Supreme Court decision derails France’s HD DTT time-table

By Barry Flynn, Contributing Editor

The timetable for the launch of up to 20 new HD DTT channels in France has just become even tighter, after the French regulator, the CSA, was forced to cancel its request for proposals (RFP) for the new licences.

The RFP was originally published on May 27, with a June 29 deadline for submissions (see previous story). But it was subsequently cancelled, then re-issued on July 30. The new submissions deadline is September 8, ten weeks later than the first.

That matters, because the timing of France’s ‘second switch-over’ to MPEG-4 is already too tight for comfort: the country’s entire DTT platform must switch off MPEG-2 by April 2016 – a key milestone laid down by the French government to allow the transfer of the 700MHz band to telecoms operators.

It is this spectrum sell-off which, despite forcing a reduction in the number of France’s DTT multiplexes from 8 to 6, will free up new HD DTT capacity – since it puts an end to less efficient MPEG-2 transmissions.

This leaves just seven months for submissions to be assessed, licences issued, and successful applicants to get their new HD channels up-and-running – and the required new legislative framework has yet to be put in place.

A CSA spokesman said the new RFP was, to all intents and purposes, identical with the previous one (for more detail, see original story).

So why did it have to be withdrawn and re-issued? It’s all down to France’s troubled pay-DTT platform.

In July 2014, the CSA rejected applications by three owners of pay-DTT channels to have their broadcast licences changed to free-to-air ones. The channels in question were LCI (TF1), Paris Première (M6), and Planète (Canal+). By then, TF1 and M6 had already announced that their jointly-owned pay-DTT venture, TF6, was to cease broadcasting by the end of that year, the latest in a parade of similar closures. TF6 had been a loss-making venture since 2009, and only ever reached 400,000 subscribers.

TF1 and M6 appealed the CSA decision to the Conseil d’Etat (Council of State), France’s Supreme Court for administrative issues, arguing that the CSA had committed a procedural error in publishing its impact study on the consequences of allowing the channels to go free-to-air (which essentially found that there would not be enough advertising revenue to go round) on the same day as its decision to disallow the move.

This did not give the appellants – or anyone else – a chance to comment on the impact study’s conclusions prior to the CSA making a decision which depended on them – which the appellants said contravened the law relating to such spectrum-related rulings.   

The Council of State agreed, and annulled the CSA’s decision. The CSA will therefore now have to re-examine TF1 and M6’s applications to move their pay-channels to a free-to-air model.

What does any of this have to do with the CSA publishing an RFP for new DTT channels? The issue here is that the Council of State only got round to publishing its ruling on the TF1/M6 appeals on June 17 2015, after the CSA had published its initial RFP for new HD DTT channels in May – and it so happens that this also coincided with the publication of a similar impact study which underpinned the RFP; similar, insofar as the CSA’s RFP is aimed not so much at new DTT entrants, but at current SD DTT players wanting to move to HD, who may or may not wish to implement a concurrent change in their business model from pay to free (or vice versa). All of which potential moves have possible impacts on, among other things, how France’s TV advertising pie is shared out.

In other words, the CSA risked a second appeal on precisely the same point of law, viz. that it had failed to allow time for interested parties to comment on an impact study prior to announcing a decision related to the change of use of DTT frequencies – which is what the HD DTT RFP is, in effect, all about.

On that basis, the CSA decided to play it safe, cancelled the initial RFP, and opened up the associated impact study to public consultation, setting a deadline for responses of July 10. It also changed its procedures to avoid such an error arising again.

Having examined the responses to the study, the CSA concluded that they called into question “neither the principle nor the scope” of the original RFP, and therefore re-issued it on July 30.

It will be interesting to see whether any existing SD pay-DTT player will choose to submit an application for a free-to-air HD licence, and if so, whether the CSA will approve it.

The precedent of the CSA’s LCI/Paris Première decision (which few believe will change once the regulator has had a chance to examine it again) militates against either eventuality, as do the CSA’s conclusions in its HD DTT RFP impact study. These state that, inter alia, that in the case of an existing service seeking to change from pay to free, the advertising market would be negatively impacted (see Figure 1 below for the complete impact study results).

Those questions will no doubt be answered some time after September 8, when the CSA will announce who the winning candidates are for the new HD DTT spectrum.

Figure 1: Nature of potential impact of different types of licence change on the pluralism of the programme offer, audiences and advertising market

Source: CSA