The present paper aims to provide an overview of the applicable legal tools in the field of broadcasting licensing in Russia.

I - Introduction: From Attempts at Intervention to A New Regulation of Broadcasting

Notwithstanding the adoption of the first laws and the repeated attempts at intervention in the legal system of electronic media from the time of the perestroika, the Russian regulation of the broadcasting field still presents many unsolved problems.

Aware of the great significance that television has in contemporary society, the Russian legislature acknowledged the need for regulation at the federal level, despite political and legal obstacles.

Notable in this respect is the preparation of a draft law on television and radio broadcasting that had the aim of regulating the relationship between Government, broadcasters, programme producers, and technical service providers, as well as serving as a legal framework for broadcasting activities and regulatory measures. A first draft was in fact submitted to the Supreme Soviet (parliament) of the USSR in the early 1990s, but neither this draft nor those prepared later for consideration by the parliament have ever been adopted because of different political positions on the issue.

One area of divergence concerned the decision on how to organize the licensing body and what powers should be granted to it. In fact, whereas the Law on Mass Media of 1991 (hereinafter "the Law on Mass Media") stipulated the creation of a regulatory body with wide powers in relation to licensing, the draft law on television and radio broadcasting granted it a mere advisory status. According to the most recent 1995 draft, the regulatory body would have consisted of eight representatives, two of whom would have been appointed by the President, two by each chamber of the Parliament and two by the Government. The Russian President was opposed to this bill, and vetoed it same year.

Following the failure of this proposal, and in the absence of a specific act on broadcasting licensing, the field is currently regulated by several general acts as well as by governmental regulations and presidential decrees. The Law on Mass Media constitutes the main legal basis for regulating broadcasting, but there are still numerous problems concerning its implementation. Since 1991, other laws and regulations modifying the former regulatory practice have been approved. The broadcasting field falls primarily under federal jurisdiction and regional acts are relevant only to the extent that they do not conflict with federal legislation.

This paper aims to give an overview of the applicable legal tools in the field of broadcasting licensing. As a first step, the system of regulatory bodies will be examined. Then, the analysis will move to the specific legislation governing the licensing procedure, namely the Regulation on Licensing of Television and Radio Broadcasting in the Russian Federation of 1994 (hereinafter "the Regulation on Licensing of 1994"), the 1998 Federal Law on the Licensing of Certain Types of Activities (hereinafter "the Law on Licensing") and the Regulation on the System of Broadcasting Competitions of 1999. The last part will concern two specific aspects of the field: the programme policy of the licensing procedure and the conditions for the renewal or refusal of licenses.

II - The System of Broadcasting Regulatory Bodies

For several years, the regulatory system in the media field has consisted of two main bodies: the State Committee on the Press and the Federal Service of Russia on Television and Radio Broadcasting (FSTR). These governed print and electronic media sectors respectively. A governmental regulation approved by the decree of 1994, conferred upon the FSTR the power to grant licenses. However, according to the Law on Communications broadcasters are also obliged to obtain a second license for their activity in the communications field from the Ministry of Communication. The conflicts and disagreements between these two bodies of the executive branch of the Government complicated the licensing procedure and the decision on an application for a license ultimately depended on the result of informal negotiations.

Following the presidential Decree of 1999 on the Government's management in the field of electronic media and communication , the system was reorganized by merging the two bodies into the Ministry of Press, Broadcasting and Mass Communications (hereinafter "MPTR"), with power to regulate both the electronic media and the press. The transformation of the two existing bodies, which had separately regulated broadcasting and the press, into one Ministry promised to streamline the regulatory policy governing the media and to reduce administrative confusion.

The scope of competence of the MPTR was determined in a Regulation approved by a governmental Decree of 1999. Within the scope of its jurisdiction, the MPTR has the power to monitor the implementation of advertising legislation, to set technical standards for broadcasting hardware, and to work out the policy for electromagnetic spectrum management.

III - The Regulation on Licensing of 1994

Before the MPTR was created, the licensing policy had been implemented by the FSTR in accordance with the Regulation on Licensing of 1994. This Regulation was adopted as a transitional measure to regulate broadcasting until the adoption of a law on television and radio broadcasting, specifically designed to regulate broadcasting licensing. This legal measure is still in force, although several legal contradictions occurred after the adoption of the Law on Licensing and some governmental regulations dealing with the licensing procedure.

All legal measures governing the broadcasting system are based on the provisions of the Law on Mass Media which is the only statutory basis for governmental acts in this regard. However, it fails to provide a comprehensive legal definition of "broadcasting", nor does it define the legal status of public, private, or state-run broadcasters. According to Art. 30 of the Law on Mass Media, a licensing body (namely the Federal commission on broadcasting) shall design and implement state policy for broadcasting licensing. It is important to notice that this Federal commission on broadcasting has never actually been created because of political controversies. Art. 31 granted the Commission the right to issue licenses at its discretion or to organize competitions among different applicants. Art. 32 stipulated the conditions for the revocation of licenses.

The 1994 Regulation on Licensing describes the general licensing procedures, lists the application requirements and explains the reasons for refusals. It also outlines the means that the regulatory body (currently the MPTR) may use to supervise licensees' activities and to ensure their compliance with the law. It establishes that only legal entities can apply to the regulatory body for a broadcasting license. Along with the application they must submit a registration certificate, which is required in advance by the regulatory body, as well as a number of documents proving their technical and financial qualifications. The regional legislation of the Russian Federation introduces some additional requirements (which, however, do not appear in any federal legislation) such as receiving an authorization from the municipal bodies, as is required by legislation in the province of Penza. However, according to the Russian system of legislation, regional laws may not contradict federal laws. Thus, if a discrepancy exists, the latter apply and additional requirements imposed by regional laws may be found illegitimate since they exceed the competence of the regional authority.

The Regulation on Licensing of 1994 was designed to implement the provisions of the Law on Mass Media and to set out in detail the licensing procedure. In accordance with Art. 30 of the Law on Mass Media, the Regulation on Licensing of 1994 authorized the FSTR to organize open competitions when several operators apply for one and the same frequency. The final decision should take into account the recommendations of a special Broadcasting Commission provided for by the Regulation on Licensing of 1994. This commission was convened regularly from 1995 to 1999, and the FSTR generally relied on its conclusions and followed its recommendations. Neither the Law on Mass Media nor the Regulation on Licensing of 1994 detail the procedural aspects of licensing.

Concerning the ownership of broadcasting licenses, the Regulation on Licensing of 1994 is the only piece of Russian law imposing specific restrictions on the award of a broadcasting license. Point 13 of this Regulation prevents a legal entity from obtaining "a television and/or a radio broadcasting license for more than two broadcasting channels covering the same territory, if the zones served overlap completely, or for more than two-thirds of each zone, unless an existing law of the Russian Federation stipulates otherwise". However, this provision neither clarifies the use of different bands (AM, FM, SW, MW, etc.) by the same station, nor restricts any cross-ownership between broadcasting and press, thus making it hard to prevent a possible violation.

At the same time, this provision reflects Art.10 of the Law on Mass Media requiring the founders to inform the regulatory body about the other media outlets "in which the applicant is a founder, owner, editor-in-chief in the editorial office or distributor". However, as Art.10 of the Law on Mass Media does not stipulate any legal repercussions for an applicant arising from this data, this information has no effect on the decision to grant the registration certificate. Moreover, there is no specific antitrust regulation in regard to media, and the existing general antitrust framework is not applicable in this context.

The regional legislative bodies help to compensate for this legal omission by adopting their own antitrust regulations. For example, the 1993 Law on the Press and Other Mass Media of the Republic of Adygeya stipulated (Art. 9) fines and even revocation of registration certificates for media outlets that constitute a monopoly in the region. This sanction made it possible to apply Art.10 of the Law on Mass Media in an effective manner whenever the operator of more than two licenses can be considered a monopoly. Alas, on 1 August 2001 the Law was modified and the provision was deleted from its text.

Nevertheless, important definitions, such as the one of "broadcasting service", as well as a clear framework for the licenses' renewal procedure, are lacking in the Regulation on Licensing of 1994. This Regulation refers repeatedly to the "established" procedure, e.g. for license renewal, notwithstanding the absence of a document establishing the said procedures. At the same time, the Regulation itself did not comprehensively regulate the issue. However, despite its vagueness and incompleteness, the Regulation remained intact until 1998, granting the FSTR discretionary powers in the decision-making process.

The Federal Law on the Licensing of Certain Types of Activities of 1998 (Law of 25 September 1998 # 158-FZ) enacted a number of amendments to the former regulatory practice so far described. Several problems in regard to licensing procedures and conditions were resolved (though hardly successfully) for two years. The adoption in August 2001 of a new version of the Law on Licensing excluded the broadcasting activity from its application thus referring broadcasting regulation back to the old set of rules (1991 Law on Mass Media and 1994 Regulation on Licensing) that existed before 1998.

IV - The System of Broadcasting Competitions Established by the Decree # 698 of 1999

After the approval of the Regulation on the System of Broadcasting Competitions (hereinafter "the Regulation on Competitions") established by the Decree of the Government of the Russian Federation # 698 of 26 June 1999, the licensing procedure was modified by establishing the compulsory competition procedure for the award of broadcasting licenses in cities with a population of more than 200,000 inhabitants.

This new Regulation obliges the licensing body to publish an informational statement on the forthcoming competition in an official publication (currently, the Rossiskaya gazeta daily). The winner of the competition obtains both the license for broadcasting and the license for activities in the communications' field.

The adoption of the competition licensing procedure entailed the creation in 1999 of the Federal Competitions Commission (FCC), a separate body within the MPTR which aims to guarantee transparency and legal certainty in the procedure. The FCC consists of nine members, five of whom represent the executive bodies of the broadcasting and communications' fields (namely the MPTR and the Ministry of Communications), and four are specialists in journalism, law and media fields appointed by the MPTR. However, when the license is to be issued for the territory of only one province (subject) of the Russian Federation, the panel includes also representatives of the regional legislative and executive bodies, and the Russian President's representative in the region, thus comprising 12 members.

The FCC is primarily responsible for assigning frequencies and considering applications. Together with the technical and financial data proving the broadcaster's ability to fulfil his proposal, the FCC in making its decision considers mainly the programme concept, a document in which the broadcaster should describe the range of programmes and include a preliminary schedule. The FCC should thereby apply a set of criteria such as the audience's interest in specific programmes, the necessity of promoting socially-oriented programmes and programmes of primary public importance, the applicant's budget for the equipment, its technical characteristics and the availability of a vacant frequency.

However, the main criteria for the evaluation is the level of uniqueness inherent in the programme proposals, and the applicant's ability to pay the license fee announced by the Ministry two months before the competition. According to paragraph 6 of the Regulation on Competitions, the amount of the fee depends on how much the regulatory body spends on technical preparations, the maintenance of the frequency and the organization of the competition. Other features of the broadcasting market, such as the predicted volume of advertising revenues and the population density of the territory covered by the frequency, are also taken into account. The revenues from the fee are distributed between the Federal Treasury (60%), the MPTR (20%), and the Ministry of Communications (20%). In practice this sum ranges (mostly reflecting the audience reach) from 1,000 up to 30,000,000 rubles (1 Euro equals about 35 rubles).

The provision on license fees was first proposed by the FSTR and the Ministry of Communications and later adopted by the aforementioned Governmental Decree # 698 of 1999. It was justified by the necessity of preventing those who are financially unable to maintain broadcasting operations from participating in the competitions. According to the Ministry's officials, the amount of the license fee would not exceed the broadcasters' payments previously required for finding the frequency on their own (namely, the amount that broadcaster would pay for the special expertise required to find an additional frequency in a region where no frequency is currently available).

This procedure lacks established criteria for the FCC to assess the broadcasters' technical, financial and programming proposals. It is difficult to predict the volume of capital necessary to maintain a station for several years and financial instability in Russia hinders the establishment of guidelines for broadcasters' business plans. In addition, the opinions of the commission members on some of the listed criteria are naturally quite subjective, while the Ministry hesitates to articulate any priority among the different criteria. For example, the FCC shall promote "socially oriented" programmes but no legal instrument defines what they are. While the commission, in practice, usually considers public affairs, cultural and children's programmes as part of this category, it has not yet established any formal definition.

V - Specific Aspects of the Licensing System

a) Programme Policy according to the New Licensing Procedure

In preparing the programme policy as part of their applications, the broadcasters should classify the proposed programmes according to several categories in accordance with the guidelines given in the Ministry's advisory memos. As the latter only vaguely describe the criteria for classification, individual broadcasters might interpret the memos differently because of differing perceptions of programme category descriptions. Further, when filling in the general form of the programme concept, only the ratio of foreign and national programming, as well as the share of programming produced by the broadcaster itself is stated with certainty. Without a specific classification blueprint it is difficult to use a standard form for the application, and this complicates the task of the FCC. Using a universal standard programme description form could enable the FCC to streamline the method of comparing proposals on both qualitative and quantitative bases, while in the absence of such a standard the FCC has to make its judgment relying on the subjective perceptions of its members. The absence of a classification blueprint hinders the procedure for frequency assignment and creates tensions between regulatory bodies and broadcasters. The vagueness of programme concept of a Moscow radio station "Klassika" allowed it to change format from classical to popular music without violating certain provisions of the programme policy. During the administrative hearings FSTR's attempts to impose sanctions on the broadcaster failed because the programme policy did not detail the music styles and allowed the licensee freedom of discretion.

On the other hand, the adoption of a general set of comparative criteria, which are predominantly subjective, is an incredibly difficult task. The legal weight of the proposed programme policy had been reinforced in 1999 by a FSTR decree, so that a violation of the programme policy terms is equally as serious as a breach of other license requirements, such as the technical characteristics of broadcasting or the statutory prohibitions of existing legislation. Now, since the programming schedules are changed regularly by most broadcasters (especially on radio), the Decree is able to restrict sufficiently the broadcasters' operations since they are obliged to apply for license modifications whenever they decide to alter their programme schedule. The Decree also adds new documents to the list of those to be provided in order to obtain a license (previously approved by the Regulation on Licensing of 1994). However, the Regulation on Licensing of 1994, which has legal priority over the FSTR Decree, allows for additional requirements (such as the professional level of the applicant or the technical facilities for the activity) that are not relevant to the programme policy.

The recent practice of the Ministry has revealed serious problems in applying the existing rules: e.g., point 13 of the Regulation on Licensing of 1994, renders illegal the transfer of a license to another person without the permission of the regulatory body (as does Art. 31 of the Law on Mass Media) but it does not however provide a definition of such a transfer. In the MPTR’s view it implies a change of the legal entity holding the license but it is still unclear if reorganization of such entity could fall under this offence. At the same time, governmental Decree # 698 contains no stipulation for the possibility of transferring licenses at all. Under the provisions of the Law on Mass Media, the concession of licenses as such is apparently acceptable. The Law on Mass Media, however, has priority over the existing governmental acts.

In the licensing procedure established in accordance with the Regulation on Competitions, the MPTR underlines its intention to conduct competitions from among programme concepts that emphasize non-profit goals (e.g., children's or educational programmes) with a reduced or zero fee. The Ministry determines the type of the concept based on its research into the audience and the market. However, this plan requires a detailed definition of a "programme concept" because the latter becomes for the FCC the only useful criterion in such competitions. This practice remains infrequent as there are few companies in Russia ready to sustain such non-profit broadcasting and because most competitions have stipulated freedom in the determination of the programme concept.

b) Renewal of Licenses and their Refusal in the Case of a Breach of Law

The license renewal procedure remains the most controversial aspect of the broadcasting regulation since 1991, when the first licensing Commission was established in Russia. It was an advisory body created within the Ministry of the Press in accordance with the Decree of the Government of the Russian Federation of 26 September 1991 (# 500) (repealed by the government's Decree of 7 December 1994 (# 1359)). The Law on Mass Media does not contain any provision dealing with this procedure and the Regulation on Licensing of 1994 refers to the "established" order for a license renewal and recommends the FSTR "to take into account the audience's opinion on the programming quality" of an incumbent broadcaster. Since the problem of non-renewal arises mostly when several competitors apply for the same frequency occupied by the former broadcaster for several years, that situation fell under the jurisdiction of the broadcasting commission in accordance with point 6 of the Regulation on Licensing of 1994. However, the FSTR was not obliged to follow the commission's advice for the final decision, and thus had the discretion to avoid any "established" renewal procedure. “Automatic” incumbent license renewal becomes an ordinary practice of the MPTR though formally there is no legal authority for the Ministry to do it.

According to the Law on Mass Media in the case of a violation of the rules, the regulatory body may issue a written notification as a formal notice of noncompliance. Such serious sanctions as license revocation could be imposed only after the issuing of a written warning (Article 32). The issuing of a warning by MPTR seriously jeopardizes the broadcasters' future as it apparently leads to a loss of the automatic renewal of licenses. That notification usually includes the requirement to cease violations and further desist from the unlawful practice. Moreover, such a formal notification could result in more serious sanctions including revocation of the registration certificate or withdrawal of the license (Art.16 and 32 of the Law on Mass Media). In cases of continual violations the Law on Mass Media allowed a licensing body to act at its own discretion. The Law on Mass Media allows the withdrawal of licenses on the grounds of the "violations of licenses' terms and conditions" (Art. 32); among these are submitting false information in the application and failure to meet license conditions. One of the main requirements is the broadcaster's strict "adherence to all applicable law".

VI - The Consequences of the Conflicts between the Different Legal Acts and the Need for a New Regulation of the Field

The above-mentioned contradictions led to serious conflicts when the Ministry refused to renew the license of the Moscow-based TV channel TVC in spring 2000, after two written warnings during the previous broadcasting period. The first warning was for a violation of electoral regulations in December 1999, the second for a change in the company's address without formal notification to the licensing body. In May 2000, TVC appealed to the Moscow City Court of Arbitration, which found the official warnings void. Since then, numerous petitions claiming to overrule the MPTR's decisions have been filed in the courts, but TVC remains the only broadcaster that has managed to win a court ruling declaring a written warning issued by the Ministry to be illegal. Later, the Ministry claimed that the very occurrence of a reason for issuing a warning presented sufficient evidence of violation, regardless of the subsequent outcome of the court litigation.

VII - Conclusion

Notwithstanding the attempts of the Russian legislature in the early 1990's, a specific act on broadcasting licensing has still not been adopted. The main legal basis for the regulation of the broadcasting system remains the Law on Mass Media of 1991. The subsequent adoption of further legal instruments, such as the 1994 Regulation on Licensing and the 1999 Regulation on Competitions, entailed some problems of discrepancies and contradictions between the different acts. According to them, the federal regulatory bodies are entitled to develop policy in the sphere of broadcasting regulation including the methods and the procedures for licensing. The principal contradictions between the provisions of statues and regulations should be eliminated by careful analysis of the enforcement practices with a view to ensuring conformity between the existing requirements. Some recent positive developments, such as the adoption of a competition procedure and the introduction of transparent procedures for licensing, require a legally correct and comprehensive codification and practical solutions for possible conflicts.

(October 2003)