Radio Broadcasting Bill Enters Consultation Period

Radio Broadcasting Bill
Types of Radio Broadcasting Service
Restrictions
Programming Content
Digital Technology
Comment

Radio Broadcasting Bill

The Communications Ministry has submitted its Bill on Radio Broadcasting Services and Ancillary and Auxiliary Services (Ordinance 331 of June 21 2001) to public consultation.

Based on Article 21(12)(a) of the Constitution, the bill aims to establish regulations for:

• organizing the granting of radio broadcasting services (and ancillary and auxiliary services), including the management and supervision of these services;

• defining radio broadcasting policy; and

• establishing guidelines for the granting of radio broadcasting services that stimulate the development of the domestic cinematographic industry and encourage the regional production of films, videos and multimedia.

Radio broadcasting services are construed as general interest, public services with an informative, educational, cultural or recreational purpose classified as open services to be received in a free and direct manner by the public.

The bill contains the innovative concept of ancillary services in relation to sound and image radio broadcasting services, including television retransmission services which are designed for the reception of generator station signals in locations that are difficult to reach.

The bill also establishes the creation of the Communications Council, a body within the organizational structure of the Communications Ministry with the purpose of assisting it in the formulation of policies and guidelines for the granting of radio broadcasting services, and in the proposal and implementation of government policies concerning the content of transmissions. The council will offer its opinions regarding the renewal of concessions, grants, permits and authorizations for radio broadcasting services.

Types of Radio Broadcasting Service

Among the types of radio broadcasting service foreseen in the bill are commercial and non-commercial radio broadcasting services. The latter are based on not-for-profit principles and include:

• an educational radio broadcasting service;

• an institutional radio broadcasting service that outlines the activities of public corporations and agencies, and entities of the executive, legislative and judicial branches; and

• a community radio broadcasting service.

Commercial radio broadcasting services will be granted by means of a concession (by the Communications Ministry) through an invitation to bid process, entailing the right of use of radio frequencies associated to the respective channel. The concession term will be 15 years for sound and image radio broadcasting service, and 10 years for the sonorous radio broadcasting service, beginning from publication of the relevant contract in the Official Gazette.

The concession contract shall, at least, indicate the following:

• the object, concession term and location of the service's exploitation;

• the conditions for granting the concession;

• the payment due (and relevant terms);

• the rights, warranties, and obligations of the union, concessionaires and users; and

• the sanctions and conditions for contract renewal.

Institutional and educational radio broadcasting services will be granted through a permit, independent of an invitation to bid and on a free basis.

The broadcasting of commercial advertising, cultural support and sponsorship is prohibited in institutional radio broadcasting. However, educational radio broadcasters will be able to receive resources and publicity from public and private entities in terms of sponsorship of programmes, events and projects. The paid broadcasting of advertisements (and other practices constituting the commercialization of intervals) will be forbidden.

The community radio broadcasting service will be granted by means of an authorization term, entailing the right of use of an associated radio frequency, operated on low power and covering a given community.

Each entity will be granted one authorization for the provision of the community radio broadcasting service. The granting of authorizations to entities providing any other type of radio broadcasting or pay television signal distribution service, or to entities that have among their shareholders or officers persons who, under these conditions, participate in other companies holding rights to provide any of these services, is forbidden.

Authorization for the provision of community radio broadcasting services is subject to the payment of a token fee for registration purposes. The Communications Ministry will determine the respective fee and conditions.

Both the ancillary and auxillary services to sound and image radio broadcasting services will be granted by means of an authorization for an indeterminate period, on a basis stipulated by the Communications Ministry.

Concessions, permits and authorizations entered into prior to enactment of the new law will continue to be valid under their original terms and conditions. With the consent of the parties, their contracts may be adapted in accordance with the new law. Adaptation will be a prerequisite for the renewal of all contracts.

The clandestine exploitation of radio broadcasting services (or their interruption or disruption) will constitute a criminal offence.

Restrictions

On the basis of Articles 221 and 222 of the Constitution, the bill prohibits the inclusion of foreign capital in the capital stock of radio broadcasting companies by stipulating that only political parties and corporations in which Brazilians own the capital exclusively and nominally is acceptable. Such participation may only take place through non-voting capital and must not exceed 30% of the capital stock.

Moreover, among the restrictions established in the bill, no individual or legal entity may directly or indirectly possess, control or operate, in a given location, more than one sound and image radio broadcasting service entity, or more than 20% of the number of sonorous radio broadcasting service entities set forth in the plan for the locality.

Programming Content

For the purpose of protecting the content of radio broadcast programming, the bill determines that, in addition to the obligation to provide journalistic coverage of events and topics of relevant local, regional and national interest, radio broadcasting entities must transmit a minimum amount of:

• regionally produced programming;

• newsreels;

• educational and informative programmes for children;

• motion pictures of independent production and cartoon films, produced in the country; and

• dramatized novels, as ordered by the Communications Ministry.

In addition, the Communications Ministry will stipulate a maximum percentage for the transmission of foreign language programmes.

Digital Technology

The use of analogue technology must change to digital within the timescale and under the conditions established by the Communications Ministry, which will be responsible for establishing the rules for the use of digital technology in the sonorous radio broadcasting service.

Comment

The bill has received criticism due to the reduced scope that has resulted from the exclusion of pay-per-view television (ie, mass electronic communication services) from its coverage.

Since the bill only covers radio broadcasting services, it is expected that the Brazilian Telecommunication Agency (ANATEL) will issue a regulation on paid mass electronic communication services, aimed at regulating the service regardless of the technology employed (ie, whether by cable, multichannel multipoint signal distribution service or satellite), and in which service authorizations will be dissociated from authorization grants for the use of radio frequency. ANATEL intends to develop a regulation that incorporates all of these concepts, assimilating the provisions of the cable legislation and substituting the specific regulations for the different services for one single regulation for pay television services.

For further information on this topic please contact Ricardo Barretto, Oscar Petersen or Fernanda Bottura Casella at Barretto Ferreira, Kujawski, Brancher e Gonçalves – Sociedade de Advogados by telephone (+55 11 3066 5999) or by fax (+55 11 3167 4735) or by e-mail ([email protected], [email protected] or [email protected]).