A New Era In Radio And Television Broadcasting

After the enactment of Law No. 6112 on the Establishment of Radio and Television Enterprises and their Broadcasting Services (the "New Broadcasting Law") on 3 March 2011, the Radio and Television Supreme Council (the "RTUK") commenced work on the drafting of new regulations that needed to be issued within the scope of the New Broadcasting Law. The pace of drafting accelerated in May and June, and a total of ten new regulations¹ were issued to replace their former versions.

Among these newly enacted regulations are two that are particularly important because they are directly related to the media service providers. The remainder are mainly concerned with RTUK's internal structure and the basic principles of television and radio broadcasting, in terms of content and the technical aspects of broadcasting.

Of the important new regulations, (i) the Regulation on Administrative and Financial Conditions Applied to Media Service Providers, Platform and Infrastructure Operators, published in the Offi cial Gazette dated 15 June 2011 and numbered 27965 (the "Regulation on Administrative and Financial Conditions") aims, among other things, to dispense with restrictions regarding the shareholding structure of media service providers in line with the New Broadcasting Law, while (ii) the Regulation on Annual Frequency Usage Fees Applied to Radio and Television Institutions for Terresterial Broadcasts, published in the Offi cial Gazette dated 29 April 2011 and numbered 27919 (the "Usage Fee Regulation"), details the new "usage fee" that was a concept introduced by the New Broadcasting Law.

Regulation on Administrative and Financial Conditions

The New Broadcasting Law revisited the foreign shareholding restrictions applicable to media service providers. The law made an attempt to loosen foreign shareholding restrictions and to provide media pluralism and content diversity by preventing a concentration of media ownership. However, the drafting of the provision regarding foreign shareholding restrictions under the New Broadcasting Law is vague and leaves too much room for interpretation.

The New Broadcasting Law states that "the direct foreign shareholding capital contribution cannot exceed 50% of the paid-in capital. A foreign real or legal person may become a direct shareholder in a maximum of two media service providers."

Neither the Broadcasting Law nor the Regulation on Administrative and Financial Conditions clarifi es how the above-mentioned restrictions will apply in the case of an "indirect" shareholder. The Regulation also basically recites the Law. While a literal reading suggests there are no longer any limits to indirect shareholdings that go above 50%, the matter should be approached with caution.

While explaining the general shareholder concentration restriction (applicable to all shareholders – not only to foreign entities) permitting shareholding in four different entities, both the New Broadcasting Law and the Regulation on Administrative and Financial Conditions refer to "direct" and "indirect" shareholding separately through the wording, "a real or legal person may be a direct or indirect shareholder in a maximum of four media service providers that provide terresterial radio and/or television broadcasting services." Neither the New Broadcasting Law nor the Regulation on Administrative and Financial Conditions clarifi es the questions on indirect shareholding as per the limit of 50% in one media service provider entity, even though this matter has been brought to the attention of RTUK many times through questioning. Thus, it may be argued that RTUK has deliberately refrained from clarifying the foreign shareholding restriction in the event of "indirect" ownership, in order to retain for itself some discretion and room for maneuvering.

Annual Usage Fee Regulation

The New Broadcasting Law also introduces another new topic of debate as to how the usage fee will be calculated and collected, and how it will be applied to media service providers throughout Turkey who operate on different fi nancial scales.

The main point of discussion point is that if an identical or similar usage fee is applied to all media service providers regardless of their fi nancial status and infrastructure, it would most likely hurt local and smaller providers, since they may not be able to afford such usage fees. In this respect, media market pluralism may be negatively affected. This debate ended when the Usage Fee Regulation entered into force in April 2011. The new regulations set forth a complex method of calculating the usage fees by taking into account many variables, such as the emission power of the relevant media service provider, the number of people within the coverage area, as well as the development level of the city where the media is broadcast, in addition to an annual co-effi cient determined at the sole discretion of RTUK. In this respect, the calculation of the usage fees has a number of criteria that enable media service providers to pay according to their capabilities.

Immediately after the enactment of the Usage Fee Regulation, RTUK collected the fi rst installment of usage fees in July 2011 that totalled TL 14,000,000 from media service providers who broadcast radio and television programming via terresterial transmitters. Taking into account the total amount paid to RTUK as the fi rst installment, we assume that this will be one of the more signifi cant revenue items for RTUK.

Tender for Terresterial Broadcasting License

RTUK commenced its preparations for frequency planning in order to open a tender for terresterial television and radio broadcasting licenses. To this end, in March, 2011, RTUK organized a tender for purchasing technical services from private software developers and frequency planners. In this respect, the objective of RTUK is to complete frequency planning by 2012 and to redistribute terresterial broadcasting licenses to media service providers in 2012. The Turkish media sector is at the brink of a material change as we enter 2012.

Footnotes

^{1 Eight of the new regulations pertain to licensing and other requirements applicable to broadcasting entities, such as: the Regulation on Administrative and Financial Conditions; the Usage Fee Regulation; the Regulation on Commercial Communications Revenues; the Satellite Broadcasting Regulation; the Cable Broadcasting Regulation; the Regulation on the Cancellation of the Regulation on Copyrights; the Regulation on the Cancellation of the Regulation on Closed Circuit Radio and Television Broadcasts; and the Regulation on the Cancellation of the Regulation on IPTV Licenses. The two remaining new regulations, namely, the Regulation on Examinations Applied to RTUK Experts for Admission, and the Regulation on the Disciplinary Principles of RTUK, concern internal administrative procedures of RTUK.}

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