VZCZCXRO9621
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHFR #1262/01 0890621
ZNR UUUUU ZZH
R 300621Z MAR 07
FM AMEMBASSY PARIS
TO RUEHC/SECSTATE WASHDC 6099
INFO RUCPDOC/USDOC WASHDC
RUEAFCC/FCC WASHDC
RUEAWJA/DEPARTMENT OF JUSTICE WASHDC
RUCNMEM/EU MEMBER STATES

UNCLAS SECTION 01 OF 02 PARIS 001262 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EB/CIP, EUR/WE, AND EUR/ERA 
DEPT PLEASE PASS TO USTR JMCHALE, KSCHAGRIN, AND CHINKLEY 
FCC/INTERNATIONAL FOR TWEISLER 
COMMERCE FOR NTIA CSPECK AND ITA JBURTON 
JUSTICE FOR KWILLNER 
BRUSSELS FOR USEU JUNDERWOOD 
 
E.O. 12958: N/A 
TAGS: ECPS ETRD FR
SUBJECT: FRENCH LAW ON DIGITAL TELEVISION TAXES TELCO PROVIDERS 
 
Ref: 06 Paris 7728 
 
NOT FOR INTERNET DISTRIBUTION 
 
Summary 
------- 
 
¶1. (U) On February 22, the French Parliament approved a GOF-drafted 
bill that will replace analog with digital television by 2011, 
launch high definition television (HDTV), and provide for handheld 
portable TV services.  The GOF has not yet decided how it will 
allocate the spectrum freed by the end of analog television.  The 
bill will extend the tax that TV stations pay to support new content 
production to all TV distributors, including telecommunications 
operators of ADSL broadband services. 
 
End summary. 
 
The Digital Shift 
----------------- 
 
¶2. (U) Proposed by the Government in June 2006 and approved by 
French Parliament on February 22, the law on the "Modernization of 
Audiovisual Broadcasting and Television of the Future" entered into 
force on March 7.  The law's purpose is to organize the conditions 
for the replacement of analog television by digital TV.  Digital 
television will replace analog television between March 31, 2008 and 
November 20, 2011.  A national plan will determine when the switch 
will occur in each region as well as other details related to the 
change.  The GOF will draw up this plan after conducting public 
consultations and receiving a proposal from the Digital Strategic 
Commission that President Chirac established in May 2005. 
 
¶3. (SBU) The Prime Minister will reallocate spectrum freed up by the 
switch from analog to digital television to the French 
Administration, French broadcasting regulator Conseil Superieur de 
l'Audiovisuel (CSA) and telecoms and postal services regulator 
Autorite de Regulation des Communications Electroniques et des 
Postes (ARCEP).  The GOF will make public its strategy for spectrum 
reallocation at a later date.  ARCEP Spectrum Management Chief 
Michel Combot told us that the GOF is considering a U.S.-style 
auction to reallocate the spectrum, although some of it may be set 
aside for audiovisual uses. 
 
Allocating capacity for new TV services 
--------------------------------------- 
 
¶4. (U) The GOF will provide some, but not all, of the spectrum to 
CSA so that it can quickly launch audiovisual (a/v) services on new 
platforms or using technology not yet developed.  One of the first 
new services will be television services delivered over mobile 
telephones.  Generally, the CSA will take into account a network's 
commitment to abide by the existing French and EU broadcasting 
quotas (50 percent French content plus an additional 10 percent EU 
content) in delivering digital HDTV licenses.  For mobile television 
services, however, the law allows CSA to be as flexible as possible 
so that new service providers can attract enough customers to make 
their services viable.  Depending on the frequencies available and 
the roll-out of the HDTV network, mobile television services could 
be launched as early as next fall. 
 
Mandating action in favor of new services 
----------------------------------------- 
 
¶5.  (U) A Parliamentary amendment was attached to the GOF-drafted 
bill that mandates that all television sets sold from 2008 include a 
digital tuner.  The law bans manufacturers from delivering 
analog-only television sets to retailers beginning nine months from 
the law's date of entry into force (March 7), and retailers will no 
longer be able to sell analog-only TV sets from March 7, 2008. 
 
¶6.  (U) The law specifies that Digital Terrestrial Television (DTT) 
will be available to 95 percent of the French population.  To enable 
the remaining 5 percent to access services similar to those 
available on the DTT platform, the law requires that a free-to-view 
satellite service be available as of this summer. 
 
A price to pay 
-------------- 
 
¶7. (SBU) The law will extend the tax that TV stations pay to support 
new content production to all TV distributors, including 
 
PARIS 00001262  002 OF 002 
 
 
telecommunications operators of ADSL broadband services.  This tax 
is already paid by France-based terrestrial and cable TV stations to 
support new content production, provide grants and subsidies to 
French films and producers of audiovisual works, and contribute to 
the production of high-definition and mobile-television formats.  A 
Union for a Popular Movement (UMP) Parliamentarian who leads a 
Parliamentarian study group on internet issues asserted that these 
provisions illustrate that the new bill is technologically neutral. 
An ARCEP Commissioner told us that such a legal provision had the 
advantage of allowing ADSL operators to gain access to content. 
 
¶8. (SBU) To protest this move, France's leading triple play 
(internet telephony/ADSL broadband/television) service provider Free 
unsuccessfully started an online petition against what it called the 
"Internet tax," which generated over half a million signatures in a 
few days.  Free questioned whether it would benefit from this tax. 
 
 
Comment 
------- 
 
¶9.  (SBU) While reaction to the law's switch to digital television 
was unanimously positive, criticism has focused on the extension of 
the new tax to finance French content.  Observers have noted that 
the audiovisual financing provisions are increasingly out-of-touch 
with technological developments, particularly given the rise of user 
generated content, interactive TV, and websites such as YouTube or 
BitTorrent. 
 
Stapleton