Brussels has joined the dispute between PSB broadcasters and pay-TV operators warning that a British law allowing Virgin Media free access to ITV and Channel 4’s main channels is an infringement of EU rules.
The European Commission has opened formal infringement proceedings over the legislation, which was introduced in the late 1980s to help the fledgling cable industry. It has written to the Government to demand Section 73 of the Copyright, Designs and Patents Act is repealed.
The intervention is a boost to the campaign by ITV and Channel 4 to extract retransmission fees from Virgin Media and Sky, although the legislation only directly affects the cable operator.
Analysts have estimated that a retransmission fees like American broadcasters enjoy, would deliver £100m in extra turnover for ITV and a 15% profit increase.

The European Commission’s warning to the Government could influence an ongoing review of retransmission fees ordered by the Culture Secretary, Sajid Javid, to scrap the legislation.
The broadcasters’ campaign has created a public dispute between ITV and pay TV operators Sky and Virgin Media.

ITV said the regime was “wholly outdated”. It is against giving away its main channel to Virgin Media and is also irked by increasing take-up of the cable operator’s TiVo set-top box, which records live TV and makes it easier for viewers to skip the advertising that funds it.
A spokesman said: “The majority of viewing on these pay-TV platforms is public service broadcaster programming yet ITV, whether as producer or broadcaster investing in creating that content, doesn’t receive any payment – despite the fact that pay-TV platforms pay commercial terms for other channels such as ITV2, ITV3 and ITV4.”

Brigitte Trafford, of Virgin Media, said: “We do not believe viewers should pay an additional tax for the privilege of viewing programming for which they have already paid.
“We’re pleased Government has confirmed its review of retransmission fees will encompass other wider benefits they enjoy.”

Sky also argued that any deregulation must cut both ways and ITV should be willing to lose its guaranteed prominence on channel menus.

In a House of Lords debate on the issue last week, Lord Gardiner, the Government spokesman, said: “my understanding is that the Government are wholly satisfied that this section is consistent with EU law.”
Television producers are nevertheless expecting to benefit from the introduction of retransmission fees, said Compact Media Group, which manages the collection process for them in other countries.

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By Expat