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‘On its face, Clarín proposal meets conditions’

Martín Sabbatella speaks to the Herald at his office in AFSCA last week.
Martín Sabbatella speaks to the Herald at his office in AFSCA last week.
Martín Sabbatella speaks to the Herald at his office in AFSCA last week.
By Federico Poore
Herald Staff

AFSCA head Martín Sabbatella has ‘not taken a position’ on whether Telefónica will have to sell Telefé

Sitting at his desk on the sixth floor of the AFSCA headquarters in downtown Buenos Aires City, the head of the media watchdog Martín Sabbatella told the Herald that 2014 will be the year of the Media Law in terms of “the adjustment of the exceeding conglomerates.”

The Broadcast Media Law was approved more than four years ago, and has been challenged lin the courts by some of the media groups affected by the measure. It was not until October of last year that the Supreme Court deemed the law constitutional and enabled AFSCA to demand that all groups present voluntary adjustment plans to comply with the new anti-trust regulations of the law.

During an interview conducted Thursday, Sabbatella said proposals will be analyzed “over the next few days,” although officials acknowledge that the AFSCA’s Board of Directors will be meeting in early February.

And while AFSCA officials said Clarín’s proposal to divide itself into six separate companies was on its way of being approved, that same sources revealed that Telefé’s proposal might be rejected — and that Spanish telecommunications giant Telefónica may have to sell broadcast TV channel Telefe

What did you talk about with President Cristina Fernández de Kirchner during your meeting last week at Government House?

When she returned from (her holidays in) the South, we had a work meeting where I briefe her on the current situation.

Was there a specific order from her on how to proceed regarding the presentations that were made by big media groups to adjust to the Broadcast Media Law?

The President’s order was quite clear: to comply with current regulations without exceptions nor privileges, to apply the law equally to all companies.

In this context, has AFSCA already decided whether to approve or not Clarín Group’s offer to divide itself into six different companies?

The AFSCA received 40 proposals to comply with the law, all of them before December 7, 2012 (the deadline established by the Supreme Court in a preliminary ruling). One of those could not be evaluated because it did not represent the company’s majority stake: it was the presentation made by David Martínez (who holds a 40 percent stake in Clarín Group’s Cablevisión cable company), which was later picked up by Clarín following the October 29, 2013 Supreme Court’s ruling (that deemed the law constitutional). Out of these 40 proposals, 15 were discarded because there was no need for adjustment, 14 were approved and are being carried out and 11 have yet to be discussed. I cannot guess what the opinion of the board of directors will be, but I can say that if Clarín wants to voluntarily comply with the law, it also needs to comply with AFSCA’s demands on the cable grid (regarding the order of channels). On its face, what it submitted meets the requirements of the law. Any anti-trust regulation allows these kinds of divisions — so that a single company cannot build a cost structure that could end up in unlawful practices.

What are the points of contention regarding news channel Telefe? Does the discussion involve its proposal regarding the maximum number of licences permitted, or the fact that the company insists on saying there is no direct commercial relationship between Telefe and Spain’s Telefónica Group?

Telefe has presented a proposal in which they acknowledge they are exceeding the 35 percent (limit) of market share (set by law). Regarding the other two issues at stake — the prohibition of a majority stake of foreign capital and its non-compatibility with public service it makes its own claim about why the company is not breaking the law. AFSCA has not taken a position on that yet. Then there’s the case of (cable giant) Telecentro, which has also submitted its adjustment plan because its licences do not comply with the requirements of the law.

You are referring to the fact that Telecentro is currently using a single licence to cover several districts.

The law says that one licence can cover a certain population — if that limit is exceeded, then licences will be split and count in the 24-licence limit. This means that in order to preserve the same universe (of subscribers), the group will be using up a bigger portion of its allowed share.

What happens to Spanish group Prisa, the owner of Radio Continental and several other stations?

In the case of Prisa there’s also a debate about whether it exceeds or not the regulations set by the Media Law. It’s the same with Grupo Uno (owner of the Mendoza-based cable company Supercanal, which holds several cable licences and enjoys a dominant position in several provinces) — it has to sell or transfer some of its licences.

What will happen with Radio Splendid, Rock & Pop and other radio stations that Raúl Moneta reportedly sold to Matías Garfunkel?

No transfer plan has yet been formalized.

So when will the AFSCA’s Board of Directors finally meet?

We’ll see once we receive reports by legal experts. But it will surely take place over the next few days.

How is your relationship with Marcelo Stubrin and Gerardo Milman, the opposition representatives at AFSCA?

There is mutual respect among all directors. Each one has his own position and sustains it, but there are a whole lot of issues on which we share a common view. A lot of the votes were unanimous. This board works just like any other board of directors: with its public differences, but with the normal operation of a plural board, which composition was set by the law.

Tell me about the 13 permissions that were authorized during the last board session. They are not technically licences, is that correct?

That’s right: they’re not licences but rather permissions. It’s a kind of transition toward the normalization (of the radioelectric spectrum) while bids for digital channels are being established: permissions that reflect pre-existing realities, that is, small stations that were already on the air.

These authorizations add up to the 20 others already approved last October. On what basis were these 33 stations chosen?

Taking into account whether documentation had been completely submitted, as long as they met the requests made by AFSCA. Having said that, we would like to normalize all channels in the context of the law.

What can these newly-authorized stations do?

They can broadcast at their allowed wattage. But they’re not licences.

Are they allowed to sign up for public contests or subsidies?

They can submit proposals for public programmes. Some of these (stations) have already received subsidies for training and equipment.

What about the technical plan that would allow the distribution of 33 percent of the frequencies to community radio and TV stations?

Progress has been made. It isn’t a single plan, but rather a number of technical plans for different cities and districts, especially in those places where the (radioelectric) spectrum needs higher intervention because there is an overlap of frequencies. Some 19, 20 plans are currently operational. Other plans need to be worked on.

At what moment will viewers be able to enjoy new channels?

Once the adjustment process ends, new realities should become evident as a result. But new commercial channels may appear at any time, private (investors) only need to come here, sign up and begin producing. New production companies appeared throughout the country. We may be too accustomed to what’s going on in the metropolitan area, but the law’s impact on several districts in the rest of the country is impressive. In some places, there used to be only one media outlet, and stations that have emerged have brought new discussions, a more pluralistic view.

Is AFSCA aware of the fact that the ball is now in the state’s court?

Of course, that is why we want 2014 to be the year of the Media Law regarding the adjustment (of conglomerates that do not meet the requirements of the law). Then, as far as application of long-term objectives is concerned, well ... it’s a process. The path is being positively followed. But of course, following the (Supreme Court’s) ruling, the work needs to be intensified.

@fedebillie

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