Spanish group threatens to suspend investment after DNU decree largely favours Clarín
Twenty-five days after taking office, and with a sense of urgency that surprised some of his closest allies, President Mauricio Macri passed his own media law by way of decree. The new piece of legislation bypassed Congress and yielded to many of the demands of the Clarín Group, the country’s largest conglomerate.
But while the decision potentially benefits all major media and telecomms players in the pampas, Spanish giant Telefónica begs to disagree.
“We’ve always spoke about convergence (that is, allowing a single company to offer cable television, Internet and landline services), but we need the law to be equal for all, not to benefit a specific firm in detriment of the other,” a source from Telefónica told the Herald.
The company, which began operating in Argentina in 1990 providing landline telephone services, already owns broadcast TV channel Telefe, mobile phone company Movistar and Internet service provider Speedy.
But according to the DNU emergency decree issued yesterday, the national government will effectively prevent the firm from entering the cable television market until January, 2018.
“They say they’re banning us from entering the (cable television) market until 2018, which can be extended for another year, in order to allow Cablevisión to prepare for future competition. But that doesn’t make sense, because cable TV and mobile phones have already reached 80 percent of the population,” the same source said. “Who can guarantee us that in 2019 they won’t begin a new grace period?”
More importantly, Telefónica said the move affected the prospects of future investments in the country.
“Twenty days ago, we announced 36 billion pesos worth of investments over the next three years, but this forces us to re-examine our investment process. If conditions change, investments will not be the same,” the source said.
While landline phone tariffs are currently frozen, a completely different scenario can be seen in the case of mobile communications, a market dominated by Telefónica, Telecom (owned by the Werthein family and Telecom Italia, which in turn has ties to Telefónica) and Claro, run by Mexican billionaire Carlos Slim.
Mobile rates are keeping pace with inflation — and the poor quality of services leads the complaints list filed before the consumer protection offices. The increase seen in pay-TV subscriber bills (a market dominated by Clarín’s Cablevisión) and in Internet bills (where Clarín, Telecom, Telefónica emerge as the top players) show that these companies were hardly restrained when they approved price increases for their services, which are among the most expensive and inefficient in the region.
Clarín: no comment
As the Herald reported yesterday, the government is now allowing cable TV companies to provide services with a single nationwide licence. It also erased legislation aimed at preventing any cable TV company from surpassing 35 percent of the market share. As a result, Clarín’s dominant position in the market has practically disappeared overnight.
The DNU emergency decree established that no satellite TV provider can have interests in the radio, broadcast TV and pay-TV markets, or to run telecommunications services. In that regard, it shows no difference with the framework outlined by the 2009 Broadcast Media Law and the 2014 Digital Argentina Law — now repealed.
“Merging all cable TV interests of a given company under a single nationwide licence while at the same time keeping a ban for satellite TV is surprising,” a source with interests in the market of paid television told the Herald.
Currently, the only satellite TV provider — apart from the state — is DirecTV, a US company in the process of merging with telecommunications giant AT&T. The law does not allow DirecTV to provide any other phone, radio or TV service.
Should Telefónica (that already has satellites of its own) want to enter the satellite TV market, they should sell off Telefe, Movistar and the landline phone service — an unimaginable scenario.
On the other hand, Cablevisión — which controls 41 percent of the entire pay-TV market and 60 percent of the cable TV market — will have no limits to expand and will be allowed to coexist with the other conglomerate’s units offering broadcast TV, radio and Internet.
A Clarín Group source declined to comment on the news, but the Argentine Association of Cable Television (ATVC) — of which Clarín is a member through its cable company Cablevisión — issued a press release celebrating the news.
“The regulation passed by the government … is in line with aims of future convergence outlined by northern nations and neighbouring countries in Latin America,” ATVC said. “We have always called for a regulatory framework that helps development and promotes investment (and) we understand that repealing many of the irrational rules that governed the sectors will result in more investment and therefore in a better quality of services for users throughout the country.”
A freer market
Some of the details unveiled in yesterday’s DNU decree show a clear effort by the new government to adopt laissez-faire policies in the area.
For instance, the government replaced Article 41 of the 2009 regulation with a new resolution that allows the free trade of media licences. And while the practice had once been legal before the broadcast law was passed (thanks to a decree signed by former president Carlos Menem), back in the day it called on media owners to obtain previous approval from the now extinct COMFER watchdog. Now media owners can buy and sell their licences freely and if the newly-created ENACOM national communications agency doesn’t explicitly oppose the move over the next 90 days, it’s a done deal.
As for the licences themselves, the Macri administration will automatically extend radio and TV licences to anyone requesting so over the next year. The new regime of licences extends the period to 10 years plus five “automatic” additional years and a 10-year extension.
The result? Big media owners, who in late 2013 may have thought they would be really being forced to sell of their excess licences, are now here to stay — for decades.
“The decree has problems of form and content. The changes have been passed by decree, and they open the way for further media concentration,” media expert Santiago Marino told the Herald. “It has even dissolved the Federal Council of Broadcast Communication.”
A less plural council
In one of the most overlooked articles of the DNU, the government replaced that council — which is made up by representatives of the provinces, human rights groups, indigenous communities, media groups and universities — with a new office that will deal with the entire communications area, in line with the decision to replace the AFSCA media watchdog and the AFTIC communications body with the ENACOM.
That decision was challenged in the courts by ousted AFSCA president Martín Sabbatella and on December 30, La Plata Judge Luis Arias ordered the government to refrain from moving further. The government tried to bypass his decision by setting up December 29 as the date of the DNU published in yesterday’s edition of the Official Gazette.
ENACOM will be made up of four members (three directors and a president) directly appointed by the president and three who will be nominated by a permanent congressional committee — a less plural composition than AFSCA’s ousted board of directors. Yesterday, it was also known that all directors, even the ones appointed by Congress, “can be immediately removed from office by the Executive branch without informing of the reasons.”
Days ago, the Special Rapporteur on Freedom of Expression of the Organization of American States (OAS), Edison Lanza, criticized Macri’s first moves on the issue.
“Ignoring media concentration is to ignore the entire doctrine on the matter. Strong democracies put limits to media concentration,” Lanza said.
Sebastián Lacunza and Federico Poore
Twenty-five days after taking office, and with a sense of urgency that surprised some of his closest allies, President Mauricio Macri passed his own media law by way of decree. The new piece of legislation bypassed Congress and yielded to many of the demands of the Clarín Group, the country’s largest conglomerate.
But while the decision potentially benefits all major media and telecomms players in the pampas, Spanish giant Telefónica begs to disagree.
“We’ve always spoke about convergence (that is, allowing a single company to offer cable television, Internet and landline services), but we need the law to be equal for all, not to benefit a specific firm in detriment of the other,” a source from Telefónica told the Herald.
The company, which began operating in Argentina in 1990 providing landline telephone services, already owns broadcast TV channel Telefe, mobile phone company Movistar and Internet service provider Speedy.
But according to the DNU emergency decree issued yesterday, the national government will effectively prevent the firm from entering the cable television market until January, 2018.
“They say they’re banning us from entering the (cable television) market until 2018, which can be extended for another year, in order to allow Cablevisión to prepare for future competition. But that doesn’t make sense, because cable TV and mobile phones have already reached 80 percent of the population,” the same source said. “Who can guarantee us that in 2019 they won’t begin a new grace period?”
More importantly, Telefónica said the move affected the prospects of future investments in the country.
“Twenty days ago, we announced 36 billion pesos worth of investments over the next three years, but this forces us to re-examine our investment process. If conditions change, investments will not be the same,” the source said.
While landline phone tariffs are currently frozen, a completely different scenario can be seen in the case of mobile communications, a market dominated by Telefónica, Telecom (owned by the Werthein family and Telecom Italia, which in turn has ties to Telefónica) and Claro, run by Mexican billionaire Carlos Slim.
Mobile rates are keeping pace with inflation — and the poor quality of services leads the complaints list filed before the consumer protection offices. The increase seen in pay-TV subscriber bills (a market dominated by Clarín’s Cablevisión) and in Internet bills (where Clarín, Telecom, Telefónica emerge as the top players) show that these companies were hardly restrained when they approved price increases for their services, which are among the most expensive and inefficient in the region.
Clarín: no comment
As the Herald reported yesterday, the government is now allowing cable TV companies to provide services with a single nationwide licence. It also erased legislation aimed at preventing any cable TV company from surpassing 35 percent of the market share. As a result, Clarín’s dominant position in the market has practically disappeared overnight.
The DNU emergency decree established that no satellite TV provider can have interests in the radio, broadcast TV and pay-TV markets, or to run telecommunications services. In that regard, it shows no difference with the framework outlined by the 2009 Broadcast Media Law and the 2014 Digital Argentina Law — now repealed.
“Merging all cable TV interests of a given company under a single nationwide licence while at the same time keeping a ban for satellite TV is surprising,” a source with interests in the market of paid television told the Herald.
Currently, the only satellite TV provider — apart from the state — is DirecTV, a US company in the process of merging with telecommunications giant AT&T. The law does not allow DirecTV to provide any other phone, radio or TV service.
Should Telefónica (that already has satellites of its own) want to enter the satellite TV market, they should sell off Telefe, Movistar and the landline phone service — an unimaginable scenario.
On the other hand, Cablevisión — which controls 41 percent of the entire pay-TV market and 60 percent of the cable TV market — will have no limits to expand and will be allowed to coexist with the other conglomerate’s units offering broadcast TV, radio and Internet.
A Clarín Group source declined to comment on the news, but the Argentine Association of Cable Television (ATVC) — of which Clarín is a member through its cable company Cablevisión — issued a press release celebrating the news.
“The regulation passed by the government … is in line with aims of future convergence outlined by northern nations and neighbouring countries in Latin America,” ATVC said. “We have always called for a regulatory framework that helps development and promotes investment (and) we understand that repealing many of the irrational rules that governed the sectors will result in more investment and therefore in a better quality of services for users throughout the country.”
A freer market
Some of the details unveiled in yesterday’s DNU decree show a clear effort by the new government to adopt laissez-faire policies in the area.
For instance, the government replaced Article 41 of the 2009 regulation with a new resolution that allows the free trade of media licences. And while the practice had once been legal before the broadcast law was passed (thanks to a decree signed by former president Carlos Menem), back in the day it called on media owners to obtain previous approval from the now extinct COMFER watchdog. Now media owners can buy and sell their licences freely and if the newly-created ENACOM national communications agency doesn’t explicitly oppose the move over the next 90 days, it’s a done deal.
As for the licences themselves, the Macri administration will automatically extend radio and TV licences to anyone requesting so over the next year. The new regime of licences extends the period to 10 years plus five “automatic” additional years and a 10-year extension.
The result? Big media owners, who in late 2013 may have thought they would be really being forced to sell of their excess licences, are now here to stay — for decades.
“The decree has problems of form and content. The changes have been passed by decree, and they open the way for further media concentration,” media expert Santiago Marino told the Herald. “It has even dissolved the Federal Council of Broadcast Communication.”
A less plural council
In one of the most overlooked articles of the DNU, the government replaced that council — which is made up by representatives of the provinces, human rights groups, indigenous communities, media groups and universities — with a new office that will deal with the entire communications area, in line with the decision to replace the AFSCA media watchdog and the AFTIC communications body with the ENACOM.
That decision was challenged in the courts by ousted AFSCA president Martín Sabbatella and on December 30, La Plata Judge Luis Arias ordered the government to refrain from moving further. The government tried to bypass his decision by setting up December 29 as the date of the DNU published in yesterday’s edition of the Official Gazette.
ENACOM will be made up of four members (three directors and a president) directly appointed by the president and three who will be nominated by a permanent congressional committee — a less plural composition than AFSCA’s ousted board of directors. Yesterday, it was also known that all directors, even the ones appointed by Congress, “can be immediately removed from office by the Executive branch without informing of the reasons.”
Days ago, the Special Rapporteur on Freedom of Expression of the Organization of American States (OAS), Edison Lanza, criticized Macri’s first moves on the issue.
“Ignoring media concentration is to ignore the entire doctrine on the matter. Strong democracies put limits to media concentration,” Lanza said.
Sebastián Lacunza and Federico Poore
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