In a report published Thursday, auditor Ernst & Young states that the National Broadcasting Council (KRRiTV) has failed to develop a clear set of criteria for its licensing decisions and lacks proper procedures for monitoring broadcasts and revoking licenses. Moreover, the council is at times unable to give any explanation for its decisions, which merely exacerbates the general impression of arbitrariness.
'The criteria [for broadcasting licenses] set by the parliamentary bill are very general, which leads to a situation, where KRRiTV's license decisions are highly subjective,' argues the report. The council also fails to take proper advantage of its army of experts, who are employed at considerable cost. Their analyses and opinions are largely irrelevant since they are treated merely as 'materials for discussion.'
KRRiTV also lacks any procedures for license revoking decisions, which are currently based on anecdotal evidence, provided by anonymous informers or derived from complaints by outraged listeners or competitors.
Furthermore, the audit found that the council had failed to investigate the true shareholder structure of firms applying for licenses. Despite the law, which states that foreign entities may control no more than 33 percent of a radio or TV station, some firms managed to circumvent the requirement thanks to complicated structures, involving numerous Polish-based vehicles which are in fact owned by foreign businesses. Canal+, a digital TV platform, is cited as one example of a foreign-controlled electronic media firm. ITI's complex structure, which contributed to the failure of its IPO last year, gave rise to speculation that the company, which is the owner of terrestrial station TVN, is also in fact mostly foreign-owned.
'This is in breach of the Radio and TV parliamentary bill and a Supreme Court ruling,' the auditors say.
The report has also laid bare the inadequacies of the KRRiTV's market research and monitoring of license-holding stations. During the ten years of its existence, claim the auditors, the council has failed to keep up with the state of modern technologies or with the financial situation on the market. This may have created favorable conditions for the public media to exploit the leverage that government aid gives them to push their purely commercial competitors out of the advertising market.
The audit was funded with the help of European Union PHARE pre-accession funds and is seen as a stepping stone in the country's alignment with EU media market regulations.
The report has served as a basis for the draft of a new KRRiTV rulebook. Under the new set of rules, it would be impossible for the council to take decisions without stating the basis on which they are made. A well-known example of such practices was the 2001 decision to deny station TV Puls the same limit of advertising airtime enjoyed by its competitors. When asked for the reasons for this discrimination, the council found itself in dire straits and eventually refused to provide any information, despite lengthy consultation with lawyers.
Despite the devastating criticism leveled against the regulator, the audit report failed to attract a significant amount of media attention with only one national newspaper, Rzeczpospolita, running the story. KRRiTV members were unavailable for comment last week.
Aleksander Nowacki
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