Post-Soviet Media Law & Policy Newsletter


Issue 10     Benjamin N. Cardozo School of Law     September 10, 1994

USAID MEDIA PARTNERSHIP GRANTS: Further Details

    In the last issue of the newsletter, we printed excerpts from the major USAID request for applications to manage the US-Russia Media Partnership Program.  The deadline for applications for proposals was August 15, 1994 and it is expected that an award will be made by the end of the fiscal year.

    The process of selecting among grantees and who was jockeying for inclusion is amazingly complicated.  Some insight into a fairly closed process can be gained from reviewing a document issued August 1, 1994 which amended the grant application process to provide questions and answers posed by prospective applicants.  We include a portion of those questions and answers here.

    Q.  In Section IV, the RFA specifies:  “In consultation with the Management Group, USAID will select the final 10-20 from these two lists.  Selections will be made within one month after receiving each list.”  In order for this program to be embraced by media organizations in the United States (and in Russia, too) it must  be seen as being free of political ideology, dedicated only to strengthening freedom of the press in Russia.  U.S. media organizations have a general fear of government-sponsored programs involving the press, especially when large sums of money for equipment are involved.  The question is:  can the RFA be amended so the final selection of partnerships is made by the Management Group, in consultation with USAID, USIS and the advisory committee?  Florida International University)

    A.  The final selection of partnerships will be made jointly by the Management Group and USAID.  USAID is required to be involved in this procedure to avoid conflicts of interest on the part of the Management Group.  USAID also has information that may be useful in the final selection of partnerships.

    Q.  While the objective of the RFA is the development of financially viable and politically independent non-governmental media, we are concerned about the ultimate viability of this objective given the nature of current governmental impediments.  While the RFA provides for conferences on legal and regulatory issues which impede the development of the russian media, it does not address such major impediments as state control of newsprint production, the unpredictability of increases in media licensing fees. etc.  Does the Agency have plans to address these issues through other means?  If so, please explain what is envisioned.  (Institute of International Education)

    A.  Issues such as state control of newsprint production and media licensing fees directly impinge upon the financial viability and political independence of the nongovernmental media in Russia.  It is consequently possible to establish a partnership to address these concerns.  Such a partnership might involve media support or advocacy organizations in the U.S. and Russia.  Plans for further USAID activities in these areas have not yet been made.

    Q.  The program states that it is seeking “competition” between potential U.S. partners interested in participating in the project.  On what basis does USAID anticipate that these partners would “compete” to be allowed to be in a partnership?  What specific incentives for such competition does USAID foresee? (Internews)

    A.  USAID’s policy is to award its funding on a competitive basis.  Selections of U.S. partners should thus be carried out competitively to the greatest extent possible.  As far as incentives for competition are concerned, the Program offers participant U.S. organizations the opportunity to establish long-term relationships with independent media organizations in Russia and provides support for a wide range of cooperative projects with such organizations.

    Q.  Can we pay American partners directly to help supply television programming for Russia? (Internews)

    A.  Yes, if such an activity is deemed by the Management Group to be the best use of available funds.  The Management Group might also investigate other funding opportunities for programming acquisition outside of USAID.

    Q.  The Corporation for Public Broadcasting (CPB) is a private, nonprofit organizations created by an act of Congress.  It is not owned by public broadcasting stations, nor are they subsidiaries.  If CPB is a member of the Management Group Consortium in the U.S.-Russia Media Partnership Program, will that in any way effect the eligibility of public broadcasting stations to participate as partners?  (Corporation for Public Broadcasting)

    A.  No, public broadcasting stations would be eligible for partnerships if CPB were a member of the Management Group, provided that CPB recuse itself from all selection procedures in which these stations are potential candidates.

    Q.  We ask that the Agency provide guidance on the following questions concerning the financial parameters of the Program.  What ratio does the Agency have in mind for the allocation of total funding for the Management Group vis-a-vis the partnerships?  Within each partnership, what ratio does the Agency have in mind as to the amounts allocated to a) partnership administration, b) equipment purchases/shipping, and c) partnership cooperative activities?  What is the funding ceiling for the U.S.-Russian Media Partnership Program?  (Institute of International Education)

    A.  The estimated total funding for the program is $10 million.  USAID does not expect the total administrative costs of the Management Group to exceed 10% of this amount.  USAID has not established binding financial parameters for allocations of funds within partnerships.  We strongly encourage organizations competing to participate in the Management Group to propose allocations most suitable to their vision of program needs.

    Q.  Since the RFA precludes the recovery of salary and overhead expenses incurred in developing and undertaking partnership activities, would the Agency be willing to authorize the payment of consulting fees (in addition to normal travel expenses) for the time a partner organization spent in the field developing and undertaking partnership activities?  (Institute of International Education)

    A.  The payment of consulting fees to representatives of U.S. partner organizations will be allowed to the extent that these fees are deemed necessary by the Management Group to carry out partnership activities.  In all likelihood this would be the case primarily for longer consultations.  Conditions for the use of such fees will be determined jointly by the Management Group and USAID.

    Q.  As to the purchase or donation of media equipment, many items of U.S. origin would not be compatible with Russia electrical and other (i.e. Pal television) infrastructure.  Will source and origin waivers be easily obtainable?  (Institute of International Education)

    A.  USAID hopes to obtain source and origin waivers to purchase foreign-made media equipment for this program and hopes to guarantee duty-free entry of purchased and donated equipment into Russia.  At this time, however, USAID can make no commitments on these subjects.



Developments in Licensing and Registration

    Aleksei Samokhalov has recently become a legal advisor to the Russian Federal Service on Radio and Television Broadcasting.  We are pleased to publish an excerpt from his recent overview of Russian laws relating to the media:

    The Statute “On Mass Media,” enacted on February 8, 1992, is the main legislative act of the Russian Federation regulating the media (i.e., a periodic publication, radio, television, video program, or any other form of distribution of mass information).  Under the statute, a media outlet may be founded by a private individual, an enterprise, organization, state body, or any combination of the above entities.

    Let me summarize some current issues:

    Licensing: Existing law requires that broadcasters obtain a broadcasting license obtained from the federal or regional Licensing Commission. However, these Commissions have never been established, so the procedure is being executed in accordance with Decree No. 500 of September 26, 1991 “On Licensing of Television Broadcasting, Radio Broadcasting, and Communication Activity in the Field of Television and Radio Broadcasting in RSFSR.” This decree empowers the Ministry of Press and Information (defunct since February, 1994) to issue broadcasting licenses with the consent of the Ministry of Communications and on the basis of recommendation from the Commission on Broadcasting. 

    A license to use a frequency is to be issued by the Communications Ministry with the consent of the Press Ministry and the State Broadcasting Company of Russia. The applications for these non-transferable licenses must be reviewed within three months and are effective for five years.

    I have recently drafted the new provisional regulations “On Licensing of TV and Radio Broadcasting” which are being considered by the Russian government. These new provisional regulations will create only one type of license instead of two licenses. If adopted, these regulations would control until the introduction of the Broadcasting Statute that is currently under review by Parliament. 

    For example, licensing would be done by the Federal Service on Television and Radio Broadcasting in accordance with its statute adopted on May 7, 1994 (Decree No. 458, Rossiyskaya gazeta May 19, 1994). Except for the licensing and registration of both state and non-state broadcasting entities, this statute (which I also drafted) requires the Federal Service to:

    — coordinate the activity of national and regional state T.V. and radio broadcasting companies;
    — promote the dissemination of objective information to the Russian and world public concerning the political, economic, and socio-cultural life of Russia;
    — participate in the drafting of legal and other normative acts in the field of broadcasting;
    — create a uniform state policy for resolving industrial, technical, and financial issues, as well as issues involving scientific research and training in the sphere of broadcasting.

    Registration: The abolition of the State Inspectorate on Defense of the Freedom of the Press presents some interesting problems. If the founder of a press publication wants to disseminate it throughout Russia, abroad, or several provinces, registration must be done by the Federal Committee on the Press.  In all other cases, the registration was to have been done by the territorial bodies of the Inspectorate. However, on July 31, 1994, the Decree of the Russian Government abolished the Inspectorate and has not created a system of registering local publications.

    How much does it cost to register?  The current formula is based on an inflation-adjusted quantum called “minimum wages.” Founders of media must pay 10 minimum monthly wages (about USD 90) for registering national or inter-regional publications, and 15 minimum wages (USD 130) for the registration of broadcasting entities.  Foreign entities must pay USD 500.

    Under Article 19 of the Statute, if the mass media entity is organized as an enterprise it shall also be registered in accordance with the Russian Statute on Enterprises and Enterprising Activity, and thus can engage in activities other than those involving mass media.  Since no legislation on non-profit entities has been adopted, it is difficult for non-commercial mass media to be registered as such. 

    Advertising: The 1992 Mass Media Statute regulates certain aspects of the contents of broadcasting materials. For example, advertising shall not exceed 25 percent of total air time, while non-coded erotic programming is allowed only between 11pm and 4am. Advertising of alcoholic drinks and tobacco products is prohibited by the 1993 Statute on Health Care in Russia, but it has not stopped such ads, since responsibility for the violation of this provision or a formula of what constitutes an advertisement has not been worked out.  Advertisers argue that they provide information about alcohol and tobacco but not advertising. The Decree of the President “On Protection of Consumers from Unfair Advertising” of June 10, 1994 establishes a procedure to punish unfair advertisers in the sphere of banking, insurance, and financial services.

    The Decree envisions withdrawing business licenses from the financial companies that promise unrealistic dividends and profits in their advertisements.

    Copyright: The 1993 Copyright Statute (see PSMLPN, Issue 3, p.3-5) states that audiovisual works (such as, movies, TV, and video films) are objects of copyright protection (Article 7), while directors, screenplay writers, and composers are owners of the products (Article 13).  Articles 40, 41, and 42 of the Statute establish the rights of broadcasting and cable entities to record programs and use them in any form with certain limitations.  The Statute is not clear as to whether the broadcasting entities keep the copyright on the listing of their programs or they are public property.

    Freedom of information in Russia is based on Presidential Decree # 377 “On the Guarantees of Informational Stability and Broadcasting Standards” of March 20, 1993.  Its minimum standard, that fully conforms to international treaties, includes:

    — the option to choose from different programming in accordance with the regional, national and other interests of the audiences;
    — a combination of the freedom of opinion with the right of reply;
    — protection of a program’s artistic integrity by not allowing advertisements to disrupt a program;
    — journalistic responsibility for the information they supply;
    — journalistic independence from political parties and partisan positions.

    Access to Information: Another Presidential Decree—“On Additional Guarantees of Citizens’ Rights to Information” (of December 31, 1993; see PSMLPN Issue 4, p.2-3) provides for the creation of a system (still non-existent) of informing the public of the activity of state bodies and on new legal acts.

    Taxation: Numerous Presidential decrees provide for tax relief for state television and radio companies.  They are not required to sell a portion of their hard currency earnings to the state at fixed rates, nor are they required to pay value-added taxes or duties on imported equipment.

    Draft Legislation: The State Duma is discussing drafts of the Broadcasting Statute, the Bill on Advertising, and the Bill on the State Support for the Mass Media.  The latter envisions the creation of the National Fund for Development of Mass Media which would control stocks of the state-run national TV and radio entities, publishers, publications, etc.  It would also decide the amount of state support these entities would receive. Unfortunately, Russian journalists have few means of influencing the content of these bills and other legal documents that concern the press.

Aleksei Samokhvalov
Information Agency “Russian Law”
Moscow
(fax +7-095-519-7943)