Radio Waves
The court has returned an oral verdict ruling that KRRiT did not have any legal basis in refusing RMF a licence to operate a network of local stations and to demand the regulators approval for all transactions involving the station's shares. On the key issue of local stations, the verdict does not automatically negate the regulator's ban on RMF's local stations, but merely forces the broadcasting council to vote on the issue for a second time.
Dworak sees the decision as an important step to victory in the biggest attack on KRRiT by Poland's private media.
"The fundamental message of the ruling is that the KRRiT is not above the law and is bound by the constitution and the radio and television law," Dworak said. "It cannot issue concessions that restrict the freedoms created by the constitution and the law."
In May last year, when RMF's broadcasting licence came up for renewal, KRRiT took the opportunity to impose a series of new conditions. The station's new licence was a symptom of the regulatory body's tightening grip on private media.
The regulator took issue with a network of 15 local stations that allowed RMF to offer regionally-oriented programming, including local news, campaigns and entertainment listings, claiming that the station was unfairly taking advertising revenues away from small local stations. The council refused to issue a licence that would allow the local stations to continue, which led the network to cease broadcasting on May 30 last year, cutting off a major source of RMF's advertising revenue.
The licence also contained new conditions governing RMF's shareholder structure, so that all capital transactions involving more than 5% of the radio station's stock would require permission from the regulator. The previous licence stated that the only capital transaction requiring regulatory approval was a change of owner, defined as controlling 51% of the company. Such conditions were also imposed on other stations, including Radio Zet, when its licences came up for renewal.
Outraged at the regulator's new licensing conditions as well as the decreased prospects for the future of their business, RMF's directors appealed against the KRRiT's decision in the court, which last month ruled that the council had no legal basis for demanding control of the station's ownership structure. According to Dworak, the ruling opened the way for other stations to contest similar conditions in their broadcasting licences.
"I think they will find it much easier than we did," Dworak said. "They have the same conditions, and they are subject to the same radio and television law and constitution."
Monika Bednarek, the president of Radio Zet's owner Eurozet, would not comment on whether the station would contest the conditions of its licence through the courts.
But the regulator has no shortage of tricks up its sleeve. Rather than striking the clauses concerning its supervision of RMF's ownership structure from the station's licence, it has decided to launch an extraordinary appeal, which will put the case in the hands of Justice Minister Grzegorz Kurczuk, who will deliver a final, incontestable ruling.
"The NSA verdict partly undermines a significant part of the practices KRRiT has applied since 1993," said Joanna Stempień-Rogalińska, the council's spokeswoman. "This being the case, the KRRiT has decided to apply for an extraordinary appeal of this set of licence conditions. Since we can't request one ourselves, this will probably be done by the Minister of Justice."
According to the council, the court's oral verdict also leaves the issue of RMF's local stations open. The regulator has the right to return to the issue in its own time, analyse the arguments and return a second vote. But there is little chance that the regulator will change its mind since the original vote was unanimous, Stempień-Rogalińska said.
"We will wait for the written verdict, discuss the issue again and vote again," she said. "I suspect that the decision will be the same as previously - the KRRiT will again refuse to allow RMF to use local stations. The original decision was made absolutely without political motives, but as a purely economic decision. Only this time KRRiT will produce a far better
justification."
While the closure of RMF's local stations cost it at least €5 million (zł. 20 million), which it invested in technical infrastructure, the actual cost of the closure is impossible to pinpoint precisely, said Anna Kozłowska, the public relations director at RMF FM.
"The scale of losses, the cost of laying off 200 people and the closure of these autonomous radio stations is difficult to calculate, she said. "No company can afford investments of this size when they are at risk to the caprices of government officials. It would seem unthinkable that you build and develop media in Poland, create a radio concept that was unique on a European scale, which enjoys tremendous popularity, and a clerk comes along and says 'That's it, pack up and go home.' "
While striking against the efforts of private investors and the jobs of the station's employees, the closure of RMF's regional stations did not yield the improvement in the advertising revenues of local stations, Dworak said.
"The truth is that the past year and a half without local terminals has shown that the KRRiT acted against the interest of local media," he said. "In some cases the advertising revenues controlled by RMF FM did go to other local stations."
But since the majority of stations have weak programming and promotion and have little capital, they don't interact very intensively in the public and social life of a given region, Dworak said. They have small audiences, so it costs advertisers a lot more to reach their target group, and they are unable to compete with local printed media.
"Our analyses indicate that the majority of the funds from RMF FM local stations have moved to local newspapers, which is not subject to any capital restrictions, which is why it is developing much better than the radio market, Dworak said.
While the future of RMF's licence for local broadcasting will soon find itself in the hands of the Justice Minister, it is currently not clear whether the damage done to RMF through its closure will be reparable if the licence is reinstated. With a depressed advertising market there is no longer any certainty at RMF as to whether the local stations can be kicked back into life.
"We had to change the format of the station because radio with a local element has different programming and promotion compared to national stations," Kozłowska said. "We don't have the money that was invested in the local stations. Who will lay out the tens of millions of złoty to rebuild them? Who will take the risk of another format change? If KRRiT appeals and we have to wait for another hearing, then this could be an issue that we will not be able to address for another two years."
