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Ofcom, the UK telecommunications regulator, has said that a European Union plan to regulate video risks restricting innovation and even forcing companies to relocate outside the EU to avoid compliance.

Current legislation identifies as a regulated service one... “the principal purpose of which is the delivery of moving images with or without sound”, and could therefore be applied to everything from video blogs to on-line computer games.

Television is a highly regulated industry, and the costs of implementing those regulations are considerable, and borne by the broadcaster. Ofcom argues that imposing that same regulatory burden on new media sources will either stifle their development or just make them relocate to outside the EU.

Ofcom also recognises the problem of enforcing the regulations in its research report "Assessing Indirect Impacts of the EC Proposals for Video Regulation":

"The only feasible way to enforce the Directive is via the intermediary, content host or service provider as a proxy of the content editor."

The report suggests differentiating between linear and non-linear video: the former being streamed services where the content is aligned with a channel or service- which includes broadcast TV, and the latter being programming which the user has specifically asked to download- such as Video On Demand or on-line blogs.

Linear video would therefore be subject to regulation in the same way as TV, but non-linear services would receive only light-touch regulation to enable the markets and services to develop freely and, most importantly, within the EU.

What’s most interesting about the Ofcom report is that it appears to have been written by people who understand something about how video distribution is changing, and makes some good arguments about how the market might develop over the next five years. We can only hope that the rest of Europe takes note and doesn’t try to apply old rules to new media.®

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