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Discussions On Public Broadcaster Reforms Continue in Georgia

By Vladimer Napetvaridze
Friday, January 5
Western Experience shows innovative funding methods for Public Broadcasters

On December 22, Parliament adopted amendments to the bill on Public Broadcaster, despite rigorous criticism from the civil society organizations and other private broadcasters.

The opponents asked President Giorgi Margvelashvili to veto the amendments bill. The bill, which was initiated by thirteen members of the ruling party and approved by Parliament on its third reading, ensures further expansion of powers of the Georgian Public Broadcaster (GPB).

The amendments on Public Broadcaster law include 4 aspects: (1) The TV company will no longer have to announce public procurement calls when purchasing media products or services; (2) The Public Broadcaster will be able to place commercials throughout its entire airtime, except for non-working days and working day prime times (from 19:00 to 24:00). The total Length of commercials per 24 hours will be increased to 60 minutes instead of 30 minutes, while the amount of free airtime for social ads will be decreased from 24 to 12 minutes. GPB will also be allowed to accept sponsorship of programs and TV series; (3) The annual budget of GPB is GEL 52,5 million and according to the revised bill the company will no longer be obliged to return unused funds to the state budget. GPB will be allowed to use budgetary funds for supporting “start-ups and innovative television, radio and online products, as well as for fostering development of the broadcasting field. (4) The nine-member board of trustees will no longer be able to reform the Broadcaster bodies without Director General’s consent.

From four main amendments given in the proposal, the initiatives about commercial ads and new regulations about the public procurement have caused controversies. Public organizations and private broadcasters are concerned about a potential influence of new regulations over the transparency of GPB’s activities.

Institute of Development of Freedom of Information (IDFI) emphasizes the importance of the public procurement law: “It ensures efficiency and transparency of the activities of the broadcaster. In addition, the high standard of transparency makes it possible to monitor the activities of the Public Broadcaster, which promotes public trust towards the broadcaster,” says the statement of IDFI.

Another most controversial aspect of the bill on commercial ads caused concerns of private broadcasters. A joint letter signed by 28 private broadcasters (except Maestro, GDS and Imedi TV) say that amendments to the Georgian legislation about commercial ads will have a negative impact on private broadcasters. "Guaranteed revenues from the budget give the public broadcaster a possibility to gain monopoly in the advertising market," says the joint letter.

Representatives of Public Broadcaster don’t share the opinion of public organizations and private broadcasters. They announce that planned changes to the law will support GPB to develop.

“We are living in a society where the private prosperity has an advantage over the public one. The situation is very problematic and people who oppose the changes are fighting against the public prosperity in favor of the private one. They are trying to benefit their own personal interest," said Giorgi Gvimradze, the head of the Public Broadcaster's information service.

European Experience on Funding Public Broadcasters

The Regulations about funding a Public Broadcaster is widely discussed all over the Europe. Some states are trying to decrease the influence of private sponsors over public broadcasters and with this aim, adopt the regulations that ban commercial ads during the prime time or ban commercials completely. In some cases, the financial loss of broadcasters is compensated with the household, and equipment license fees or other alternative sources.

According to the analytical research Analysis of Government Support for Public Broadcasting prepared by Nordicity for Radio-Canada the funding models for public broadcasting across western countries includes at least five different models: (i) parliamentary grants, (ii) equipment/receiving license fees, (iii) universal household license fees, (iv) income tax charges, and (v) hypothecated industry levies. Some countries use only one of these methods; some use a combination of two or more of the methods.

The Table 1 gives examples of 12 European countries on funding methods of public broadcasters
Among Western countries, the most common method of public funding is the equipment license fee, the fee paid for ownership of a television. Over the past decade, developments in communications technology give consumers the opportunity to use a variety of devices and online services to find television programming, which made equipment license fees an increasingly poor proxy for consumption of public broadcasting or television programming.

To face the new reality, several countries have moved from funding PBs from equipment license fees to receiving license fees. According to this new model, households pay the license fee regardless of the type of equipment they use: television, computer, smartphone or tablet.

But certain countries have made more substantial reforms. Finland decided to impose an income tax charge. France and Spain introduced hypothecated industry levies as a public funding method alongside license fee models. Both countries tried to potentially stabilize their television advertising markets by removing their public broadcasters’ supply of airtime from the market.