Introduction: the need for change
People involved in the media sector in Turkey have been clamouring for change in the current broadcast media legislation (to reflect recent rapid technological changes and to provide a foreign investor-friendly legislative environment) for some time now.
The main piece of legislation regulating the radio/television broadcasting sector in Turkey is the Establishment of Radio and Television Companies and Their Broadcasts No. 3984 (the Current Law) which entered into force in 1994. Since then it has been amended over 20 times to try and keep pace with changes in the broadcast media sector but these amendments were simply not enough. However, last month the Radio Television Supreme Council (the Turkish broadcasting sector regulator) published a Draft Law on the Establishment of Radio and Television and Broadcast Services (the Draft Law) on its website (www.rtuk.gov.tr ) which promises more comprehensive legislative changes. This article will provide an insight into some of the most significant proposed changes in the Draft Law.
The Draft Law is mainly based on the Directive 2007/65/ EC of the European Parliament and of the Council of 11 December 2007 amending Council Directive 89/552/ EEC (i.e. the Audiovisual Media Services Directive). On the other hand, many adaptations have been made to comply with the Turkish legislation during the preparations of the Draft and please note that other changes may yet be made before the Draft enters force.
Scope of application
The scope of application of the broadcast media legislation has been expanded. The Current Law is, in principle, only applicable for the broadcasts made from Turkey (i.e. the broadcasting signal erupts from Turkey). However, the Draft Law states that it is applicable if the broadcast is within the jurisdiction of the Republic of Turkey. Article 4 of the Draft Law sets out the circumstances where the Republic of Turkey has jurisdiction over a broadcast, which include:
- where the broadcaster has set up its main office (merkez büro) in the Republic of Turkey;
- where the Republic of Turkey is the place where the broadcaster makes its editorial decisions;
- where the Republic of Turkey is the principal location of the broadcaster's workforce; and
- where the principal place of the broadcaster's operations is first started in the Republic of Turkey and the business of the broadcaster is closely connected with the Turkish economy.
The direct impact of this extension in scope is that now more broadcasting companies (which broadcast inside or outside of Turkey) will fall within the scope of Turkish broadcasting legislation.
Foreign ownership limits
Critics of the Current Law pointed out that it was not creating an investor-friendly environment for foreign investors interested in the Turkish broadcasting market. Under the Current Law, foreign persons/legal entities can (i) hold a maximum 25 per cent of the shares of a broadcasting company and (ii) are only able to own shares in one such company. Although some attempts were made in the Turkish Parliament to relax these limits, all of these attempts eventually proved futile.
The Draft Law makes another attempt to relax foreign ownership limits by allowing foreign persons/legal entities to (i) hold a maximum of 50 per cent of the shares in one broadcasting company; and (ii) hold shares in a second broadcasting company. We believe the relaxation in these ownership limits, which is on the legislative agenda, will encourage foreign investors to take a closer look at the Turkish broadcasting market.
Turkey's transition to digital terrestrial television
An important novelty brought by the Draft Law is that it carefully regulates Turkey's transition to Digital Terrestrial Television (DTT). Some of the important terms about this transition are as follows:
- The Draft Law introduces many definitions related to DTT, such as "multiplex" or "multiplex capacity".
- The Draft Law clarifies the timing of the transaction and sets out the process of granting a DTT multiplex capacity by a tender (which only broadcasters that have been broadcasting for at least one year can take part in). The Draft Law sets out a six-month period (from the date the Draft Law enters into force) for DTT frequency plan and implementation schedule preparations, and the DTT tender will be made within one year.
- Current broadcasters are allowed to continue their analogue terrestrial broadcasts until the DTT tender, and some of the analogue terrestrial broadcasters that win the DTT multiplex frequencies will also be allowed to continue analogue broadcasts for three years following the tender (based on their ranking in the tender and their analogue capacity).
- DTT broadcasts shall start by two years from the grant of the relevant frequencies and all analogue broadcasts in Turkey will switch off within three years from such grant.
The date of enactment of the Draft Law remains a moot point, but the pressure is on as Turkey, as a part of the EU accession negotiations (under Chapter 10: Information Society and Media), has committed to unify its legislation with its EU counterparts by the end of December 2009. If the Draft Law is passed shortly, this should provide the legislative framework within which the Turkish broadcast media market can flourish in future years.
Guner Law Office was established in 1996 and has since grown into one of the major corporate, M&A, banking, litigation, energy and TMT practices in Turkey. Guner Law Office is headed by Ece Guner and works with international law firm Denton Wilde Sapte.
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