Regulation and Compliance

The Network and all of its Channels, whether AVTN, NewsNet247 or future offerings, will fall under the scrutiny of multiple Broadcast, Competition, Financial, and Health and Safety regulators in each territory that it operates in, while some AVTN production activities are also likely to fall under Aviation Regulators. A Chief Regulatory Officer will be appointed to oversee the necessary interactions and considerations of regulation and compliance that the Network and its personnel will need to negotiate on a daily basis.

Broadcast Regulation

Ofcom (UK), the FCC (USA), and the Media Development Authority (SIN), the CVDM in the Netherlands, BAI in Ireland and the TRA in Estonia are or may be the regulatory authorities in oversight of the Network and its Channels compliance responsibilities. These bodies are responsible for regulating the terms of licensing, and ongoing obligations as a broadcaster, including audience complaints relating to content and the compliance issues. Included within this area are requirements on quotas relating to content type, origination, ethnicity, disability, other minorities and social responsibilities. These may be designated by law, guideline and subject to regional variation. Experts in broadcast regulation and compliance will be contracted.

Financial Regulation

In addition to matters relating to the Network’s own incorporation; as a Broadcaster reporting and commenting on financial activities and shareholdings the SEC (Securities & Exchange Commission – US), FCA (Financial Conduct Authority – UK), and Monetary Authority of Singapore will all have regulatory requirements that must be adhered to, and similarly for any other EU location chosen. A key point will be that a considerable portion of personnel will be obligated to declaring shareholdings when directly reporting on the financial markets.

Health and Safety

Health and Safety is of paramount importance and will be taken very seriously, with policy based on best practice regardless of geographical location. Discussions have already been opened to create an easily accessed web and app based training program for both full-time and freelance personnel and contractors. In addition, a full-time Director of H&S will be appointed, though the initial formulation of a comprehensive policy may be outsourced.Regulatory oversight for the UK falls under The Health & Safety Executive (HSE); while for the US the body is The Occupational Safety & Health Administration (OSHA); and in Singapore the Ministry of Manpower, and other bodies will apply as per final decision on EU Operations, or location of personnel.

Aviation Regulation

Depending on the location and nature of news production, from time-to-time Network, and specifically AVTN, crews will fall under the regulatory oversight of Aviation Safety Bodies around the world, such as the CAA (Civil Aviation Authority – UK); FAA (Federal Aviation Authority – US); EASA (European Aviation & Space Authority – EU); or the Civil Aviation Authority of Singapore. This will be the case when crews are working on airfields; within airports; on aircraft; or when using equipment attached to or installed within aircraft, particularly stabilised camera mounts for helicopters and aircraft, or the use of UAVs (Drones). It will therefore be necessary to deal with regulatory editorial in a tactful manner.

Licenses

Licensing applications will be processed by the Network’s own General Counsel working in conjunction with the Company’s appointed legal advisors in each territory. Applicable in ALL territories discussed within this document, the granting of licences and permits is not a guarantee of satellite or cable network access for the proposed channel; licensees are subject to a test that they may be found to be ‘fit and proper’ persons to be issued and hold such a licence. Significant factors to consider are:

UK & EU

Application to OFCOM for a licence under the terms of the Broadcasting Act 1996 is straightforward with a fixed fee and banded turnover based element attached to each licence granted, renewable on an annual basis. There is a however a maximum turnover fee cap. A licence is required for any feed varying in any way from another, and for services demonstrably definable as differing to another. By maintaining a wholly news orientated service the Network is NOT required to adhere to the 50% EU programme origination quota; though applications for exemption may be submitted; and the Network will be exploring this avenue to allow for more diverse scheduling. At present, a Licence granted in the UK applies to the EU as a whole, this will cease to be the case when the UK leaves the EU. As defined within this proposal, alternative licenses and locations within the remaining EU member-states are currently under consideration. Ofcom turnover based fees apply to any ‘relevant revenue’ applicable to broadcasts made within Ofcom’s regulatory territory, and under the terms of each license; and are set in banded rates declared within the Project Proposal.

The United States

Subject to Network Structure or future operational commitments, application to the FCC under the terms of the Telecommunications Act 1996 S.652 requires the input of experienced regulatory and legal advisers dealing with the system of licences and permits that combine to cover the scope of an applicant’s requirements, and this will be handled by a specialist regulatory and legal team. The issue is more of complication than of cost. The FCC can require up to 75% ownership of a TV or Radio Station broadcasting from within the US; though in recent history the FCC has announced consideration of a relaxation of this requirement on a case-by-case basis. However, at present US political and regulatory framework is under considerable review. It is felt that the ownership rules for US services remain satisfiable with the appropriate combination of US investment and corporate structure at this time — this could represent up to 25% of the total investment required by this proposal.

Singapore

Application to the Media Development Authority under the terms of the Singapore Broadcasting Act is straightforward with a fixed fee licence required, per five year period, per licence. As the Network intends to register in Singapore, no local agent or bond is required. Broadcasts from Singapore must act responsibly with consideration to local laws of ALL Countries capable of receiving the broadcast, and is not seen as an issue for current proposed programmes.

The Netherlands

Application to the Dutch regulatory authority the CVDM is straight-forward and in-line with a plain-text interpretation of the AVMSD. Broadcasts into The Netherlands carry a 40% Dutch speaking quota, for which an exemption may be applied, though the Network intends to provide an amount of Dutch language VOD programming. Subtitling requirements exist for the hearing impaired (Not of issue). TV Licence rates have no profit based element, though are based off reach and audience calculations, as detailed within the proposal.

Republic of Ireland

The Republic of Ireland has been actively researching and presenting solutions to Brexit and all forms of business since 2016. The Regulatory environment under The BAI (Broadcasting Authority of Ireland) is accountable and transparent, and the AVMSD is interpreted based on a plain-text-reading, though independence, fairness flexibility and responsiveness to change is assured. The 50% European production quota applies.

Application for a Section 71 License covering Satellite, Cable, IPTV and OTT service providers is straight forward, The process should take 2-5 months, and fee structure is fair and transparent. Key codes-of-practice exist for Advertising, Children’s Advertising, Alcohol, Gaming, Programme Standards, Plurality and Impartiality, none of which present the Network with any particular concerns. It should be noted that Defamation and Contempt laws are stricter than in civil-law jurisdictions, and are Common Law. Privacy laws are constitutional.

Republic of Estonia

Requirements include: a registered Estonian company; an Editorial Control structure within the Country and EU recognised by the regulatory body and terms of the AVMSD. Significant workforce must be present or employed from Estonia. The Estonian Media Services Act transposes the AVMSD into law. Program structure must include 5% news; 10% monthly for internal production; 51% of content must be generated within the EU irrespective of news. Protections exist on advertising for Children, Consumers, Medicinal Products, Alcohol. Advertising slot allocations are 12 mins. max. News may only be interrupted once per 30 minutes. Typical sponsorship restrictions exist for news and current affairs. Broadcasts available in Estonia must be accompanied by an adequate Estonian translation, though this does not apply externally. Fees for a Satellite Broadcast Licence are fair and transparent, with licensing taking 6 months. The licence lasts 5 years. The service provider and service must be economically sustainable. Estonia will not supply licences in violation of International Treaties, or where the provider may violate EU Competition Law.

Performing Rights & Phonographic Performance Licences

The Network is responsible for reaching agreement with those owning copyright or performing rights to any of the material which it proposes to broadcast. Any music broadcast in the UK must be licensed by PRS for Music, www.prsformusic.com. Commercial sound recordings must be licensed from Phonographic Performance Limited. (PPL) www.ppluk.com. The playing of music originating outside the UK will remain subject to copyright or performing rights licensing. Copyright or performing rights conditions will be adhered to for each subsequent territory from which the Network or its channels broadcast from. The Network is working closely with PRS to estimate costs and negotiate license terms for a significant proportion of broadcasting jurisdictions. The US market is to be negotiated separately and music costs are on a more ad-hoc basis, and considerably more expensive. Significant funds have been allocated as an allowance within licence contingencies.

We would like to sincerely thank our colleagues at PRS UK for their on-going help in this area.

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