Turkey: Foreign Media Ownership Restrictions to Be Eased

Text of report by Ercan Yavuz in English, published by Turkish newspaper Today’s Zaman website on 30 August

30 August 2008: Restrictions on foreign investor participation in broadcasting companies will be relaxed with amendments to be made to the current Radio and Television Supreme Council (RTUK) Law, which currently allows foreign companies only partial ownership (up to 25 per cent) of media institutions in Turkey.

[Picture caption] The ATV-Sabah Media Group was bought by Turkuvaz Media, a subsidiary of Calik Holding. Twenty-five per cent of Turkuvaz is owned by the Lusail International Media Company of Qatar. [end caption]

A draft RTUK bill prepared by the council and sent to the Prime Ministry in January 2008 has been reviewed by the government as part of efforts to harmonize Turkish legislation with that of the EU.

In the draft of the Third National Programme, which maps the EU- required reforms that the government aims to introduce, the government pledged that restrictions on foreign capital participation in media would be relaxed by 2009 with amendments to be made to Law No 3984, related to the broadcasts of radio and TV stations.

It was also noted that all restrictions on foreign capital participation in the media would be lifted two years before Turkey is granted full membership to the bloc and that new regulations will go into effect simultaneously with Turkey’s membership.

According to the current RTUK law, any media establishment have a maximum of 25 per cent of foreign capital in Turkey and a foreign person or company that has shares in a private radio or TV station is not allowed to have shares in another radio or TV station. Foreign and native shareholders are not allowed to own privileged shares, either.

According to the draft RTUK bill, foreigners will be allowed to have shares in at most two private radio and two private TV stations. Foreign capital ownership in the first radio and television stations owned will not be more than 50 per cent of the paid capital, while it will not be more than 25 per cent for the second radio and television stations owned by foreign capital. Foreign investors will not be allowed to have shares in local radio and TV stations, which will save these institutions from a monopoly of foreign capital. Nevertheless, restrictions on foreign capital in ownership of local radio and TV stations could be changed with later amendments, as noted by the draft bill.

According to the bill, political parties, foundations, labour unions, professional organizations, associations and local administrations, along with companies established by these institutions or the ones in which they have shares, their business partners and institutions involved in exports, imports, marketing and finance will not be granted permission for radio and TV broadcasts. These institutions will also not be allowed to be partners in companies that have permission for radio and TV broadcasts.

In line with the Turkish Commercial Law, permission for radio and TV broadcasts will only be granted to limited companies established with the aim of communication, education, culture and arts services. Any such company will be allowed to establish one radio station and one TV station.

In a radio or TV station that has annual ratings of more than 20 per cent according to the rankings of the RTUK, a real person or a legal entity or capital group will not be allowed to have shares of more than 50 per cent.

If the annual ratings of a radio or TV station with more than 50 per cent of its shares owned by a real person, legal entity or capital group exceeds 20 per cent, it will lower its shares to less than 50 per cent by offering them to the public or selling some of them within 90 days after being notified by the RTUK.

If the annual ratings exceed 20 per cent due to ownership of shares in more than one radio or TV station, shares will have to be sold to lower ownership of shares to less than 50 per cent. If this rule is violated, broadcasting permission granted to that TV or radio station will be cancelled.

An approval from the RTUK will be sought for offering shares in radio and TV stations to the public before receiving permission from the Capital Markets Board (SPK) in line with the Article No 2499 of Capital Markets Law.

In line with the EU chapter on the free movement of capital, legal obstacles and administrative regulations that lead to discrimination between foreign and domestic investors and bring special responsibilities to foreign investors will be lifted. Regulations that create discrimination between foreign and domestic investors in the telecommunications, energy, mining, sea transportation, civil aviation and media sectors will all be abolished.

In EU countries, there are no restrictions on foreign capital for ownership of radio and TV stations; however, shares of foreign capital in these countries do not exceed 20 per cent in many fields, including media, due to their established economic structure. The share of foreign capital in Germany is 5 per cent, 8 per cent in Italy, 10 per cent in Spain, 11 per cent in the Netherlands, 17 per cent in Denmark and 19 per cent in Austria and Greece.

According to the amendments to be made to the RTUK Law, radio and TV broadcasts will not be allowed to have content that is immoral and/or that includes obscenity. They will also not be able to broadcast programmes that promote threats from terrorist organizations.

The RTUK authorities have also been rearranged in the draft bill. The current regulation, which rules that the RTUK cannot monitor or cancel programmes before they are broadcast except in cases of court rulings, does not exist in the bill. The bill allows either the prime minister or a minister assigned by him to cancel broadcasts in situations of national security or when there is a strong risk that public order will be threatened.

In cases when programmes are broadcast that will arouse societal anger, the RTUK will be able to cancel the broadcast of the programme and its decision to cancel broadcasts will be affirmed by a court within 24 hours.

The new bill gives the authority to assign frequencies for national radio and TV stations, which are currently authorized by the Telecommunications Board, to the RTUK. The licence period of all broadcasts will be eight years. Broadcasting licenses to media institutions will be given by the RTUK. Private radio and TV stations will offer at most 49 per cent of their shares to the public and the shares will be traded on the stock exchange.

Former president vetoed draft over national interest concerns

An RTUK bill drafted by the Democratic Left Party (DSP)- Nationalist Movement Party (MHP)-Motherland Party (ANAVATAN) coalition in 2001 was vetoed by then President Ahmet Necdet Sezer on the grounds that it would allow foreigners to own a majority of the shares in media institutions. If the bill had been approved by Sezer, a striking change would have been permitting foreigners to buy 100 per cent of the shares in a radio or TV station. Sezer named national interests as the reason for his veto.

Originally published by Zaman website, Istanbul, in English 30 Aug 08.

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