With two months to go before the United Kingdom is due to leave the European Union, there is continuing uncertainty about the consequences for international broadcasting in Europe. The future of London as a European hub for international broadcasters is at stake. Negotiations to date have done little to support transitional arrangements for audiovisual services and the prospect of leaving Europe without any agreement seems increasingly possible.

A recent report by the CBI, What comes next? summarises the state of business preparation across a range of industries for Brexit and the possibility of leaving without a transitional agreement.

Carolyn Fairbairn, the director general of the CBI, is a former director of strategy and distribution and member of the executive committee at the BBC. The CBI is also a Royal Charter organisation, which represents over 700 member companies and the interests of over 190,000 businesses that employ nearly 7 million people in the United Kingdom.

In its analysis, the CBI reports that there are no areas of relevance to the economy where the United Kingdom, the European Union and the business community are all prepared well enough for the country to depart without a deal. It says the short-term shock will be severe and the effects of no deal would ripple on for years.

With regard to broadcasting, the CBI notes that there are more than 600 television channels that broadcast internationally from the United Kingdom and without a deal their right to do so freely into the European Union will fall away. This puts at risk the status of the United Kingdom as the leading international broadcasting hub in Europe.

On day one, due to be on 1 November 2019, channels licensed in the United Kingdom will no longer legally be able to broadcast into some countries in the European Union, specifically Belgium, Denmark, Greece, Ireland, Luxembourg, the Netherlands and Sweden.

Some broadcasters, including Discovery, NBCUniversal and Turner, have relocated operations and licences to other European countries. This requires them to have substantial operations in these countries. While this is achievable for multinational media companies, it may be more of a problem for smaller organisations.

The CBI says that most steps to get the broadcasting industry ready for no deal have been taken but the fundamental challenge for the sector cannot be avoided without an unprecedented deal.

The United Kingdom government has laid a statutory instrument to provide a legal framework for audio-visual services and confirmed that television channels from 20 European Union countries — as well as the Irish channels of TG4, RTÉ1 and RTÉ2 — will be able to continue operating in the United Kingdom providing they obtain a licence from the communications regulator Ofcom.

The CBI recommended that the government commission and publish a report from Ofcom by September on preparedness of the television channels broadcasting into the United Kingdom. So far, Ofcom has appeared rather reticent to comment.

The CBI also recommended that the government consider how to incentivise investment from media companies in order to offset the damage done to its global competitiveness by no deal, particularly its attractiveness to multi-nationals and the eco-system of 27,600 smaller companies that they, and in domestic policies for the long-term — including immigration policies.

The European Union has published a preparedness notice on audiovisual services, advising that member states will be able to restrict reception and retransmission of audiovisual media services that are not licensed in the European Union.

The CBI recommends that the European Union should ensure that there is sufficient resource allocated to licensing authorities to process applications, particularly in seven countries that are not party to the 1993 Council of Europe Convention on Transfrontier Television. It rates European preparedness as red.

No joint action has been taken between the United Kingdom and the European Union. The CBI recommends that they should explore the potential for formal cooperation between national authorities in order to help ensure audience protection.

The CBI observes that the broadcasting industry in the United Kingdom is relatively well organised and that most significant companies have undertaken the work that they need to in order to continue serving their customers. However, that will likely come at the cost of jobs in the UK and, in the medium- to long-term, the status of the United Kingdom as the leading television hub in Europe.

Overall, the CBI notes that the broadcasting industry is perceived as being as prepared as it can be for no deal.

However, ultimately there are no realistic steps that can be taken to change the fundamental challenge: in no deal — or indeed if a future deal does not cover broadcasting rights — the ability of the audiovisual sector in the United Kingdom to broadcast freely into the European Union will fall away, and greater movements of jobs from the United Kingdom to the European Union are inevitable.

While many companies may be able to minimise operational change in the short term, there is a clear risk that companies will divert more investment to the EU in the medium to long-term, as the United Kingdom slowly loses critical mass and other Member States continue to develop their infrastructure and become more attractive as a place to invest.

What comes next? The business analysis of no deal preparations was published in July 2019 and is available from the CBI web site.