The freedom to provide audiovisual services
In spite of the fairly reduced EU cultural competence, the freedom to provide services affords the necessary inroads for EU action in the audiovisual sector. Already in its 1974 Sacchi decision, the Court of Justice of the European Union (CJEU, former European Court of Justice, ECJ) held that '[i]n the absence of express provision to the contrary in the Treaty, a television signal must, by reason of its nature, be regarded as provision of services... [and] comes, as such, within the rules of the Treaty'.4 This has marked the inception of the reading that audiovisual activities are of a dual nature representing a peculiar mix of economic and cultural service.5
Subsequently, the freedom to provide services has been instrumental in removing legacies of member states' rules that were discriminating against foreign television programmes, thus liberalising the provision of audiovisual services in the common market (Bottcher and Castendyk, 2008: 90; Harcourt, 2005: 22f.). On a number of occasions member states invoked cultural policy objectives; however, every so often a protectionist or disproportionate measure failed to justify national restrictions to the freedom to provide services, not least because many restrictions were outlived by the technical possibilities.6 The EU has been in a position to resolve the issue of cross-border broadcasting via satellite television and cable re-transmission which can explain the relative success of the EU freedom to provide services compared with member states' national policies in the 1990s (Humphreys, 2008: 183).
Gradually the EU accumulated regulatory influence in the audiovisual field that peaked when in 1989 the Television without Frontiers (TWF) Directive (Council of the European Economic Community, 1989) was issued on the basis of its competence to coordinate member states laws to bring about the freedom to provide services in the internal market (now Article 53(1) TFEU, in conjunction with Article 62 TFEU). EU legislation in the audiovisual sector is thus motivated by economic integration and internal market objectives, yet emphasises positive synergies for cultural diversity and also media pluralism, as will be shown below.
In external relations, the EU is now exclusively competent for the common commercial policy, including trade in services (Articles 3 and 207(3) TFEU). Article 207(4)(a) TFEU contains an important threshold when entering into international agreements in the field of trade in cultural and audiovisual services that requires the Council to act unanimously 'where these agreements risk prejudicing the Union's cultural and linguistic diversity'. In negotiating international trade agreements, EU bodies and member states have jointly sought to exclude audiovisual services from liberalisation, for example under the General agreement on trade in services (GATS). There is in fact an expectation in international law that the UNESCO Convention might help to legitimise EU and member states' politics of cultural protectionism (Craufurd Smith, 2007a; Puppis, 2008: 417). Relevant issues are discussed in detail in the fourth part of this book.