SeminarWorkshop Drafting Administrative Regulations I Licensing TeleRadio Broadcasting Moscow, April

1
Seminar/WorkshopDrafting Administrative
Regulations ILicensing Tele/Radio Broadcasting
Moscow, April 14, 2006Dr Axel G Koetz and
Andrey ZhulinThis Document is complete only
together with the oral presentation and the
subsequent discussionIsolated use of individual
slides might cause misunderstandingsQuestions
Dr Axel G Koetz, Managing Partner, KPI
International Management and Policy
ConsultantsARCADIS BMB Project Office, 16
Mashkova Street, Moscow 105064axel.koetz_at_koetz-ag
.com Tel [phone] 926 322 7544, 7
495 937 7527or Andrey Zhulin, Higher School of
Exonomics, 7 495 921 3987
2
Contents

• Introduction of Project, Workshop Goals and the
  Participants
• Methodology and Present Activities in Drafting of
  New Administrative Regulations
• Key Problems Preliminarily Identified in the
  Present Regulatory Situation
• Comments from the Participants / Discussion
• International Experience
• Customers Experience and Problems
• Principles and Key Elements of Proposed New or
  Optimized Regulations
• Proposals Wishing List from Participants /
  Discussion
• End of Meeting

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1IntroductionProject, Workshop Goals,
Participants
4
IntroductionThe Project
Public Sector Institutional Reform C1
Administrative Regulations C2 Service
Standards C3 Indicators C4 E-Government
Support in the Drafting Of 39 Administrative Regul
ations
5
IntroductionTeam Participants

• The Team
• Elena Guseletova, Deputy Team Leader
• Valery Yanvarev, Senior Expert
• Andrey Zhulin, Expert
• Dr Axel G Koetz, International Senior Expert

• The Participants
• Ministry of Culture and Mass Communication
• Rosokhrankultura, Mass Media Department
• Representatives of the Clients and external
  Experts
• Higher School of Economics

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IntroductionGoals of the Seminar

• NOT Final Recommendations
• Making Decision Makers and Experts More Familiar
  with our Methodology of Drafting Administrative
  Regulations
• Sharing First Findings / Ideas / Models
• Learn about International Experience
• Exchange Opinions
• Give Input / Proposals for Further Work

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2. Methodology and Present Activities in
Drafting of New Administrative Regulations
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Generalized ProcessDrafting Administrative
Regulations)
Preliminary Task Definition Prel Process Model
Desk Research
On Site Research Internal External
Process Description Functional Analysis Resource
Needs Analysis Local Practice Analysis Best
international Practice Analysis Organizational
Quality Criteria
Standards
Strategy and Optimization Guidelines
Process Design
Drafting Regulation
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Key Elements of Analysis

• Process description
• The Process behind the Service as it is
• Functional Analysis
• Are the right things done by the right
  institutions.and what is necessary at all to
  fulfill the law ?
• Resource Needs Analysis
• Which and how much resources are necessary to do
  the job
• Local Practice Analysis
• What specifics have to be taken into
  consideration
• Best International Practice Analysis
• How are other countries or our main partners
  doing it ?
• Organizational Quality Criteria
• Is the process as such efficient

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Key Elements of Conception

• Definition of the Goals pursued with the
  Regulation
• Reference to the law is not enough
• SWOT Analysis in respect to those Goals
• Strengths
• Weaknesses
• Opportunities
• Threats
• Key Problems and Needs for Change
• Where is actual procedure obsolete and in any
  case change necessary ?
• Strategy and Optimization Guidelines
• The Principles and Key Elements in design of the
  future Regulations

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LEGAL BASES OF DEVELOPMENT OF ADMINISTRATIVE
RULES I

• Approved by the order of the Government on
  October, 25th, 2005 the Concept of administrative
  reform in the Russian Federation in 2006-2008 and
  a plan of measures on carrying out of
  administrative reform
• The plan-schedule of prime development by federal
  enforcement authorities and considerations by the
  Governmental commission on carrying out of
  administrative reform in 2006 of standards of the
  state services, administrative rules of execution
  of the state functions and grantings of the
  services directly mentioning constitutional laws
  and freedom of citizens, and also rendering
  essential influence on activity of legal persons
  and the citizens who are carrying out enterprise
  activity without formation of the legal person "
  (it is approved by the report of session of the
  Governmental commission on carrying out of
  administrative reform from December, 23rd, 2005
  47)
• The governmental order of the Russian Federation
  from 11/11/2005 of year ?679 About the order of
  development and the statement of administrative
  rules of execution of the state functions and
  administrative rules of granting of the state
  services

For April, 14th it is approved on the Commission
2 rules. Projects of 6 more rules are prepared.
The first rules on licensing (??????????????) is
prepared
(Machine Translation RUS-gtEN)
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Legal bases of licensing of tele-radio
broadcasting

• The law of the Russian Federation from December,
  27th, 1991 2124-1 About mass media
• The GOVERNMENT of the RUSSIAN FEDERATION. The
  DECISION FROM December, 7th, 1994 ?1359 About
  licensing a television announcement, broadcasting
  and activity on communication in the field of
  television and broadcastings in the Russian
  Federation (in ???. The Governmental orders of
  the Russian Federation from 10/3/2002 N 731)
• Regulations about to Federal service on
  supervision of observance of the legislation in
  sphere of mass communications and protection of a
  cultural heritage (???. The governmental order of
  the Russian Federation from June, 17th, 2004 N
  301)
• The MINISTRY of CULTURE And MASS COMMUNICATIONS
  of the RUSSIAN FEDERATION. The ORDER from July,
  22nd, 2004 N 22 About the FEDERAL COMPETITIVE
  COMMISSION ON TELE-RADIO BROADCASTING
• The GOVERNMENT of the RUSSIAN FEDERATION. The
  DECISION from June, 26th, 1999 N 698 About
  carrying out of competitions on reception of the
  right to ground radio tele-radio broadcasting,
  and also on development and development of the
  new radio-frequency channel for the purposes of
  tele-radio broadcasting (with changes for
  February, 23rd, 2001)

(Machine Translation RUS-gtEN)
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3.Key problems preliminarily identified in the
present regulatory situation
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Activties necessary before starting a programs on
own channel on an audience more than 200,000
persons
Development of frequency (???? ????)
Passage Competitive Selection (???)
Registration of mass-media (????????????????)
Start of the Program
Licensing Tele-radio broadcasting (???????????????
?)
Licensing Activity in Areas of rendering
Services of communication (??????????????)
Reception of the Permission to
use Frequencies (????????)
(Machine Translation RUS-gtEN)
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Key problems

• Consumers "see" all process (registration of
  mass-media, ????, ????????????????,
  ??????????????, ????????), the greatest problems
  (time, costs) concern to a stage of gathering of
  documents at each stage
• Direct problems at interaction with service
  Rosohrankultury return of the complete set of
  documents at the incomplete complete set or
  mistakes that tightens term of licensing
• Problems regarding competition in ???
  insufficiency of time for presentation of
  concepts of an announcement, questions on
  criteria of a choice of winners

(Machine Translation RUS-gtEN)
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4.Comments from the Participants Discussion
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5.International Experience
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Relevant International Environment
Philosophies

• EU EU Member States
• USA
• Canada / Australia / NZ
• CIS

Client Orien- tation
Fiscal Elements
Methodologies
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Relevant Benchmarks in the Field of Broadcast
Licensing

• Old European Union Countries with a long
  tradition in Tele / Radio regulation and
  different, content-based approaches
• United Kingdom
• Germany
• France
• USA with an extremely diverse system with over
  1000 economically independent players
• Canada, New Zealand, Australia which apply very
  different regulatory models in a reform-friendly
  environment
• CIS and East European Countries

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Broadcast Licensing UK

• All Licensing and Supervision of private
  Broadcasting is done by OFCOM
• Strong content supervision in private TV
• Advertisement and Competition system
• Elaborated System of control and fines
• Contenders have to proof economic capacity based
  on Business Plan

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Broadcast Licensing USA

• Licensing by FCC
• Individual licenses for over 1,000 economically
  independent stations
• Licensing only on the level of Frequencies
  allocation / permit to build a transmitter
  station
• Licensees can be asked to allocate time to public
  radio / community radio
• Decentralized process
• Highly formalized procedures (forms, internet
  based auctions)

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Broadcast Licensing Germany

• TV Program Licensing under jurisdiction of the 16
  States
• States have sole legislation, federal level is
  excluded by the constitution
• Procedures are coordinated in interstate
  agreements
• Interstate Agreement on Broadcasting
• KEK (Media Concentration Commission)
• Association of State Media Authorities
• Federal Government is responsible for frequencies
  management, antimonopoly legislation and
  respective law enforcement.
• Federal Network Agency
• Federal Antimonopoly Agency

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German Licensing System General Overview on
Players
State Responsibility Contents and Diversity of
Opinions
KEK Concentration Commission
ALM Media Authorities Organization
15 State Media Authorities
State
Federal Networks Agency
Federal Antimonopoly Agency
Federal
Federal Responsibility Frequencies and Economic
Competition
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Licensing Procedure Germany

• Public Broadcasting System units in any case have
  a License per law
• Private Radio/TV needs a license
• Broadcasting License given by the State Media
  Agency
• After Broadcasting License is given, Federal
  Networks Agency assigns a frequency (Regulated by
  Telecommunication Law)
• Transmission providers are licensed by the
  Federal Networks agency in another process
  (Telecommunication Law)
• In case of Merges of Broadcasting companies the
  KKK (Media Concentration commission created by
  interstate agreement) checks the influence on the
  user concentration and BKartA (Federal
  Antimonopoly Agency) checks the economic
  concentration
• Cable transmission and Satellite Transmission is
  under State law

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Broadcast Licensing France I

• Licensing by Conseil Superieur de lAudivisuel
  (CSA)
• Centralized System
• CSA licenses / supervises Programs as well as
  Frequencies
• Agreement between CSA and operator on Program on
  Content
• (EU Content 60 French Content 40 thereof)
• Responsibility for Program supervision and
  penalizing deviations from law / license /
  contract.

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Broadcast Licensing France II

• Procedure Call for Candidates, Detailed
  Applications, Council decision
• Priorities
• protection of the multiplicity of socio-cultural
  expression
• diversification of operators
• prevention against abuse of a dominating position
  in the market, or unfair competition
• Elaborated Criteria, mainly oriented to
• Program Rules
• Advertisement Rules
• Support to French Cultural Policy
• Diversity of opinions / antimonopoly rules
• Restrictions on foreigen capital

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Broadcast Licensing Far Away ICanada

• Canadian Radio-Television and Telecommunications
  Commission (CRTC) for Licensing
• Ownership
• Technical capacity
• Financial capacity
• Program
• CRTC may call for competition
• Publication
• Public Hearing
• Industry Canada (Min of Economy) has to be asked
  for frequency assignment
• Proces duration 8 18 Months
• IT based application (and supervision) process

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Broadcast Licensing Far Away IIAustralia

• Broadcasting Services Act (BSA) of 1992
• Public Broadcasting (ABC, SBS) under special
  statutory Law
• Broadcast licenses and frequencies assigned by
  ACMA (Australian Communications and Media Agency)
• ACMA created in 2005 as a merger of
• Australian Communications Authority (ACA)
• Australian Broadcasting Authority (ABA)
• ACMA to o consult Australian Competition and
  Consumer Commission before carrying out certain
  decisions

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Broadcast Licensing Far Away IIINew Zealand

• Broadcast Regulations follow the New Public
  Management style of NZ administration and is
  nearest to US style
• Former Broadcasting New Zealand (BCNZ) dissolved
  and transformed into 2 state owned broadcasters
  for TV, Radio (Radio later privatized) with
  economic goals
• Licensing mainly by frequency allocation, no
  content licensing
• Market based approach of frequency use
• Auctioning of Licenses (computer aided)
• Tradeable Frequencies
• Special regulations for cultural, local and
  ethnic programs
• Ex-post regulation of broadcasting standards by
  Broadcasting Standards Agency

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Broadcast Licensing Far Away IVSingapore

• Singapore Media Development Authority the
  relevant Agency
• Contens and frequency licensing in one hand
• Content supervision
• Ownership supervision
• Formalized, electronic process of application

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Broadcast Licensing CIS East EuropeLaws of
Armenia and Ukraine

• Content and Frequencies Regulation
• Applications Models
• Competition Models
• Commission / Council with formal independence
• Program and Frequencies License in one hand
• Content, advertisement etc. control
• Elaborated Sanctions System

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EU RegulationsEU Radio and TV Directive

• Directive 97/36 demands
• Nondiscrimination Policy and no restrictions of
  broadcasting
• General Guidelines for Programs
• Specific Guidelines related to EU Content (Art.
  4-7) 10
• Advertising (Art. 10). Teleshopping, Sponsoring
  and Limits to it (Art. 10 - 19)
• Minors Protection, Public Order, Right of Reply
  (Art 22-23)
• No involvement of the EU in national Licensing
  Regimes
• Core interest in 3 economic topics Free Market,
  EU Production Advertising

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Conclusions IPrinciples

• Leading PRINCIPLES of Regulation (selection)
• Program diversity
• Minimization of opinion concentration
• Minimization of economic concentration merger
  control
• Definition of non-eligible program providers
  (State, Political parties)
• Protection of Viewers (particularly Minors)
• Sustainability of program provision
• Promotion of wanted program elements (EU
  content)
• Local contents
• Capacity for open channels, minority programs
  etc.
• Restrictions on unwanted program elements
• Promotion of the media industry (including
  advertisement, teleshopping, pornography,
  games....)

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Conclusions IIDimensions of Regulation

• WHAT is regulated / licensed ?
• Frequencies
• Programs and contents
• Satellite transmission
• Cable transmission
• Upgrade to digital radio / TV (DVB-T, DAB-T)
• WHO regulates ?
• State (Ministries, Agencies)
• Quasi autonomous bodies (commissions,
  councils...)
• One, two or more units
• Decentral versus Central Units
• One stop shopping or agency rallye ?
• Real one stop shopping
• Automated second decision
• Agencies rallye with unknown result

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Conclusions IIaProcess Formalization and Content
Orientation
USA Forms IT
Canada IT-based Process
Formalization
New Zealand Minimal Formalization
Australia
Germany UK France Armenia Ukraine
Content oriented Checklist System
Content-Orientation
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Conclusions IIIEU versus US

• European Standard Strong Content Orientation
• Licensing with a strong orientation to program
  contents
• Program supervision in the hand of the regulator
• Frequencies assignment in the hand of the
  Regulator or in an almost automatic process
  following licensing
• Avoidance of Economic Concentration and of Media
  Concentration
• Procedures not very formalized (checklists,
  general clauses)
• Limited, renewable Licenses
• US Standard Mainly Frequency Licensing
• High degree of standardization / formalization
• Economically oriented auctions
• Little interest in contents, mainly frequencies
  regulation
• Lots of formal (non-program) rules and reporting
  needs imposed on program provider
• Limited, renewable licenses

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Conclusion IVProcesses

• How are free capacities publicized ?
• Applicant has to find out
• Public tendering initiated by the agency
• Public tendering following application
• HOW works application ?
• Checklists, information requests
• Forms and questionnaires
• Electronic applications
• Online Auctioning
• HOW works decision making ?
• Formalized or arbitrary procedures
• In the licensing bodies
• Under participation of the general public
  (Hearings)
• By national/regional/local (political,
  elected,...) stakeholders

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6. Customers Experience and Problems
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Taking the Customers ViewpointSome Questions

• Do we experience unnecessary requirements for
  Application ?
• Do we experience to be victims of missing
  coordination between involved institutions ?
• Do we experience too long time for simple
  administrative acts ?
• Do we feel a situation in which the result of our
  application is not predictable ?
• Do we have the impression that the fees asked for
  are not in relation to the service ?
• Do we feel an expectation of Administration /
  Experts for additional payments ?

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Sample problems from interviews of applicants
(initial stage of interviews original comment)

• And it is valid, this sum, a competitive
  payment, will return, if it has lost. And if it
  has won, it should pay all sum. More
  interestingly another. If someone has developed,
  as it thought, for itself the channel or
  frequency for an announcement and has paid to
  radio-frequency bodies for development of this
  frequency, that is up to the technical conclusion
  on use here money nobody will return to it. That
  is the one who has won competition will take
  advantage of it. It is good, if thanks will tell.
  If very decent, maybe, will return this money,
  and can and not return. It is not certain by the
  law. The one who develops the channel
  ???????????, it risks in this case, therefore it
  is better, if frequencies will be developed under
  the request of speakers by those who in any case
  here will not lose.

(Machine Translation RUS-gtEN)
41
Sample problems from interviews of applicants
(initial stage of interviews original comment)

• On last competition it was declared 19 person.
  They come to the appointed day to Moscow and
  protect the concept on the competitive
  commission. On all about all it is given exactly
  three minutes. A sand-glass are put. You come,
  you speak Hello, at us 6 number under the list
  . They overturn a sand-glass, and for this three
  minutes you should convince the competitive
  commission that your concept the best
• There there were any fine blots as it happens
  there not so the letter have put, there not so
  inverted commas have put. That is these three
  months on it and are given, that if at people of
  a piece of paper not by way of, it is necessary
  to put into their order. In time to us have
  licensed, approximately also in 4 months.

(Machine Translation RUS-gtEN)
42
Sample problems from interviews of applicants
(initial stage of interviews original comment)

• First, certainly, it is not necessary to
  complicate procedure because it all becomes valid
  year from a year more difficultly and more
  difficultly, and it is more complex, i.e. it is
  already valid as the law of greater numbers and
  greater systems starts to work, i.e. the system
  starts to work on itself, i.e. always it is
  necessary to reach the certain level differently
  it somewhere will collapse. Here, i.e. here, I
  consider, that those requirements which are now
  shown, more than enough, I suspect, that half of
  those documents it is possible as though and to
  clean for advantage of business because ?????????
  documents of the same charter, I do not
  understand, what for it. Other, tax it agree,
  but enough one document, and knowing an INN
  always it is possible to check up, if it very
  much would be desirable you, full data on any
  company.
• .. Here, as to all licensing activity in the
  field of communication, there really challenge
  because, goes it is visible repartition of
  functions, repartition of the market. It is
  money, frequencies are money, therefore there a
  complex situation, here. Also it would be
  desirable there that there was a uniform body
  which owned all completeness of the information,
  it should be for certain . Because if you pay
  money, to you should tell precisely here to you
  frequency. There is no this frequency, means, you
  precisely know this objective decision, instead
  of subjective.

(Machine Translation RUS-gtEN)
43
7. Principles and Key Elements of Proposed New
or Optimized Regulations
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A General Decision

• Real Reform
• Customers view
• Goals of the policy
• Questioning Laws
• Questioning
• Structures

Administrative Regulations

• Incremental
• Optimization
• Perfection of System
• Closing of Loopholes
• Inefficiency Reduction
• Not touching the Law

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Overall Principles
Orient to the respective defined goals
Administrative Regulations
Are clearly programmed and efficient
Minimize Burden to Clients
Are, as far as possible, selfregulating
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(Some) Overall Principles

• Orient to goals, not to present laws and
  regulations
• Value analysis of all process elements and
  institutions
• Ensure maximal simplification of all processes
• Implement automatic self-regulation components
• Minimize cost and work for the customer
• Approximate to EU Standards

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Key Question

• Can Customers Problems be solved by making
  Rosokhrankultura more efficient
• Or ist the true problem in the interaction
  between the Players
• Applicant / Operator
• Rosokhrankultura
• MoITC
• MoITC Agencies
• And what can be done here in our process ?

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Principles and Key Elements

• Admin Reform Criteria
• Apply Principles of Value Analysis to all
  requirements to customer and work steps
• Apply one unchangeable set of rules and
  requirements
• Implement One stop shopping principles for
  applicants
• Accelerate Processes
• Implement clear appeal rules

• Technical Criteria
• Reduce application cost by clearer procedures
• Implement IT-based application
• Optimize competition system
• Coordinate and accelerate inter-agency procedures
  with one single criteria system and mutual
  acknowledgement of decisions
• Improve economic attraction by longer licenses
• Elaborate escalation procedures in penalizing of
  licensees malpractice

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An Alternative Approach

• Create a one stop shopping system with program
  licensing and frequency assignment in one hand
• By merging institutions
• By clear rules and appointing one lead
  institution and mutual acknowledgement of
  decisions and documents
• Simplify and Optimize application and processing
  procedures
• Use IT procedures in application
• Make competition procedure easier more
  effective
• Follow a clear set of decision criteria like...
• Program and media diversity (viewers/listeners
  market)
• Economic diversity (advertisements market,
  Newspapers)
• Sustainability of the program (realistic business
  plan)
• Have a supervision and penalization system with
  clear escalation procedures

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8. Proposals Wishing List from Participants
Discussion
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9. End of the seminarThank you for
participation and inputWe are always available
for further commentsHope to see you again in
our 2nd Seminar providing proposed regulations
(End of April)