27. 05. 2009

ANEM REPORT FROM THE ROUND TABLE: REDUCTION OF THE BROADCASTING FEES CHARGED BY RBA AND RATEL

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A round table entitled "Reduction of fees charged by RBA and RATEL – measures to support sustainability of local media" was held in Belgrade on May 26, 2009. The round table was organized by ANEM with support from the USAID and IREX. This public event is a culmination of several months of ANEM advocacy activities, aimed at reduction of the regulatory fees. ANEM efforts were motivated by its members' demands to protect their interests. The main motive for organization of this event was to bring together all stakeholders and authorities involved in solving this issue – which has proven to be one of the most important burdening the relationship between broadcasters and regulatory bodies – and find an adequate solution in an open and constructive debate.

The event was attended by representatives of all relevant institutions and regulatory bodies: Nataša Vuckovic-Lesendric, Assistant Minister of Culture in charge of media; Sonja Lukic and Ana Petrovic, counselors in the Ministry for Telecommunications and Information Society; Vladica Tintor, Cabinet Chief of the Managing Board President of the Republic Agency for Telecommunication and Aleksandra Stefanovic, PR of the same Agency; Goran Karadzic, Deputy President of the Council of the Republic Broadcasting Agency and Nenad Jankovic, Deputy Executive Director of the same Agency. The round table was also attended by the following participants: Slobodan Kremenjak, ANEM lawyer (from the legal office "Živković-Samardžić"), an expert in media law; 8 representatives of 7 local radio and TV stations (RTV Zajecar; RTV As, Sabac; RTV Prima, Bajina basta; RTV 5, Nis; TV Jedinstvo, Novi Pazar; TV Cacak; Radio Star FM, Cacak); Tomislav Damnjanovic, director of Marketing Agency "A-media" which was ANEM's partner in selection of invited local stations; a representative of the Independent Journalists' Association of Serbia, Djordje Padejski and representatives of the donor community – from IREX Serbia, Richard McClear and Jelena Olofsson; from the OSCE Mission in Serbia, Ana Solovic; and from the Council of Europe Office in Belgrade, Vladan Joksimovic.

At the beginning of the meeting, an introductory speech was made by Richard McClear, director of IREX Serbia. He described that his organization has helped ANEM to organize the event with the aim to solve this problem since it is obvious that the system of fees is not working and needs to be fixed. The fees should protect legal broadcasters from illegal ones who form unfair competition in the market, as well as the integrity of legal frequencies, McClear pointed out.

Natasa Vuckovic-Lesendric, Assistant Minister of Culture for the media, informed the attendees that the Ministry of Culture, under whose competence the media fall under, has formed work groups, in reaction to justified demands of media representatives, to formulate a package of economic measures to help the media. The group dealing with the electronic media, of which the president of ANEM was a member, proposed a reduction of fees paid to the RBA and RATEL, longer payment periods, as well as a modification of the rules on advertising, among other measures. The Ministry has delivered these demands to the relevant ministries and their reply is still being expected, which is necessary to implement the measures. Also, the Ministry is still analyzing the financial plan of the RBA because of the previously announced modifications of the Rulebook for calculation of fees and expected reductions. At the same time, in order to realize some of the broadcasters' requests it would be necessary to modify the Broadcasting Law. For this reason, a work group has been formed to work on this issue and its proposal is due in three months' time. This especially applies on the demand to close illegal broadcasters, which would require amendments to the Law, since in accordance with the current Law, the RBA and the RATEL have insufficient authorizations to perform this task. Ms Lesendric has emphasized that the Ministry of Culture had a negative opinion regarding the modifications of the Individual Income Law which had resulted in increase of the tax on authors' fees (author's fees are often used in the media industry) and at the same time offered a new proposal to reduce this tax. In order to improve the systemic position of the media, modifications to the Broadcasting Law are being intensively worked upon and they are expected to be completed in the next few months, Ms Lesendric concluded.

Jasna Milanovic, ANEM Coordinator, offered the data from the internal research conducted among ANEM member stations, performed in February and May of this year, about the impact of the economic crisis, as well as about the amount of fees paid to regulatory bodies affecting their stability. The research showed that broadcasters are burdened with high fees – the highest in the region – as well as with other financial obligations toward the government, and that the problem was made even worse by the economic crisis. The results of the last poll show that the fees paid to regulatory bodies constitute between 5% and 20% of broadcasters' total costs, which together with copyright fees and other taxes and contributions are a significant load and decrease the level of funds available for investment. All stations have demanded – as a measure of support to their stability – extended deadlines for payment, as well as a reduction of the fees paid to the RBA and the RATEL. Around 70% of them demanded the fees be reduced by 50%. The reasons behind this are partly financial,  but also related to dissatisfaction with the regulatory bodies’ performance. These bodies have not been successful in allowing broadcasters the unobstructed use their broadcasting rights for which they pay such high fees, mostly because of inefficient closure of illegal broadcasters and failure to prevent all forms of unfair competition. On the basis of demands made by its members and in the course of representing their interests, ANEM has since the beginning of 2009 publicly called for reduction of RBA fees, specifically a 50% decrease for all broadcasters, due to the fact that during the last two years the RBA has been transferring back to the budget, as a surplus amount, a half of all collected fees (more than 200 million dinars) and that the same situation is projected for 2009 as well in its financial plan. This clearly demonstrates that the RBA does not need these funds and that the broadcasters are overcharged unjustified. ANEM has also demanded a proportional reduction in the RATEL fees. ANEM representative has restated that ANEM is opposed to the fact that the regulatory bodies are using commercial broadcasters' money to contribute to the budget, and that ANEM demands that the total amount of the fees be appropriate to regulatory bodies' actual needs. ANEM has also called for strict implementation of both legal criteria for calculation of RBA fees – the size of population at the territory covered with the program signal (it has been implemented incorrectly, which should be corrected), and the type of the broadcast program (this criterion has not been implemented at all until recently). At the same time, ANEM proposes that the law be modified in such a way that all surplus RBA fees, instead of being paid to the budget, be redirected to a special Fund for Development of Broadcasting – to a special RBA account – and used only for development of the media (digitalization, education, funding of joint projects) and not to fill in the budget.

Goran Karadzic, representative of the RBA announced that the fees will be reduced and said that since May 25 an overview of individual annual fees for broadcasting of TV and radio program in local and regional areas in accordance with the current Rulebook, as well as the proposed changes of it, has been posted on RBA web site. In his words, the new method of calculation of fees will be much more fair, since it will be based on the population size in zones of coverage (according to the latest census; the Agency for Statistics was consulted to correct these figures). However, since this method in some cases leads to decreased fees, and in other cases to their increase, this increase will be overcome by a linear reduction of the basis from 13.5 dinars to 11 dinars per capita, which will apply to all broadcasters – national, regional and local. In this way, the projected surplus for the year 2009 will be reduced by around 100 million dinars, and together with the decrease in collected fees due to revoked licenses this should result in a significantly smaller surplus. But the new fee proposal is yet to be discussed by the Council of the RBA (its next session is scheduled for June 3), and after that it has to get the Government's approval. Goran Karadzic reminded everyone that there is another option within the existing law – fees can be reduced on the basis of the program content. This demand has recently been approved in the case of TV B92, after a long procedure. The control procedure is complex and requires a lot of time, but it can achieve a certain reduction in fees, Karadzic emphasized.   

Representative of RATEL, Vladica Tintor, reminded the attendees that the RATEL collects three types of fees: for usage of radio frequencies, for radio-transmitting stations and for "delivery of signal". The managing board of RATEL defines a financial plan which is approved by the Government. Two years ago, the Agency offered a plan for reduction of fees, but the Government rejected it. A new proposal for reduced fees is still being prepared. RATEL wants to satisfy the broadcasters’ requests, Tintor emphasized, but the Agency is still not independent from the relevant Ministry for Telecommunication and the Ministry of Finance, and therefore each modification must be made in accordance with the law and regulations. He pointed out that the cooperation between RATEL and the Ministry is very good and that it is expected that there will be no significant difficulties with regard to reducing broadcasters' fees.

Slobodan Kremenjak, media law expert, ANEM lawyer from the law office "Zivkovic & Samardzic", said that, although the Serbian market is already oversaturated by too many legal broadcasters, there are certain regulatory measures which could relax the situation in the market. In the 21st century, both public service and commercial broadcasting are important for the society. Therefore the society should define measures necessary to ensure that these services perform their social function. Not a single legal justification exists for payment of such high fees by broadcasters, since the fees should only cover the costs of regulation. ANEM opposes the misinterpretation of the legal provisions regarding the forwarding of possible surplus RBA funds to the state budget, since these legal provisions were never intended to use commercial broadcasters' money to contribute to the budget (and to constitute a form of an illegal additional tax), but are only a counterpart to the provision which states that those bodies' possible deficit must be compensated from the budget. ANEM is of the opinion that the total amount of the fees must be reduced by 50%, the same as the surplus amount, and that it should be applied to all broadcasters, Kremenjak pointed out. He added that both legal criteria for calculation of RBA fees – covered territory and program content – must be strictly applied, and that both criteria must be taken into account when considering this issue. He proposed that RBA, in accordance with the Law, should require cable broadcasters to pay fees, which would make the situation easier for terrestrial broadcasters, who are the only ones paying the fees, and at the same time the budget of the RBA must be fairly filled by fees paid by all broadcasters. It is a fact that both types of broadcasters are competitive in the market, while only some of them are burdened with the fees; therefore the RBA should license the cable broadcasters as well, as soon as possible.

Representatives of broadcasters welcomed ANEM efforts to achieve reduction of fees, which have resulted in regulatory bodies' now evident willingness to do it. They also pointed out other problems in relations between broadcasters and regulatory bodies: a large number of broadcasters in an undeveloped market burdened by numerous illegal broadcasters; flaws in the plan of frequencies; installation of transmitters in illegal locations with the aim to achieve greater coverage than approved; large expenses for transition to digital broadcasting and simulcast; necessary separation of the broadcasting equipment from the RTS etc. In response to the questions made by representatives of broadcasters, the representatives of the RBA and RATEL said that the problem lies in bad systemic solutions, and that it is necessary to modify the existing regulation with support from relevant ministries and other bodies. The representative of the Ministry of Culture pointed out that these issues will be taken into account when modifying the Broadcasting Law.

ANEM believes that this event has proved that several months of public advocacy (by ANEM and other media associations that have joined it) aimed at reducing the broadcasting fees has achieved results. High turnout of all invited regulatory bodies and authorities invited to this round table, and their preparedness to reduce the fees, clearly show that their attention is now focused on the media's problems and that appeals from the media sector – whose survival in the economic crisis is at stake – have been taken seriously.

The RBA has demonstrated willingness to reduce fees for all broadcasters via implementation of the population size criterion and a linear reduction of the basis. The RATEL has also expressed preparedness to reduce its fees for broadcasters. However, RBA proposal has not yet received necessary approvals, nor is it posted in a document form on its web site, while RATEL proposal is still being prepared. Therefore ANEM will continue its public efforts to solve this issue, monitoring the authorities' activities and offering its proposals and initiatives, in order to speed up the events and contribute to actual realization of good will.

Since it is crucial to preserve the plurality of the broadcasting system, ANEM will support every kind of reduction of fees because it is necessary for survival of the media, but at the same time ANEM points out that a true and systemic solution to this problem needs additional efforts. ANEM will consistently state the following positions:

• The fees paid to the RBA are intended to provide its autonomy and financial independence.
• The total amount of fees should cover actual costs of the RBA (and the mandatory reserve) necessary for its activities, but should not be used for unnecessary costs and a projected surplus which is then paid to the state budget.
• Within this total sum defined in this way, fair individual fees should be calculated using both criteria.
• The criterion of program concept should become common practice and not an exception, since it is a way to stimulate quality content and investment in such content.
• Aside from this, if cable and satellite broadcasters were obliged to pay fees, that would distribute the burden of fees to all broadcasters, therefore reducing the financial stress on terrestrial broadcasters.
• In case of surplus fees collected by the RBA, it is necessary to provide regulation that such surplus must be returned to broadcasters and not paid to the budget. This surplus should be redirected to a special RBA account, to the Fund for Development of Broadcasting, and used for development of the media (digitalization, education, productions...). 

Since the problem of fees is closely related to legal broadcasters' right to fully realize their right to broadcasting, for which they are paying fees, ANEM will continue its public efforts to achieve a coordinated response of all relevant bodies with the aim to close all illegal broadcasters and eliminate unfair competition as a basic condition for normal functioning of the market.

ANEM points out that more willingness is necessary to achieve a systemic solution, which will be the goal of ANEM further efforts, but the first steps are encouraging.