November 22, 2017
Thursday, October 9, 2014

Telefónica: the missing piece of the puzzle

Gov’t insists it is just applying law, but seems to ignore inconsistencies in other groups

The government efforts to prevent Clarín Group from violating the spirit of the Broadcast Media Law brought into stark focus how the efforts aimed against the country’s largest media conglomerate do not match up with the action against other concentrated media groups that violate the anti-trust regulation approved by Congress in 2009.

Spanish group Telefónica seems to be the clearest case of this discrepancy.

The proposal presented by the owner of broadcast TV channel Telefe to adjust to the requirements of the anti-trust law remains at a standstill. To comply with the law, the country’s second-largest media group must get rid of Telefe, but its plan has yet to be analyzed by the AFSCA media watchdog.

“Telefe has presented a proposal in which it acknowledges that it exceeds the 35 percent limit of market share,” AFSCA head Martín Sabbatella told the Herald in January. “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.”

The regulation that replaced the 1980 Broadcast Law rules that companies that provide public services cannot also commercially exploit radio, broadcast television nor cable television licences — and Telefónica’s holdings include landline and mobile phone services through its Movistar brand.

The restriction was not in the original draft bill discussed in 2009 but was accepted by the Fernández de Kirchner administration following demands made by centre-left lawmakers. Clarín had also demanded that telecommunication companies — the only firms able to match its market reach — be banned from holding audiovisual licences.

The Spanish giant argues its Argentine television channels are property of Telefónica de España and not of its subsidiary Telefónica de Argentina. AFSCA officials had found the argument inadmissible and hinted several times that the watchdog would end up rejecting its proposal, thus forcing the firm to find a buyer in the next six months for its main channel and other TV stations.

But nothing has happened so far.

‘Falls apart’

“The argument that Telefe does not belong to Telefónica falls apart rather quickly when we consider what the conglomerate says on its webpage — that it actually owns Telefe’s licence,” media expert Santiago Marino told the Herald yesterday.

Why doesn’t the government move forward with Telefónica’s regulatory compliance? “Because Telefónica represents all Spanish business in Argentina — investments are tied to what happens to the company,” Marino added.

Earlier this year, a source close to Marcelo Stubrin, the Radical party (UCR) representative in AFSCA’s board of directors, told the Herald the government was making a mistake by not dealing with the Telefónica-Telefe case, calling it “the perfect example of the unequal treatment toward Clarín.”

That failure makes it easy to be suspicious of the whole process.

“This obviously has an impact on our overall judgement of the adjustment plans presented so far,” the source added.

Back then, AFSCA representatives acknowledged that the pace of those proceedings has been slowed down to avoid political clashes with the Mariano Rajoy administration months after the country reached a compensation agreement with the Spanish oil firm Repsol over the expropriation of a majority stake in YPF.

Meanwhile, proposed adjustment plans presented by Prisa, Telecentro and the Vila-Manzano Group also remain at a standstill. Decisions were originally expected to be made in January, then postponed to February, then put off several more times.

“There was a (technical) resolution on Prisa’s situation that was ready to be discussed, but the board won’t deal with it. When I told Sabbatella about this he told me it was a bit rushed because the resolution had just arrived. But it was not like that with Clarín,” Gerardo Milman told the Herald last night.

This week, the contentious Media Law that has been celebrated as an example across the world turns five. But the lack of an even-handed application could end up discrediting its overall experience — and giving its political adversaries the opportunity to throw the baby out with the bath water once the president steps down in 2015.


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