Radio license dispute condemned by US Congress

Michael Hedges December 11, 2009 - Follow on Twitter

The dispute over national radio license renewals in Hungary, with suspected political intrigue, has spilled over to the United States Congress. Political and media watchers in Hungary have been surprised by international expressions of concern after US-based broadcaster Emmis International and Austrian investment fund Accession Mezzanine Capital lost license renewal applications. While both firms pursue legal remedies the political heat on the Hungarian government is rising.

The United States House of Representatives (lower chamber) passed a resolution (December 8) noting significant American investment in Hungary, questioning the transparency of the license award and asking the Hungarian to respect “rule of law” and “freedom of the press.” (See text of House Resolution 915 below)

After the non-binding resolution passed by a large majority, the Hungarian Embassy in the United States issued a statement saying that the radio license awards were conducted transparently by a regulator independent of political influence. Hungarian diplomats did not comment on charges by both broadcasters that officials from political parties had attempted to extract certain “gratuities,” the political appointment of the regulatory board granting the licenses (ORTT) nor the resignation of the ORTT president in protest. 

The radio station row appears to have caught Hungarian business, political and financial circles off guard, not expecting global financial agenda-leaders the Economist and the Financial Times to link Hungary’s miserable economic and political health, corruption and foreign investment worries to something as simple as giving a couple of radio licenses to political cronies. One of the successful license bidders, Econet.hu Plc CEO Csaba Balazs called the US House of Representatives resolution “outrageous,” reported index.hu (December 10).  “We are professional investors ourselves,” he said, “interested in an investment climate that makes Hungary an attractive investment destination.”

Both Slager Radio (Emmis) and Danubius Radio (Accession Capital) appear to be sticking around, migrating to internet radio.

H. Res. 915

In the House of Representatives, U. S.,

December 8, 2009.

Whereas, on October 23, 1956, some 100,000 Hungarian citizens began a nation-wide revolt against the Communist government of Hungary and its domination by the Soviet Union;

Whereas the Hungarian people fought bravely for freedom, democracy, and human rights;

Whereas, on March 12, 1999, the Government of Hungary, reflecting the will of the Hungarian people, formally became a member of NATO and on May 1, 2005, Hungary became a full member of the European Union;

Whereas the United States has invested over $9,000,000,000 in Hungary since 1989 and the United States is the fourth-largest contributor and largest non-European contributor to foreign investment in Hungary according to the U.S. Department of Commerce;

Whereas the Hungarian Investment and Trade Development Agency reports that foreign direct investment has been crucial in boosting Hungary’s economic performance and remains the driving force behind Hungary’s economic success;

Whereas in 1997, the Hungarian National Radio and Television Board (ORTT) awarded licenses for two national radio stations, which are set to expire on November 19, 2009;

Whereas the two licenses are the only ones that allow for nationwide coverage by commercial, rather than state, radio-broadcast services in Hungary;

Whereas one of these licenses was awarded to a United States company and the other to a European company, each for a total of 12 years;

Whereas the Financial Times reported on November 6, 2009, that before the bids for renewal of their national licenses were due, these companies were approached by individuals claiming to represent the Socialist and Fidesz Parties in Hungary offering to extend their licenses if the parties received 50 percent of the companies’ equity;

Whereas the Financial Times also reported on November 6, 2009, that both stations refused this alleged extortion attempt and the ORTT delegates from Fidesz and the ruling Socialist party voted to award the licenses to two politically-connected local bidders instead;

Whereas the Wall Street Journal reported on November 10, 2009, that Hungary’s Prime Minister and the Chair of the ORTT have publicly decried the process by which these licenses were awarded;

Whereas the Economist reported on November 7, 2009, that the Chair of the ORTT resigned in protest and refused to sign the politically-motivated contracts;

Whereas United States investors are an important part of the Hungarian economy and deserve equitable treatment in accordance with United States and Hungarian laws;

Whereas unfair treatment of foreign companies will deter investment and hinder economic growth in Hungary; and

Whereas respect for the rule of law and a free and independent press will spur investor confidence in Hungary:

Now, therefore, be it

Resolved, That the House of Representatives—

(1) condemns the recent action by the Hungarian National Radio and Television Board that awarded the national community radio licenses;

(2) encourages the Republic of Hungary to respect the rule of law and treat foreign investors fairly; and

(3) encourages the Republic of Hungary to maintain its commitment to a free and independent press.

(source: Clerk, US House of Representatives)

See also...

Europe's Media Rules

Media rule makers are taking strong positions on competition, State aid, public broadcasting finance and advertising. and that's only for starters. As the Audiovisual Media Services Directive takes effect, national rules are changing. Europe's Media Rules has all the background and latest developments. 80 pages PDF (June 2008)
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