The bill

Fernández’s draft bill reserved one-third of the broadcast spectrum for nonprofits and non-governmental organizations, one-third for state media, and one-third for the private sector. It also instituted a new seven-member broadcast regulatory body, billed as a more independent replacement for an existing agency that reported directly to the president. In the new regulatory body, two members would be appointed by Congress, three by the president, and the remaining two by a council of governors and civil society representatives. Congress’s authority to appoint members meant that Argentina’s broadcast regulator might for the first time include opposition party representatives. But many observers were skeptical that the new committee would in fact be more independent than the one it replaced. “The regulator will rely heavily on political appointees, and the executive will have a lot of power in nominating its members and controlling its functions,” remarked a columnist for La Nación, a major daily.[1] Other critics said that the law was so vague it risked handing the government the power to revoke broadcast licenses arbitrarily.[2]

Several of the bill’s other articles directly impacted Clarín’s commercial interests, and to some within and outside of Clarín, appeared tailor-made to do so. For example, the bill barred any organization from owning both a cable provider and a broadcast channel in the same market—which Clarín did in four. Further, whereas previously an entity was allowed up to 24 national broadcast licenses, the new law would slash the number of permitted licenses to 10—Clarín had 12. The law further stipulated that no company should enjoy more than a 35 percent market share in either broadcast (radio and television) or cable—and Clarín claimed nearly 50 percent of cable subscribers nationwide. Though the bill did not deal with print publications directly, Clarín executives worried that the government might try to use its authority over broadcast licenses indirectly to influence what the Group printed in its newspapers.

Where a company had too many licenses or had a cable provider and broadcast station in the same market, it had one year to bring itself into compliance with the law by selling properties. Clarín had several years remaining on its broadcast licenses, which then-President Kirchner had extended for another 10 years in 2005. The proposed law would retroactively revoke this extension—and scale back Clarín’s reach in advance of the 2011 presidential election.

Having to sell off properties in such a short period could cost Clarín hundreds of millions of dollars. For one thing, it would mean giving up several revenue streams. For another, Clarín executives worried that the rush to sell would force the company to accept “fire-sale” prices for lucrative television stations. Besides that, the required sales would cut to the heart of Clarín’s integrated business model, which relied in large part on control over content and its means of distribution. For the most part, Clarín used its broadcast properties to produce content and its cable providers to distribute both its own content and that of other providers—a typical practice for media conglomerates the world over. Explains Clarín spokesman Martin Etchevers:

No competitiveness arguments, no economic arguments, and no technological arguments justify these [cable-broadcast cross-ownership] restrictions. Cable TV distributes the content of different providers and open [broadcast] TV is nowadays more a content producer than a distributor… [In the United States] ABC, CBS, Fox, [and] NBC are the main [content] producers for cable channels... Cable channels are [owned by the same companies that own] the main stations of open TV. [Under the new law], if you’re an open TV channel here in Buenos Aires, the law forbids you to distribute your content, your programming to the other provinces. You cannot establish a network.[3]

[1] Carlos Lauria, “Attacks on the Press 2009: Argentina,” Committee to Protect Journalists, February 16, 2010.

[2] Carlos Lauria, “Attacks on the Press 2009: Argentina.”

[3] Author’s interview with Martín Etchevers in Buenos Aires, Argentina, on February 10, 2010. All further quotes from Etchevers, unless otherwise attributed, are from this interview.