July 26, 2006 7:20 AM PDT

Mobile operators attack 'stifling' EC legislation

A group of IT industry players, mobile operators and content providers has added its voice to the debate surrounding the European Commission's attempts to regulate online broadcasting.

The Mobile Entertainment Forum (MEF) said on Tuesday that amendments to the Television without Frontiers (TVwF) Directive--which seeks to regulate new-media content broadcasting--could restrict economic growth by imposing advertising controls used for traditional broadcasting onto mobile multimedia services.

"If mobile is included in a directive that was primarily designed to involve the linear broadcast model, the current definition could stifle the growth of the nascent mobile entertainment industry," Patrick Parodi, global chair for MEF, told ZDNet UK.

Viviane Reding, commissioner for digital society and media, said last month that there should be basic rules to prohibit overly repetitive advertising within new media content such as video-on-demand.

However, MEF, whose members include Microsoft, Ericsson, EMI Group, O2 and Motorola, fear that this could stifle revenue generation.

The group plans to push for freedoms to generate revenue from new business models such as user opt-in advertising, where people choose to view ads in return for a reduced, or even completely subsidized, subscription rate.

At present, all mobile video, music and game downloads are paid for by the user. The mobile forum argued that people could benefit from opting in to advertising.

Warning against ad overload
It's also possible that mobile users would be alienated by a service that drowned them in ads. "If we overload them with ads, customers will go elsewhere," pointed out Hamish MacLeod, chairman of the Mobile Broadband Group, a consortium of mobile operators, last month.

"The user should be put at the center of consumption. Mobile phone advertising could fund and reduce the burden to the consumer of different services," Parodi said.

Parodi added that the issue of branded content also needed to be explored in the mobile medium. Current EU-wide traditional or linear broadcasting regulations do not prohibit product placement--legislation is currently left to individual member states. However, the amendments to TVwF could affect branded content.

Opponents to the legislation include the U.K. government, which last month called the proposed legislation "ill thought-through and ill-conceived" and warned that it could inhibit economic growth.

Parodi said that MEF would seek a "grace period" from the European Commission, during which business models for revenue generation could be experimented with.

"There is a feeling on behalf of our members that the business models around mobile entertainment are not fully understood. Mobile should be given breathing room, as it is in the early stages of development. We want to make sure the regulations have provided enough space to grow," Parodi said. The EC had not responded to requests for comment at the time of writing.

Tom Espiner of ZDNet UK reported from London.

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