Creative Regulation Undoes Broadcast Licensing

Michael Hedges July 9, 2012 - Follow on Twitter

Broadcasters often view media regulators as slightly less interesting than accountants. Always quoting the rulebook does not make good cocktail conversation. But these oracles of law and order can have a creative side… in a manner of speaking.

Budapest local radio station Klubrádió attracted a fair amount of international attention last year when the Hungarian media regulator denied renewing a frequency license. Pressure and court rulings notwithstanding, that hasn’t been resolved. In a second frequency allocation ruling the regulator again showed its creativity.

The Media Council of the National Media and Infocommunications Authority (NMHH) ruled invalid (July 5) all applications for three Budapest FM frequencies designated for commercial radio broadcasting. In January the Media Council awarded the 95.3 MHz frequency to a new operator, Autórádió, at the expiry of the Klubrádió concession, seven years initially plus a five-year automatic renewal. The Metropolitan Regional Court invalidated that award on a technicality – yes, spelling errors - and told the Media Council to try again.

So with the Autórádió application off the table the Media Council invalidated the Klubrádió renewal application for the 95.3 MHz Budapest frequency because, it said, each page of the 215-page application were not numbered and signed. Klubrádió managing director András Arató protested, showing a video of the application with page numbers and said he’d be, yet again, going to court. So the Media Council took the only logical course and scrapped the entire frequency tender.

Klubrádió has continued to operate on the 95.3 MHz frequency as well as FM frequencies in several cities. It had used a second frequency in Budapest – 92.9 MHz – but lost that in the well-reported Media Council decision. Voices in the European Commission, European Parliament, Council of Europe and OSCE rounded on Prime Minister Viktor Orban and his government for abridging the rights of the locally owned opposition news radio station, without checking to find that it’s mostly a music station with several talk shows.

Those same voices were resolutely silent two years earlier when the two national commercial radio channels were denied renewal in a tainted tender process that granted concessions to companies with strong links to the two major political parties. The two foreign owners – Emmis International and Accession Mezzanine Capital – won lawsuits in Hungarian courts only to have action dismissed because the Hungarian Parliament, controlled by PM Orban’s political party, dissolved one media regulator and formed a new one with direct political power. Both are still pursuing remedy, now through the World Bank’s International Center for the Settlement of Investment Disputes (ICSID).

Things haven’t worked out so well for one of the new national commercial radio broadcasters. The NMHH threatened the owners of NeoFM, formerly Slager Radio owned by Emmis International, with closure for non-payment of franchise and transmission fees and even offered to negotiate payment terms. The owners countered by filing bankruptcy, saying their revenue suffered because government advertising was being funneled to competitor Class FM, formerly Radio Danubius owned by Advent. The NMHH called the card (June 20) and cancelled the franchise. The owners were given 30 days to appeal.

So out of the blue, so to speak, came “a law firm backed by US investors,” reported daily newspaper Népszabadság (July 7), to buy NeoFM for the symbolic one florint and assume HUF 600 million (about €2 million) in debts to the NMHH. The law firm, which was not identified, also provided a €500,000 bank guarantee. Any transfer would require NMHH approval. And they could do something creative.

See also in ftm Knowledge

Europe’s Radio – Eastern Europe

Eastern Europe’s radio writes new rules. In fact, most everything about radio in this region is new... and changes often. The ftm Knowledge file reports on Belarus, Bulgaria, Czech Republic, Hungary, Moldova, Poland, Romania, Russia, Slovakia and Ukraine. 102 pages PDF (June 2011)

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