Hungary's Media Council is independent says János Auer

September 5, 2016

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“Every service provider knows that the right to provide a radio service is for a determined period of time.  The law provides for the Media Council to normally award this right for up to seven years.  The Media Council has the right to decide whether or not to extend.  From an investor’s point of view, I think seven years is a reasonably long time, and an extension is merely ‘icing on the cake’ . . . Our decision to reject Class FM’s application can be challenged.  It is up to the media service provider to avail itself of this possibility.”

Interview with János Auer, the director of Hungary’s media council appearing in the August 25-31 edition of Figyelő under the title “The Media Council is independent”.

The independence of the National Media and News Broadcast Authority (NMHH) and that of its decision making body has been called into question on several occasions in the recent past.  How free is the latter to make decisions?

The media council’s legal status is regulated by the media law.  According to this the council falls under the independent jurisdiction of the NMHH under the oversight of the parliament.   Our activities are not controlled by either the body nor its members.  We are only subordinated to the law.  So only the law limits our freedom of decision making.

Am I to understand that politics does not influence the Media Council’s operations?  Does anybody from the government discuss matters with anyone?

Naturally dialogue exists between expert organizations, we participate in conferences, public hearings, the work of international organizations, and we regularly appear before various parliamentary committees.  In the case of the latter, it can happen that we meet with political decision makers, but I don’t know if this amounts to maintaining a regular relationship.

The Council took steps of late which the press and public opinion interpreted to be clear political decisions.  It is as though after Simicska’s ominous running out, for example, the number of penalties imposed on his Class FM . . . 

The press is free, and of course everyone is entitled to their opinion about the Media Council’s decisions.  However, in general it is not true that the number of fines proliferated in recent times.  In fact, over the past three years the number has decreased.  At the same time, the authority’s program monitors and analysts continuously operate, overseeing the media services.  Penalties assessed by the Media Council are determined by the circumstances of the violation, its gravity, and its repetitiveness.

And what is the situation with regard to the extension of the rights of media service providers?  Why does the council reject that?

The media law says that the right to  engage in radio media service activities has to be won through a tender, and that it can last for up to seven years and be extended once for five years.  The Media Council exercises the legal rights of the state which owns the frequencies.  In our judgement, the [Class FM] circumstances changed significantly over the past seven years.  For this reason, it would be irresponsible to extend the right according to the same conditions.  However, it is only possible to modify the conditions through a tender process.  That is why we rejected Class FM’s application.

It is not very customary to reject an extension with reference to business conditions.  The general opinion in the profession was that a serious violation was required in order for the radio’s operator, Advenio Zrt., not to receive the frequency for another 5 years.

Every service provider knows that the right to provide a radio service is for a determined period of time.  The law provides for the Media Council to normally award this right for up to seven years.  The Media Council has the right to decide whether or not to extend.  From an investor’s point of view, I think seven years is a reasonably long time, and an extension is merely “icing on the cake.”

How do you think such a decision affects investors’ opinions about the country?  Especially in light of the fact that the radio was only recently purchased by a foreign company?

I do not know the circumstances surrounding the sale of Advenio Zrt, but the buyers should have calculated with this decision if they were thinking responsibly.  Our decision to reject Class FM’s application can be challenged.  It is up to the media service provider to avail itself of this possibility.

The official reason states “the ownership of frequencies must ensure the creation of a varied media landscape.”  How does this square with NMHH’s decision in 2009 to distribute national frequencies to existing radio stations when after the 2010 change in government the radio station tied to the political opposition went bankrupt for lack of state advertising?

The question obviously relates to why we did not hold a tender.  I believe that the bankruptcy of Neo FM was not due merely to a decrease in state advertising and was much more complicated than that.  At the same time it’s a fact, that the frequency block it used at that time was used for another purpose, and we did not issue a new tender.  We saw that the media market conditions did not warrant a new tender.  In fact, the economic conditions at that time advised against this because of the economic crisis.  From a strictly legal point of view we did not have an obligation  to issue a tender.

Are you not worried about a lawsuit as in the case of Klubrádio?  In the end how much did NMHH have to pay?

Klubrádio sought nearly HUF 1.3 billion in damages and an additional HUF 2 million in non-material damages.  This was rejected by the first-level court.  The judgement was modified by the second-level court which obliged the Media Council to pay HUF 110 million.  We fulfilled the terms of the second-level decision, but at the same time we availed ourselves of the possibility for an extraordinary legal solution, because in our opinion the decision was unlawful.

But if I know well the matter has yet to be finally resolved . . . 

Indeed, with regard to the balance of the remaining HUF 1.2 billion claim, the second-level court ordered the first-level court to begin a new procedure.  With this, Klubrádio “got another chance” to prove what it had not managed to prove yet: the legal basis for its claim and the amount of its claim.  That is, unless the Curia changes the judgement based on our petition for legal review and leaves the first-level one in place.

Let’s turn to the printed press.  Many were suprised by the Media Council’s decision to allow Mediaworks to purchase Pannon Lapok and in this way for essentially one entity to own all the county newspapers.  Hasn’t the market become too concentrated?

The basis for the Media Council’s preliminary technical authority opinion was the examination made by NMHH which identified potential markets, and then placed on it the media products affected by the merger.  Over the course of this the authority treated the general thematic regional dailies and regional periodic publications as one independent market.  In such an approach, just as before the transaction only one company operated in the given market as the responsible publisher, so it would be afterwards.  So the level of concentration after the merger would not be any greater than before.

But it remains an interesting question whether this does not endanger the diversity of information, if one company is allowed to publish the local newspapers in most of the counties.

Precisely for the reasons mentioned that transaction had no effect on media pluralism.  Laws impose boundaries on the freedom of editors.  However, regarding the quality of content, it is the markets which have the final word.  And there is also the opportunities for industry self regulation set in law.

There are rumors that this merger was in preparation for another transaction, and that the entire package will end up landing with a company close to the government.  Would the Media Council have permitted a third market actor to purchase the package?

It would be irresponsible to base anything on rumors.  In the case of other actors, another official procedure obviously would not have resulted in the same decision.

There is one type of media about which we have not spoken, even though there are develiopments in the teleivison market.  What do you say, for example, to the fact that Andy Vajna’s new channel is broadcasting from Romania?

The European Union’s charter defines the basic rights of migration.  According to this, media providers may freely choose in which member state they wish to operate.  In fact, the mentioned charter does not prohibit a given company from exercising its freedom to provide a service if it happens that it does not offer its service in the chosen member state.  For this reason I have to say that TV2’s steps do not violate the law.

So the authority doesn’t care if a media group imports channels from abroad?

The basic right of the freedom of settlement mentioned before obviously means it is not possible to oblige anyone in this regard.  Consistent legal practice and a predictable environment on the part of the Hungarian legal authorities can “draw” companies to Hungary.  There is a positive example of this.  From July 1st, 2016 Sláger TV (formerly Nóta) will come under Hungarian jurisdiction instead of Romanian.

Are you watching the Olympic Games?

Of course.

The reason I ask is because MTVA’s coverage of the games has been criticized, and from an economic standpoint MTVA falls under the Media Council. What do you think of the Olympic programs?

I’m sure that covering the Olympic events is a very difficult task from every point of view, just as I am certain that the public media employees are doing everything in the interest of quality coverage.

NAMECARD

  • 58 years old
  • Graduated from ELTE in 1982 with a degree in law
  • 1992-2010 worked as legal counsellor for Magyar Telekom’s legal predecessor
  • Member of the Media Council since 2010
  • Chairman of the Hungarian Billiard Union since 2016
  • Two adult children (a boy and a girl)
  • Hobbies: billiards, skiing, tennis, cinema and reading