The Hungarian regulator NMHH has published a summary of a public consultation covering 12 topics, including network neutrality and content integrity, on the effects of OTT content services on media services and the media market in general.

Launched last November, it attracted responses from a number of key industry players in the country including Antenna Hungária, Magyar Telekom, RTL, Telenor, TV2, UPC and Vodafone.

NMHH says it will now be able to proactively represent Hungary’s national opinion at the EU coordination meetings, most specifically at the discussion of the European Commission’s Digital Single Market proposal and the subsequent review of the Audiovisual Media Services Directive (AVMSD).

In the summary, NMHH says that almost all of the respondents believed that in the medium term OTT content services will not substitute or fully replace the services offered by traditional broadcasters.

The market entry barriers include language and cultural issues, the limited business opportunities due to market size, the legal environment unable to keep up with progress, and that industry players do not see that the technical conditions needed to offer OTT services are given.

It adds that the majority of respondents agreed that the media service providers within the scope of AVMSD would be disadvantaged by the obligation under the directive that other companies operating outside the EU but offering services to Europe do not have to fulfill. Another disadvantage they mentioned was that the non-European operators expanding their operations in the US and Europe typically operate in English-speaking countries; therefore, they do not have to pay for translating and subtitling films and they do not have to comply with the strict European programme quota system and the more stringent taxation terms.

The NMMH also says the operators could accept a solution where the regulator would allow internet service providers to develop new business models and new types of contract terms with consumers and OTT players as their traditional revenue sources are being threatened by successful OTT communication and messaging applications.

With regards to the European Commission’s initiative on a more detailed regulation of net neutrality, the respondents favoured flexible and differentiated regulation. Internet service providers urge for an opportunity to offer guaranteed service quality for a fee to subscribing content and application providers because this new type of revenue would enable them to sustain current and future network development projects, which would subsequently ensure that non-discriminatory best-effort type services could be operated in sufficient quality. Content providers emphasise that the “last mile”, i.e. the final stage of the broadcasting process should be based on competition neutrality, and it would be a welcome development if Internet service providers did not limit bandwidth for their competitors.

With regards to smart televisions, the respondents agreed that the lack of common standards already affect the present situation. Platforms are closed, applications are non-transparent, “third party” applications cannot be installed, and manufacturers only offer access to content services they prefer in a business sense.

However, opinions differed whether the state intervention in market processes would be justifiable.