Law No. 3984 on the Establishment of Radio and Television Enterprises and their Broadcasts, dated 13 April 1994 (the "Old Law"), was replaced with new Law No. 6112 on the Establishment of Radio and Television Enterprises that was enacted and came into force on 15 February 2011 (the "New Law").
While in our previous articles, we have generally focused on comparing the Old Law and the New Law (in draft form1 at the time), in terms of the foreign shareholding restrictions being relaxed to provide media pluralism and content diversity under the New Law, this article discusses the revised licensing regime – one of the New Law's most important aspects. This regime foresees a ranking tender for the allocation of multiplex capacity to media service providers, and imposes on media service providers the obligation to pay an annual fee for multiplex capacity usage.
Ranking Media Service Providers
Currently, all media service providers carrying out terrestrial broadcasting in Turkey enjoy de facto status, based on their application in 1995, and participated in a frequency allocation tender that the Radio & Television Supreme Council ("RTUK") subsequently cancelled upon the request of the National Security Council on the grounds that the tender specification issued by RTUK must require national security-related qualifications from the participants. Between 1995 and 2006, RTUK made one further unsuccessful attempt to launch a frequency allocation tender and, thereafter, RTUK halted work on organizing a tender, focusing instead on other broadcasting issues. Thus, today, media service providers who are active in the Turkish media market do not hold terrestrial broadcasting licenses, nor do they pay a licensing fee to RTUK in consideration for the use of frequencies.
Under Article 26, the New Law provides a certain level of clarity on this open issue. According to the relevant article, in order to participate in the ranking tender, a participant media service provider is to have been active as a media service provider for at least one year prior to the tender date, it must meet the criteria stipulated by the tender specifications and, further, it must obtain a sufficiency certificate from RTUK. There are currently 475 media service providers broadcasting on the national, regional and local levels in Turkey, and no clarity has been given regarding the criteria that the media service providers are expected to meet under the tender specifications. However, the media market expects that certain of the media service providers who provide broadcasting services on the regional and local levels will be disqualified at the first stage due to tender specification requirements, and even if they succeed in obtaining multiplex capacity, these small, local and/or regional media service providers will not be able to withstand the annual usage fee imposed by RTUK. Thus, the new licensing regime will eventually absorb the small media businesses in Turkey.
During the tender, the media service providers will bid for ranking and will try to maintain the ranking they have held since 1995. But, as we understand from the speeches made by RTUK members on the ranking tender, we understand that no privileges will be conceded to the media service providers enabling them to retain their existing ranks. At the end of the day, the ranking will be subject only to the financial offers of the participants.
License Fees and Terms
The New Law extends the term of the terrestrial licenses allocated, as a result of the tender, from five years to ten years. Every ten years, media service providers must renew their terrestrial licenses in exchange for a license fee that may be regarded as a one-off payment for ten years. If one of the multiplex capacities is vacated at the end of the ten year period, RTUK will re-issue a tender for such capacity. In addition to the license fee, the New Law provides an annual usage fee concept, the amount of which will depend on the coverage area (national/regional/local) transmission capacity, band or frequency, economic growth of the location in which the broadcasts are provided, together with other objective criteria.
The New Law basically provides the roadmap for the licensing regime, although the details remain uncertain. Media service providers are aware that a ranking tender for which they are expected to bid in order to maintain their ranks will take place every ten years, and for which privilege they will pay a license fee to be announced by RTUK, along with an additional annual usage fee for the use of the allocated multiplex capacity. Media service providers, in order to broadcast via satellite and cable, must obtain separate broadcasting licenses for each broadcasting media. Media service providers who wish to broadcast through different broadcasting environments simultaneously, will need to hold broadcasting licenses relating to each different broadcasting method. Media service providers will pay a separate license fee (one-off payment) for each of the satellite and cable broadcasting licenses, and these licenses will be valid for ten years, as well.
Conclusion: Room for Clarification
Although the licensing regime under the New Law may be analyzed at this stage, there is a degree of uncertainty as to when and how the ranking tender will be launched, and the criteria expected of participants to qualify remains unveiled. Likewise, the principles for determining the annual usage remain ambiguous, and will need to be clarified by secondary legislation, the enactment of which is expected within six months from the New Law's issuance in February 2011.
Footnote
1. The draft form of the New Law was passed with minor changes.
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