OSCE REPORT ON FREEDOM OF MEDIA

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[07:44 pm] 26 September, 2008

Comments on the Draft Law "On Making a Supplement to the Republic of
Armenia Law on Television and Radio" regarding licensing moratorium1

This report deals with a proposal to supplement Republic of Armenia
Law on Television and Radio by adding the following Article:

ARTICLE 1. In Article 59 of the RA Law on Television and Radio
(9 October 2000, HO-97, hereinafter referred to as Law) add a new
paragraph with the following contents:

"Competitions for licensing of television and radio broadcasting shall
not be announced until 20 July 2010. TV companies having license that
expires before 21 January 2011 may submit an application for extending
the validity period of the license to the National Commission. The
validity period of the license is extended for the claimed period
but not longer than 21 January 2011".

ARTICLE 2. This Law becomes effective from the 10th day following
its official promulgation.

Background

This supplement to the Law on Television and Radio, developed by
the Armenian Ministry of Economy, was adopted in an extraordinary
session of the Parliament in first, second and third readings in early
September without any prior public discussion and consultation. This
has received strong criticism from local media and NGOs that
feel that the moratorium on new licences is especially aimed at
preventing independent broadcasters from gaining a licence. In
the Council of Europe Parliamentary Assembly Resolution 1620
(2008) from June 2008 Armenia is urged to ensure "open, fair and
transparent licensing procedure", especially against the background
of a decision of the European Court of Human Rights, upholding an
application of an independent TV station critical of the Government,
which controversially lost its broadcast license in 2002. Independent
media and NGOs see the moratorium as yet another way to distort an
open and fair licensing procedure, using the digitalisation procedure
as an excuse. The Law on Television and Radio does not include any
provisions on digitalisation. This supplement does not introduce such
rules, but takes a first step in the digitalisation process. However,
there is a danger that the broadcasting landscape in Armenia is not
ready for this step as there is a lack of plurality and diversity.

Digitalisation

The time for starting digitalisation is basically up to each country,
within the rules set by the International Telecommunications Union
(ITU) relating to the frequency spectrum. Such rules entail that
even if it is nominally for each country to decide if and when to
digitalise, at 1 The Author of the Comments is Professor Katrin
Nyman-Metcalf, OSCE independent expert.

some point this change must happen. In the EU there is no common
switch-over date but a goal of switch-over by at least 2012. The
views expressed by civil society and by the authorities on the timing
for Armenia can be seen as conflicting opinions about which it is
not possible to say what is best, without a careful analysis of the
specific conditions in Armenia.

In any case preparations should be made as early as possible,
in consultation with those involved, including the broadcasting
sector and civil society. A moratorium may not be the best first
step. Digitalisation should not be allowed to reduce diversity
and plurality and should never be used as an excuse to limit free
and independent broadcasting. If the broadcasting landscape in a
country is not pluralistic and diverse, it would be better to delay
digitalisation and undertake other reforms first.

Reasons for a moratorium The justification for the amendment is
that the Republic of Armenia is preparing for digital radio- and
TV-broadcasting system in the territory of Armenia.. It is in line
with international practice to have a period of moratorium for issuing
analogue licences. How this is designed varies between countries,
as the way and the timetable how to digitalise varies.

The reason it is useful to have a moratorium is that it is very
expensive to have parallel analogue and digital broadcasting. If
existing analogue licences have to be terminated before their time of
expiry (because analogue broadcasting is switched-off) several legal
issues may arise like the question of legitimate expectations. Licences
cannot just be terminated early without consideration for the interests
of broadcasters that have made investments and counted on a certain
business period. It is therefore better to ensure over time that the
change is introduced gradually, for which a moratorium at some point
may be needed.

Switch-over from analogue to digital

One key issue in the switch-over process is frequency management. As
the same frequency spectrum is used for digital and analogue the
digitalisation plan, the law and the work of the regulator need to
set out how to handle the transfer. A moratorium on new licences
for analogue may be one step in the process, but this should
not be introduced if the broadcasting landscape is not diverse
and pluralistic. In countries that have completed all or part of
the digitalisation process, existing broadcasters have been given
preference for the digital content licences. There is thus a risk
that the initial stages of digitalisation will mean less choice so the
broadcasters that are included in the early platforms, especially the
free platforms, will be very important. The public service broadcaster
must have a place on such a platform but also the other channels
given space in the digital broadcasting system must be selected to
allow plurality and diversity.

Regulatory principles

Legitimate expectations and principles of good administration including
legal certainty must be considered by the regulator. Amendments to
conditions as well as cancellation of given authorisations must always
be made in objectively justified manner and proportionately. Those
concerned must be given reasonable time to adjust and shall also be
given a chance to express their views on changes. In the process
of digitalisaton the regulator needs to include requirements of
digitalisation in licences for some time before the switch-over, so
that broadcasters can start preparing for this. This typically happens
some 5 years of more before the actual change (e.g. in the UK where
a special scheme was also established to help with the switch-over).

Conclusions

The main problem with the amendment to the law is the manner how it
was passed, without consultations. This is a serious problem as in
the introduction of a new process, it is very important to involve
the sector. It is correct that a moratorium may at some point
be introduced. This is because digital and analogue uses the same
frequencies and at the switch-over all broadcasters must be ready. It
is very expensive to maintain a parallel system for any length of time.

Existing stations should normally have the possibility to go
digital. As new stations will not be licensed for a certain
period, it is very important that there is a pluralistic system
when digitalisation is introduced. The Council of Europe Committee
of Ministers Recommendation Rec(2003)9 on measures to promote the
democratic and social contribution of digital broadcasting sets out
a set of principles for member states to apply to the development of
digital broadcasting. This mentions media pluralism especially.

The Recommendation supports a rapid changeover to digital broadcasting
but this should be done while making sure that the interests of
the public as well as of all categories of broadcasters are taken
into account. In doing so, an appropriate legal framework as well as
favourable technical and economic conditions must be provided. Even if
a moratorium will be inevitable, this should not be introduced in such
a way as to reduce diversity. The Council of Europe Recommendation
specifically mentions the licensing process and that services on
offer must be varied.