The Enabling Environment For Free and Independent Media
By Monroe E. Price & Peter Krug
Chapter 2: Structures of the Media and the Enabling Environment
One might ask which organizational or structural forms for particular media sectors (television, radio, and the print media) help to advance most effectively the development of democracy or prove more consistent with stable democratic institutions? At least three principal regulatory forms have evolved during the history of the print and broadcast media.
The first regulatory form is state monopoly ownership and media control. State authorities directly supervise the media system and no voice can be heard without the permission or consent of the state.
The second is called a public or public service monopoly. In this instance, the media (usually the electronic broadcasting system) is in public, not private hands; but the governors of the system enjoy substantial autonomy and are not under the direct rule of the Executive or Legislative branches of government.
Finally, there is private ownership, usually accompanied by some degree of state regulation, the amount of such regulation varying from state to state and from cycle to cycle.
More and more, these three systems overlap substantially and come in various combinations. Although there have been (and continue to be) some cases of pure state monopoly; pure public service monopolies have become rarer, while increasingly mixed systems have arisen in which there are both private and public broadcasters.
2.2 Balance between Private and Public Service Media
What is the most desirable mix of private and public service media? One frequently asserted view is that the principal goal should be a competitive privately owned media with low market entry hurdles. But all but the most ardent of advocates of a private sector recognize a retained and important civic function for public service broadcasting.
Different societies have had different starting points. In the United States, the market has been the main arena for mass media development, and public service broadcasting is designed to compensate for “market failure.” In Europe, public service broadcasting has been the base, and the private sector evolved to provide effective competition and opportunities for new and different voices (not the least of them commercial ones).
The Internet is viewed as a possible ideal: an infrastructure that allows rapid and inexpensive access for any political party or point of view. It approaches an ideal because it can provide communication among citizens with each other and by groups to individuals, a system of communication and interconnection that will complement and enrich a formal structure of democratic practices.
But patterns of broadcasting and the introduction of new technologies have demonstrated that relating the media to democratic practices is more complicated than summarized above. There have been societies that have had a publicly financed monopoly broadcasting entity that helped to fuel strong democratic practices. In very rare instances, and the BBC was one of these, an autonomous public service broadcaster was created in the sense that it was not answerable to the government. The BBC was not only allowed editorial freedom, but also strived to ensure that many viewpoints in the society were given voice in the broadcasting program. Increasingly however, the growth of private media is seen as a critical aspect of developing a media structure that advances democratic values.
In post World War II Germany, societal goals were served by an elaborate structure with committees representing many interests in society and a federalized public service broadcasting system established on a federal, rather than unitary, basis. A system was evolved under Occupation that melded elements of the European and U.S. approaches. Here, too, pluralism was built into the system and there were guarantees in the very architecture and design to forestall a monopoly state voice. The German Federal Constitutional Court developed a unique idea: Article 5 of the Basic Law requires that the German broadcasting system, as a whole, fulfil a public service mission. Either public or private broadcasters can fulfill this mission. However, since private broadcasters depend on market revenues, it is presumed that they are less likely to fulfil the public service mission, and imposing strict public service obligations on them would endanger their existence. Therefore, private broadcasters in Germany are only allowed to operate as long as the public broadcaster offers a basic service.
The ideal public service monopoly is often hard to achieve. Throughout the world, state-controlled monopolies are difficult to transform into public service, autonomous, independent, and pluralism-serving democratic institutions. Generally, societies that have moved away from authoritarianism somewhat on the path to democracy have had to cope with just such transformations of a government monopoly broadcaster. This has taken several forms: a) maintaining the state broadcaster, but permitting significant private competition; b) privatizing the state broadcaster, in whole or in part, as well as permitting competition; c) moving the state broadcaster more to the public service, autonomy model.
Very few post-Soviet or transition societies have decided to abolish the pre-existing centralized broadcasting institutions. Often these institutions are seen as too important in generating national identity, or merely as a useful tool of the new incumbents. In some places, the state broadcasting entity is partially privatized, with state ownership diluted with stock provided to investors.
Much more frequent has been the opening of frequencies for new, often small-scale radio and television stations. NGOs, like Internews and the Open Society Institute, have been critical in making these new competitors better able to enter the market in a wide variety of contexts, from Central Asia to Indonesia.
These innovator private entities, often fostered as part of a distribution of power to the newly plural political interests, become harbingers of a free market, and often as they mature find themselves in joint ventures with foreign investors and larger media companies.
The right to receive and impart information does not wholly depend on the existence of a particular structure of media entities, though some principles of competition have evolved from this human right. For example, a state practice limiting competition even when there are available modes of affording it, such as a law preventing private radio to compete with a monopoly public counterpart could be a violation of human rights law.
The very structure of media in a country could also be important if a commonly held view is true: that competition among various media fosters increased competition among holders of conflicting and variegated ideas. Greater competition of media voices, under this view, yields a greater variety of viewpoints in the public domain and a greater sense, in the society, that various interests are effectively represented.
Those who fear great concentration in the media laud the positive effects of competition. In most cases, the existence of many owners is considered a guarantee that more views will be expressed. Structurally, this argument against the existence of a dominant private player is parallel to the claim that a controlling state media system weakens or bars the development of democratic institutions.
The economic rationale favoring increasing ownership concentration is simple: because of technology and infrastructure costs in the modern world of global communications, entry costs for companies wanting to participate in the information society are extremely high. Distribution costs are low. These are conditions that lead to rapid and increasing concentration in the telecommunications, media, and information industries.
There are three forms of concentration that are relevant to regulatory issues in the information society: a) horizontal concentration, for example, domination in the newspaper sector or among television stations; b) cross ownership that occurs between different media sectors, particularly print media and electronic media; c) vertical concentration that involves integration of different stages of the production and distribution chain. An example of vertical integration is the ownership of broadcast channels and services and control of the means of distributing them. The convergence of media is reducing the distinctions that made cross ownership a viable concept
Structural problems, such as the existence of great concentration in a nation’s media, are not immediately apparent in transition societies. Some states seem, at least in the short run, untouched by global developments towards concentration and control by transnational corporations. On the other hand, local monopolies and local versions of vertical integration are found in almost all states. As societies mature and as global corporations seek new markets, large international mergers will certainly affect national policies.
Issues of concentration yield several specific elements that are particularly threatening for media pluralism and access to information. Companies in control of distribution networks might use their position as “gatekeepers” to distribute information and program services of their own media group, thus limiting free access. If the state is in control of distribution networks, this is a matter of very substantial concern. Some think that operators of network infrastructures on which other program providers depend for distribution of their services to the public should not be allowed to produce their own programs and gain favorable access. Most global communications empires are now heavily vertically integrated. As a result, attention must be paid to techniques that provide assurance of fair access. A particular concern arising from concentration is whether there is room for the development of a local zone of creativity, with the capacity to build expertise in providing information to citizens. As more free market principles are introduced, there is also the need to assure, especially for telecommunications services and basic audiovisual services, that the goal of universal access is, at the least, enunciated.
Structural problems may be compounded where a state entity controls a key element in the information chain (for example, control of newspaper distribution or transmission facilities for broadcasting).
In terms of the actual application of law, the question often is whether general anti-competition laws in place within a society are sufficient to deal with competition within the media, or whether media-specific ownership laws should be created as well. In the United States, for example, generally applicable antitrust laws prohibit monopolies and anti-competitive conduct (except in a few limited circumstances). These laws apply, for example, to the steel industry and the automobile industry and can apply to print media, television broadcasting networks, or news bureaus as well. There is something desirable in ensuring that media entities are subject to such laws of general jurisdiction, recognizing that those who own the media can engage in the same kinds of anticompetitive and harmful practices as the manufacturers of light bulbs or computers.
But, in addition, the U.S. has enacted a number of media-specific ownership laws, premised on the idea that media are different, and that there are free-speech interests that demand a different way, a more specific way, of organizing or regulating media. A society might find a concentration of power in the field of speech more troubling than a concentration of power in a field with less consequence for democratic values. For example, for a long period, federal regulation extended to questions such as whether the owner of a newspaper could own a broadcaster in the same city, the number of radio stations one person or corporation could own (including the maximum number in one city), and the maximum permissible audience that one corporation could reach. The U.S. Congress and the Federal Communications Commission limited the number of local stations that a major network could own and the ownership rights of such a network in the programs that it distributed. All these laws have been undergoing change in the United States, but they are testimony to a notion that the media sometimes warrant specific ownership-related attention.
In a recent study of Uruguay, Faroque Barone argues that, there, tight anti-competitive practices among the owners of the dominantly private press helped block the development of a public forum. Not only are there few owners, and not only do agreements among them control the limits of the news, but, he claims, these owners are closely tied to the government. Furthermore, the state-financed public service broadcasting sector is disadvantaged vis-a-vis its stronger private competitors in funding, program scheduling, and access to high-quality programming. Public service broadcasting in Uruguay thus remains too weak to adequately complement the offerings of the private sector.
The Council of Europe has recommended that not only should there be a public service broadcasting sector, but it should be protected through the rule of law. The legal framework governing public service broadcasting, in the words of the recommendation, should,
[C]learly stipulate their editorial independence and institutional autonomy, especially in areas such as:
·
The definition of programme schedules;·
The conception and production of programmes;·
The editing and presentation of news and current affairs programmes;·
The organisation of the activities of the service;·
Recruitment, employment and staff management within the service;·
The purchase, hire, sale and use of goods and services;·
The management of financial resources;·
The preparation and execution of the budget;·
The negotiation, preparation and signature of legal acts relating to the operation of the service.1
There are a significant number of transition societies where too much media ownership is concentrated in the state and/or in the hands of private interests closely tied to the state. Throughout Central Asia, even where private and independent broadcasters were allowed to spring up, the real power lay with state broadcasting and those private entities associated with the government. Structures should be examined to see if media companies, print media, and television stations are still connected to the state through family or other relationships. An enabling environment study takes such factors into account when studying reform policies.
In many of transition societies, there are vital questions about the legal environment for increasing private ownership of the media. These include questions of how much spectrum space will be allocated to private broadcasters, how that spectrum will be awarded and who will have the most powerful transmitters. Each of these decisions may have profound consequences for the ultimate structure of the electronic media. Government can allocate and distribute spectrum in a way that underscores scarcity and can lead to a high level of concentration. Spectrum assignment can mean an ultimate system that is limited to several national stations. An alternative approach may lead to many local stations or even local competition. Rules concerning how and when licenses can be transferred are a factor in determining whether a decentralized and competitive industry has the potential to survive. Whether one approach or the other fosters pluralism and stronger democratic institutions turns on many circumstances, including demography, requirements imposed on the media, and the relationship between regional and national centers in the constitution of politics.
A set of recommendations of the Council of Europe asserts the importance of “the existence of a multiplicity of autonomous and independent media outlets at the national, regional, and local levels generally” because it “enhances pluralism and democracy.” The Council also maintains that “political and cultural diversity of media types and contents is central to media pluralism.” As a result, the Council’s Committee of Ministers recommended that members of the Council “evaluate on a regular basis the effectiveness of their existing measures to promote pluralism and/or anti-concentration mechanisms and examine the possible need to revise them in the light of economic and technological developments in the media field.”2
The Council has also urged what is called “transparency.” Because “pluralism and diversity are essential for the functioning of a democratic society,” the Council of Europe has recommended that “members of the public should have access on an equitable and impartial basis to certain basic information on the media so as to enable them to form an opinion on the value to be given to information, ideas, and opinions disseminated by the media.”3
One area of ownership restriction that is quite common is restrictions on foreign ownership. It is interesting that such restrictions, at least on terrestrial radio and television broadcasting, are frequent, not only in transition societies, but in the West, including the United States. Fear of foreign ownership goes back to the wartime fear that radio and television could be and are used for propaganda purposes. There is also the assumption that citizens or corporations controlled by citizens are easier to supervise in time of national crisis than those owned by foreign interests. Ownership of the media remains one of the most consistent bastions of xenophobia, partly based on the assumption that foreign owners are likely to program a channel differently from their domestic counterparts.
In some transition societies, however, foreign voices are extremely important as a means of leavening what would otherwise be a retained government monopoly or a narrow range of domestic points of view in the media. Pluralizing opportunities for external programming is increasingly possible because of new technology, including satellites and the Internet. But the capacity of foreign investors to own radio and television stations or printed media press can be important in yielding diversity as well. Many countries that prohibit foreign control of terrestrial broadcasting permit greater investment and control of cable television and most allow foreign ownership of print media. India, on the other hand, has been one of the major democracies to prevent foreign ownership of newspapers, though, even there, the restriction has been called into question.
2.5 Media Ownership by Religious or Political Organizations
Some societies prevent religious organizations, political parties, or government agencies from owning radio and television stations or newspapers. In others, often those that are in an early stage of transition, channels of communication are controlled, directly or indirectly, by these very entities. As media channels become more and more abundant (through satellite and cable and transfer to digital broadcasting), restrictions on ownership may become less important.
These restrictions represent retained (and possibly justified) fears about the dominance that can be achieved through control of mass communication instruments. Ownership rules may reflect historic concerns where there has been a radical break from an authoritarian past, or reaction to former modes of control and influence. These ownership rules may specifically deny ownership or control to institutions that were once dominant
In some instances, it is precisely where religious influences have been so strong that restrictions on sectarian ownership of stations might be prohibited. Where a society is emerging from a statist, authoritarian regime, a reaction may be to swing wholly toward private ownership. In other instances, however, the new society often has derivative forms of the old, as where new government institutions stand in the stead, though now with more democratic purposes, of their predecessors.
2.6 Viewpoint Domination by a Single Broadcaster or Owner
Another mode of structural regulation, relevant to the enabling environment, is the extent to which any single broadcaster or owner of licenses can reach large segments of the population. If the goal is to have competition and many voices, it is also important to have some sort of end game vision. What if the result of privatization is that there are two remaining broadcasters and that the stronger of the two gains 70 percent of the audience? That may not necessarily be inconsistent with democratic norms, but such a dominant position should raise alarms. A government committed to a competitive and independent media structure must have the tools to define and enforce an explicit model of the role that broadcasting and the press should play. An enabling environment analysis would ask not only about concentration but whether the state voice is controlling and what pattern exists for access by minority and opposition views within the society.
Many of these questions arose in the consideration of a revised media ownership law for Russia. A draft law was prepared that had limitations on the extent to which one company or interrelated group could own stations that reached too high a percentage of the Russian audience. On the other hand, much of the criticism of the Russian broadcasting structure was that industrial groups, including banks, oil companies, and other natural resource corporations, controlled most major components of the media. From an enabling environment perspective, one important question was whether the stations were independent of the government. Even though they were privately owned, the condition of their ownership and the relationship of the owners to government, meant that “independence” was a difficult status to achieve.
Indeed, the very importance of a major conglomerate, owner of the independent television network NTV, meant that government efforts to enforce tax or other laws against its owner could credibly be interpreted as an attack on the press in general. Concentration meant delicate relationships that were hard to untangle.
Even there, however, it could be said that there was competition of a sort: industry was organized into an oligarchy, with several powerful groups. There was competition among these groups and, as a result, among the broadcasting empires that they controlled. A media that is tightly controlled by an oligarchy of industrial and banking interests may not, however, serve other aims that lead to stable democratic institutions. Citizens may perceive a lack of opportunity to use the media for change if the media are deemed oligarchy-controlled. One response to this situation may be to facilitate the development of strong competitors or tolerate the oligarchical approach, but prohibit anticompetitive or abusive practices.
It is virtually impossible to obtain a media structure in which every voice, every large-scale worldview has control of a significant broadcasting enterprise. Since this state is unrealistic (except maybe in the idealized world of the Internet), premising a set of enabling laws for media reform on such an outcome would be deceptive. There will always be strong broadcasting enterprises in a society and because of the costs of broadcasting successfully, the pressures toward consolidation often seem irrepressible.
2.7 Access and Right to Impart Information
For these reasons and others, some states’ enabling environments include structural approaches that seek to assure access or other opportunities to exercise a right to impart information. For example, a privately owned station may have a rule-based government obligation to provide time for all political candidates at the time of an election or to set aside time for minority groups in the society to promulgate their views or present cultural or other programming. Similarly, a state may require a cable television operator to carry the public service broadcasting stations or the stations of particular groups, including minority voices, to enhance pluralism.
There are those who consider these kinds of “structural” regulations more consistent with democratic goals and less intrusive than content regulation, regulation that turns on the nature of particular communications. The general idea is that if competition and independence can be achieved through these basic organizing rules, then progress toward the goals of pluralism and recognition of various political viewpoints will be enhanced.
Structural regulation does not require government, generally, to make invidious interventions, deciding whether certain programming is fair or not fair or whether certain political viewpoints have been adequately expressed. These issues are dealt with, at least abstractly, by the theory that supports a diversity of owners (or, a diversity of voices through rules designed to guarantee access to media outlets) as one of the most important ways to reinforce democratic institutions.
Policies and practices regarding subsidies are also factors in an enabling environment study. Governments may appear to have, formally, a neutral approach to particular speakers, but through the use of financial support (sometimes hidden) render one group or one medium far more powerful than others. Discriminatory access to a monopolized distribution scheme is one method that can be used for this purpose. Favored accreditation for compliant reporters is another.
There are a thousand tricks or devices. Costly duties on newsprint or computers can have a substantial impact on the capacity of independent media to develop. States can discriminate in terms of access by students to the gateways of the profession: universities, training programs, and travel abroad. States can interfere with access to transmission facilities by media that are too independent or engage in surprise audits or other forms of harassment.
In harsh economic circumstances, the way government allocates newsprint or access to printing facilities may be a strong determinant of power within the society. Miklos Haraszti, in his book, The Velvet Prison, describes how benefits to favored journalists (membership in clubs, apartments, or trips abroad) served to enhance a kind of control that was as invidious as censorship.
2.9 Government as a Market Participant
More comprehensive and systematic modes of using state power to structure the media are also often present. The state can use its purchasing power to place advertising only with those media that are supportive, and the state’s advertising budget may dwarf that of any competitor. Or state broadcasting may use its subsidized position to undercut private media in the market for advertising, rendering it difficult for free and independent media to develop. In late 1999, for example, the Croatian National Parliament House of Representatives voted to allow the state broadcaster to expand the number of advertising minutes it was permitted to sell. The advertising market was limited, and if the amount of advertising in the society is limited, then enlarging what the public service broadcasting entity can do might harm its private competitors. That argument led critics to claim that the move would «suffocate» commercial television by depriving it of revenue.
The question of the role of state television or public service broadcasting is frequently important in assessing the enabling environment for media reform in transition societies. For example, the very mode of financing such a broadcaster is vital. Two years after the handover of Hong Kong to China, legislators called for more permanent funding of Radio Television Hong Kong (RTHK) to assure that it would not have to seek year to year financing from the government of what was now the Special Administrative Region.
Some believe that a media entity that is funded through a license fee, paid by each user of a receiving set, is likely to possess greater autonomy and independence than one that is funded entirely by the government. However, such license fees are increasingly under attack as the state or public broadcasters rely, as well, on advertising revenue or otherwise engage in commercial activity. Private competitors complain that this creates an “uneven playing field,” as they struggle against entities that have access to commercial profits as well as government support, government promotion, access to government information, and government subsidies. Some countries have re-thought their support for television possibly in response to such complaints. In November 1999, the government of Spain announced that it would change the financing of Television Espanola. The state budget would only cover the TVE operations considered a public service, while its purely commercial activity will be left to the market
Some systematic structural interventions occur when states have policies that shape media development. These kinds of interventions may be ubiquitous, and only in certain instances have deleterious impacts. For example, a state may determine that it wishes to preempt the market for multi-channel video distribution by investing billions in cable television on the assumption that cable is easier to control than direct broadcasting. A state may thus take the market away from competing multi-channel distribution where that could open up the competition to less controlled competitors.
One major point emerges. The media structure that results in any society (whether one that encourages a plethora of free and independent broadcasters and print media or one that places emphasis on the state broadcaster like the BBC) is usually not an accident. It can be a matter of evolution or it can be a purposive, significant element of design. It is a characteristic of most transitions that each step is a movement from one set of media structures to another. These are windows of opportunity, moments to think through what kind of media the society needs. These are moments when those within and without the society develop laws that partly establish whether the transition proceeds from the current forms of media structure to ones more consistent with democratic society.
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1
Committee of Ministers, Council of Europe Appendix to Recommendation No. R (96) 10, Guidelines on the guarantee of the independence of public service broadcasting Council of Europe, Committee of Ministers (Adopted by the Committee of Ministers on 11 September 1996).2
Recommendation No. R (99) 1, Committee of Ministers, Council of Europe, “Measures to Promote Media Pluralism” (Adopted by the Committee of Ministers on 19 January 1999).3
Recommendation No. R(94) (13) Measures to Promote Media Transparency, Council of Europe (Adopted by the Committee of Ministers on 22 November 1994).2000 ã.