Brexit: Deal or No Deal?

​David Short analyses Brexit on the eve of the EU Summit, and what’s at stake for the UK ​TV industry

​After what feels like much more than 18 months of negotiation, we’ve reached the “crunch week” for Brexit. This week the critical EU Summit will take place where a Brexit deal should be agreed, or not. As I write this, the EU and the UK Government are both saying that key points remain to be settled and worse, that Brexit has been taken off the agenda for this week’s summit.

Where does this leave us, and specifically the TV and broadcast industry? If Brexit goes ahead, it’s very likely that the UK or at least Great Britain, will leave the Single Market. If there is a deal, this won´t happen until the end of the transition or “implementation” phase expected to be in December 2020.

​However, a “no-deal” seems increasingly likely. This could mean that the UK crashes out of the European Union at 11pm London time on 29th March 2019.

While a transition phase would give broadcasters and other TV industry players fair notice, a no-deal could happen in less than six months and possibly at very short notice. Some of the British press suggest that now (mid-October) is the period of maximum danger for the May Government. This does not mean plain sailing if we get past it. If the UK Government collapses, there could be certain scenarios where the UK and EU agree to extend Article 50. While this would push back the “cliff edge” it would also extend the period of uncertainty. If the UK does make a deal with Michel Barnier and the European Commission, a deal must still be agreed by the European Parliament, 37 national and regional parliaments and last but not least, the UK Parliament at Westminster. It could fall at any of these hurdles, thereby forcing a no-deal at short notice.

Urgent issues facing broadcasters are EU-wide recognition of national broadcast licences, free movement of labour and the General Data Protection Regulation (GDPR). Later, the UK broadcast industry will want to access and influence the digital single market which is currently under development – how easy this will be will depend on the type of Brexit deal.

​Other issues include copyright law and funding. While all of these are significant issues, copyright law is based on WIPO principles and is unlikely to change quickly as it will be low on the UK Government’s priority list. Public funding of TV and film production is likely to change. For example, it is unlikely that EU funds will be available for British projects. However, this is only likely to ​affect new projects in all but the most extreme scenarios. ​

Single market rules currently allow recognition of Ofcom broadcast licences across the EU based on the “country of origin” principle, enshrined in the Audiovisual Media Services Directive (AVMSD). I estimate that 320 of the 1040 Ofcom-licenced channels broadcasting out of the UK are directed exclusively to other EU countries. There are probably another 250 channels that broadcast both to the UK and other EU countries.

When Great Britain leaves the Single Market, Ofcom licences will no longer be valid in other EU countries. The UK Government has pointed out that broadcasters could fall back on the Trans-Frontier Television convention. However, this does not cover all EU states and lacks any dispute resolution system. Notably, Eire is not the convention and I understand, for example, that Sky will stop transmitting unlicensed channels to the Republic after Brexit.  To get a broadcast licence, companies must have significant editorial control based in the relevant country and this could involve significant relocation. We know that Discovery is shutting its West London base and considering a new hub on the mainland. They have denied that this is Brexit related, but many companies are loathe to get embroiled in this sort of pollical issue.  The UK -Based Commercial Broadcasters Association has long been warning that many of its members will need to restructure to cope with any form of “hard” Brexit i.e. where the UK leaves the Single Market.

The Trans-Frontier Television conventions do not apply to on-demand and if UK based operators lose country of origin rights, they will need to apply for licences in all their destination countries.

Another issue to consider is the effect of GDPR. Once outside the EU or EEA, British data processors will be considered to be operating from a “third country”. The EU can issue “certificates of adequacy” for third countries to allow them to process EU personal data. This is not an automatic process, so there could be a period where holding European personal data on UK servers was not permitted. At worst, the European Commission might cite recent ECJ rulings which raise concerns about the excessive surveillance powers of the UK authorities and refuse a certificate.

The last of the big issues relates to freedom of movement. The TV and broadcast sector relies on freelancers and small companies. HR departments in large corporations can deal with visa and inter-company transfers of staff in their stride. However, for small companies and for short term projects such as TV and film production, these become larger hurdles.

​Brexit for broadcasters is a microcosm of Brexit itself and there are no simple answers. What are broadcasters to do? In modern times and outside of war or natural disasters, it is hard to think of an environment that has been more uncertain and as impactful. If crunch week goes badly, it opens up outcomes such as a new UK government or a second referendum although “no-deal” would be the most likely. If crunch week goes well, there are still many hurdles before the outcome can be known with certainty. Most of the likely outcomes mean that the UK will leave the single market and many of those mean “crashing out” with the associated confusion and loss of good will. Therefore, broadcasters and other organisations must start activating contingency plans.

David Short is a Freelance Media Technology Consultant and Vice Chair ​of the IET Multimedia Communications Network.