LONDON -- A maze of regulatory roadblocks is threatening to slow the development of QVC and infomercials in Europe.
At issue is a 1991 directive issued by the European Union, which limits paid programming to one hour a day. The EU, led by Germany and France, would like to see the policy enforced.
It has launched legal action in the European Parliament against the British government for licensing QVC and about seven other home shopping channels, including those operated by Quantum and Regal.
The EU argues that the services are advertising and should not have been licensed as all-day channels. An EU official said the action currently is being filed with the European Court, part of the European Parliament. He said a decision is not expected until late this year.
At that time, the EU will also review its own directive to decide whether the rules should be made stricter or relaxed. If the EU succeeds, it could force the U.K. to withdraw the licenses for the channels, or severely restrict their transmission times, which would stunt the growth of Europe's fledgling home shopping industry.
Industry executives say they are not concerned about the legal action at this stage, since they have been assured by the U.K. that it plans to strongly resist the EU case. The U.K. and other countries take a more relaxed view of the EU directive.
"The problem is that when the directive was originally set, a lot of channels now broadcasting were not even thought of," said Andrew Haslehurst, vice president of Quantum International Ltd., in London. "The directive's main aim was to protect the public broadcasters in Europe."
But the U.K. is not above enforcing the rules when it believes companies have breached them. It recently forced NBC Super Channel, a U.K. cable and satellite service, to cut back the number of infomercials it was showing to comply with the one-hour-a-day limit on paid programming. The channel was offering up to 21 hours a week of infomercials under a deal with Quantum.
Peter Ridsdale, QVC's chief executive, is still bullish about Europe, but said any expansion into the Continent would be done only with full approval of the local governments.QVC will soon begin a slow expansion into Europe by transmitting its U.K. service into selected markets there, Ridsdale said. Trials in Norway and Denmark will begin within the next two months, and QVC is close to signing a deal with the cable television association in the Netherlands to offer its service there.
"We are expanding in a planned and managed basis into those markets, but France and Germany will take longer," he said. "As for the EU case, all we can do is carry on with the job we are paid to do. As everyone is telling us, this is the wave of the future. I can't believe the EU will ban such services."
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