences for those who infringe copyright.

Additionally, the legislation outlines government plans to deliver a universal service obligation (USO) for 10Mbps broadband, which will see every home and business be able to demand the right to a minimum broadband speed, which will make the U.K. “the most digital nation in the world.”

“We want the U.K. to be a place where technology ceaselessly transforms the economy, society and government,” said Ed Vaizey, digital economy minister. “The U.K. has always been at the forefront of technological change, and the measures in the Digital Economy Bill provide the necessary framework to make sure we remain world leaders.”

The bill will now begin its journey through parliament where it will be debated in the House of Commons before moving onto the House of Lords in the Autumn. Royal assent, which is needed to make the bill into legislation, is expected in early 2017.

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