Bill Roberts is Secretary General of the North American National Broadcasters Association.

At the recent annual general meeting of the North American National Broadcasters Association, several speakers touched on the importance of cultural policy in an increasingly global broadcast environment. Several key themes linked these discussions.

The first was the opportunity for broadcasters to leverage their domestic operations to reach new multi-channel markets abroad. Contributing to this global outlook is the escalating cost of production, which is making it more difficult for program producers to recoup their investments within a domestic marketplace – forcing them to look to foreign markets.

Second, broadcasters are grappling with the opportunities and threats imposed by new technologies.

The emergence of dbs and concerns over the ‘gray market’ (i.e. unregulated or in territories where programming rights have not been acquired) poses serious cross-border problems for countries like Canada.

For broadcasters, the development of the Internet raises the issue of what business they are in, and how their rights will be protected when programming can be accessed universally.

The increasing digitization of the television industry will cause profound changes in the distribution of programming and the underlying cost structure of the business.

Third, broadcasters are struggling with the very definition of broadcasting itself. This is apparent in the membership of associations such as nanba, which has expanded from traditional over-the-air broadcasters to now include satellite, cable and dbs service providers.

This transcending of industry lines leads to questions: Are broadcasters content producers or distributors – or both? What is broadcasting? What rights and protection do broadcasters have in an increasingly competitive global marketplace? What organizations will be effective in representing broadcasters’ interests in the future? These questions must be addressed.

It is not surprising then, that these themes converge in discussions of world trade policy and the resulting impact on the broadcasting industry.

Definitions of broadcasting, the provision of government tax and subsidy support to encourage creation and distribution of domestic product, domestic content requirements, market access through licensing regimes, and ownership restrictions are all part of cultural policy measures adopted by various countries to promote and protect broadcasting services.

NAFTA and the WTO

To date, cultural industries, including film, sound recording, television and the performing arts, have largely been carved out or absent from trade agreements. These industries, which also include books, magazines and newspapers, are exempted in the North American Free Trade Agreement, although there are structured provisions for retaliatory measures.

In the case of the recent basic telecommunications agreement under the World Trade Organization, the majority of countries chose not to include commitments concerning broadcasting services. As such, trade agreements contain very little when it comes to liberalizing the business of broadcasting.

However, this could change significantly in the future. By January 2000, wto member countries will meet again to begin the next round of negotiations covering services. Audiovisual services, which encompass broadcasting, will quite probably be included in this next round.

Given the time frame, it is not too early to explore what is at stake for the broadcasting industry and why broadcasters should care.

At the core of the wto agreements in goods and services are two key principles. The first is Most Favored Nation status, meaning that, in general, favorable treatment afforded to the goods and services of any signatory must be extended to similar goods and services of any other member. The second is National Treatment, meaning that domestic goods and services cannot be treated more favorably than imported goods and services.

In addition to these principles, another important facet of the wto agreements is the dispute settlement process. The process provides an agreed upon legal foundation for wto members to resolve trade conflicts.

Dispute settlement enables aggrieved parties recourse to overcome prescribed trade barriers.

In moving forward into the next round of discussions, broadcasters must decide what rules they can follow with respect to global trade in broadcasting services. For example, the u.s. currently restricts direct foreign ownership in broadcasting services to 20%. Mexico, in contrast, permits foreign ownership of up to 49%, while in Canada foreign ownership of broadcasters is limited to just more than 46%.

However, the American definition of broadcasting is more restricted to over-the-air conventional broadcasting, while Canada includes cable services and cable distributors as part of the broadcasting regime.

Will the u.s. be required to change its foreign ownership restrictions? Will Canada and Mexico harmonize the definition of broadcasting with the u.s.? What impact will it have for the broadcasting industry in North America?

Canada has a long history of content restrictions designed to promote and foster Canadian broadcast services and to provide opportunities for Canadian primetime programming. To what extent will content requirements be permitted under future wto agreements?

Mexico has expressed concern over the ability to foster Spanish-language programs in the face of a growing number of English-language services. What opportunities will there be to promote Spanish-language programming services in the future?

Could domestic licensing restrictions that prohibit foreign dbs services be considered a barrier to trade under future wto agreements or services? What will be the basis for trade in broadcasting in light of the Internet? Will intellectual property rights recognize the rights of broadcasters across multiple media? How can piracy in foreign markets be more effectively controlled?

What’s next?

While broadcasters struggle to define the rules of global trade for their industry, one thing remains clear. North American broadcasters are well positioned to capture global opportunities.

According to the Motion Picture Association of America, 40% of revenues earned from American movies, television programs and home video are derived from exports to other countries. Canada is also a major exporter of television programming, particularly to the u.s., and Grupo Televisa of Mexico is the world’s largest producer of Spanish-language programming.

In preparing for the next round of negotiations, broadcasters must establish dialogue on trade issues with government representatives as well as each other and explore the pros and cons of various models.

However, Canada and Mexico have established measures to promote indigenous television services and programming in the face of the enormous impact of the u.s. entertainment industry.

It will thus be a major challenge for North American broadcasters to reach consensus on the rules of trade in broadcasting. If some cooperative strategies emerge, North American broadcasters could well set the tone internationally. To that end, nanba initiated a process of North American broadcaster consultations in 1997.

And we are hopeful that the basis for a nafta-wide common cause will emerge.