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Media Matters: April 9, 2004


9 April 2004, Volume 4, Number 7
RUSSIA
THE BATTLE OVER BROADCASTING LICENSES
By Robert Coalson

Some details regarding the personnel and structures that will be overseeing the Russian media in the wake of the recent government restructuring have become clearer in recent days. Following the 9 March appointment of former Moscow State Conservatory Rector Aleksandr Sokolov as culture and mass-communications minister came the 15 March appointment of St. Petersburg Vaganova Academy of Russian Ballet Rector Leonid Nadirov as deputy minister, the 20 March appointment of former Deputy Media Minister Mikhail Seslavinskii as the director of the ministry's Federal Press and Mass Communications Agency, and the 6 April appointment of former Media Minister Mikhail Lesin as President Vladimir Putin's adviser on media-related issues.

Initially, the media sector hailed Seslavinskii's appointment, RIA-Novosti reported on 19 March. NTV Director Nikolai Senkevich called the move "logical and considered." "The rich experience and lofty human qualities of Seslavinskii have long been appreciated by the market."

"The electronic-media sector welcomes this new with enormous satisfaction," National Association of Telebroadcasters (NAT) President Eduard Sagalaev said. "We have telephoned dozens of people in the regions and the general opinion is that Mikhail Seslavinskii is a person who very well understands the industry and its essential problems and needs...and who is a profoundly honorable man."

The assumption at the time that these words were spoken was that Seslavinskii's agency would have broad, overall responsibility for the media and that Sokolov and Nadirov would concern themselves primarily with the ministry's responsibilities in the sphere of culture. That assumption has been shaken by developments in the last few days, as both Sokolov and Nadirov have taken the lead in making media-related pronouncements, and Seslavinskii has stated that his agency will have a much lower profile than the Media Ministry had (see interview below).

Sokolov has made some broad statements that have raised eyebrows. He has that he is concerned by the fact that television advertisements interrupt films and has said, "I think we can resolve this problem through protectionist measures at the state level." In his first interview after being named minister, Sokolov spoke of the need "to remove the distorting mirrors from the mass media" and said state television and serious newspapers "must undertake commensurate work in selecting personnel." He defended Putin's information-security doctrine and said his media will focus on implementing it. On 6 April, Sokolov urged the creation of a federal service for "oversight and control" of both the cultural and media spheres. This service, he said, would protect "cultural treasures, museums, libraries, archives, and control media-licensing matters."

Nadirov, on the same day, said that the ministry will create five departments, one of which will be exclusively in charge of broadcast licensing. He added that the licensing department will handle such matters either until the creation of the federal service that Sokolov has called for or until a new mass-media law is passed that provides for other mechanisms. He said a new draft media law will be submitted to the Duma before the end of the current session.

The tussle over broadcast licensing is the first indication that the new Culture and Mass Communications ministry might substantially differ from the old Media Ministry. Under the old system, the Media Ministry was responsible for both licensing and for the registration of print-media outlets. Under the new government structure, the latter function will be fulfilled by the Justice Ministry, a development that has concerned observers who charge that the ministry has in the past manipulated its right to register political parties and noncommercial organizations for political reasons.

As for broadcast licensing, the old Media Ministry exercised this function through the Federal Tender Commission (FKK), a panel of industry specialists that made recommendations regarding licenses. That commission has been widely regarded as one of the outstanding achievements of the old ministry. Sokolov acknowledged in "Rossiiskaya gazeta" on 1 April that his ministry was divided over whether licensing should be a function of the ministry or of Seslavinskii's agency, but said that he had recommended to the government that it be a ministry responsibility.

Clearly, broadcasters were looking for continuity in this area. In fact, NAT's Sagalaev, in his 19 March comments about Seslavinskii's appointment, expressed the hope that Seslavinskii's agency would retain control over the broadcast-licensing process, RIA-Novosti reported. Seslavinskii himself has spoken out against the kind of broad "oversight and control" service that Sokolov has endorsed, and has said that his agency should take on responsibility for licensing. As late as 22 March, he was holding out hope that such a decision would be made, even though Nadirov was already stating that the ministry would take on this responsibility. According to "Vremya novostei" on 31 March, the Economic Development and Trade Ministry and the Finance Ministry supported Seslavinskii's claim to this function.

Former FKK members have expressed doubt that Sokolov's representatives in the ministry will be able to carry out the licensing function as effectively as the FKK did. "If a machine is working, don't fix it," former FKK member Vladimir Pozner told gzt.ru on 8 April. Politcom.ru on 8 April reported that the new ministry intends to invite many former FKK members to continue working in the new licensing department, but that it is also discussing the matter with representatives of the state television and radio companies. "Our commission should be transformed into a completely independent group," Pozner was quoted by the website as saying. "It should not be connected with the ministry or the leading television networks, or with major advertising players."

On 8 April, Sokolov signed the order to set up the licensing department directly under the ministry, signaling the conclusion of this first struggle.

Seslavinskii seems resigned to the fact that his agency likely will be occupied with important, but far less powerful, functions. The agency will work primarily to promote corporate solidarity, to train journalists, and to organize exhibitions, among other activities. Seslavinskii will apparently lobby the interests of the media within the new ministry, rather than within the government as a whole. Whether he will be able to do so effectively remains to be seen, but the resolution of the broadcast-licensing issue -- one which the industry considers crucially important -- seems to indicate that, so far at least, he is having trouble finding a common language with Sokolov and Nadirov.

The biggest unknown in this process so far is the role of presidential media adviser Mikhail Lesin. Lesin remains a powerful figure in media circles, both because of his contacts within the government and his relationship with advertising giant Video International. However, he will have many responsibilities, including advising the president on promoting tourism and athletics and protecting intellectual-property rights. It is unclear how much attention he will be able to devote routinely to media issues. But in a political system in which personal relationships often play a key role, Seslavinskii's position within the ministry might well be boosted by the presence of Lesin within the Kremlin. "If the president listens to the advice of the former media minister, than the likely attempts of Aleksandr Sokolov to complicate the licensing process will fail," politcom.ru concluded on 8 April.

CONVERSATION
A DISCUSSION WITH FEDERAL PRESS AND MASS COMMUNICATIONS AGENCY DIRECTOR MIKHAIL SESLAVINSKII
RFE/RL's Russian Service (http://www.svoboda.org) broadcast this interview with the newly appointed director of the Federal Press and Mass Communications Agency, Mikhail Seslavinskii, on 22 March. The complete text of the interview in Russian can be found at http://www.svoboda.org/programs/tv/2004/tv.032204.asp. (Translation by Robert Coalson)

Anna Kachkaeva, RFE/RL correspondent: This morning in the ITAR-TASS auditorium, Culture and Mass Communications Minister Aleksandr Sokolov presented his team and became acquainted with his new sectors. The people gathered in the hall -- workers from the departments and services of the ministry -- were tense; they sat quietly and whispered. However, the audience applauded when the heads of the ministry's two new agencies [the Federal Press and Mass Communications Agency and the Federal Culture and Cinematography Agency] -- Mikhail Seslavinskii and Mikhail Shvydkoi -- were presented. The media were represented by a wide range of print and broadcast journalists. The theme of today's conversation with Federal Press and Mass Communications Agency Director Mikhail Seslavinskii is the nature of the new Culture and Mass Communications Ministry and of Seslavinskii's new agency.

Journalists have dubbed you Mikhail the Second [following former Media Minister Mikhail Lesin], and your powerful predecessor -- under whom the Media Ministry was created over the last five years -- did not want to settle for second or third place on the table of ranks, at least that's how it seems to me. I know as well that you had doubts about your new job. Nonetheless, you accepted the post. Doesn't it seem as if by accepting the directorship of the agency, you have acknowledged a reduced influence and the limited possibilities of the new entity compared to the old ministry and the old minister?

Mikhail Seslavinskii, Federal Press and Mass Communications Agency director: In principle, of course that is true. It would be laughable and naive if I puffed up my cheeks and said that everything will be the same and that my influence will not be less. But on the other hand -- and I have asked myself this question many times.... The president, having issued a decree on the new structure of the government, established new rules of the game. Clearly, this approach affected not just the ministries in our sphere, but all the ministries and other entities. You can't make exceptions, and it would be incorrect and naive to say that in the sphere of the mass media we should concentrate everything in one place. Yes, functions will be divided. But, honestly, the overall approach doesn't cause me any particular concern. Such systems exist in several countries in the world and many Western analysts and the financial markets have reacted positively to the new government structure. Moreover, from a purely human point of view, I can't say that I am upset at all that I won't have the authority to issue warnings to media outlets or to ask the courts to close them down. Yes, that is a lever of control, a function, power and influence. But, from a human point of view, of course, it is easier for me this way. Another person might see it differently.

Kachkaeva: Since you brought up warnings to the media...as I understand it an oversight service will be created that will be entirely separate. It will not be part of the ministry?

Seslavinskii: So far, that question is still under discussion. It is impossible to say now what kind of decision will be made. Perhaps within the ministry there will be a general oversight service, which I think would be a mistake.

Kachkaeva: You mean a service that would have oversight over television, radio, the press, national problems, and the preservation of cultural landmarks?

Seslavinskii: And the import and export of cultural artifacts. It is hard for me to imagine what kind of a service that would be and who could run it. How is he going to gather together people in the regional offices who could both decide when to censure an anti-Semitic newspaper and whether it is permissible to export a sixth-century stone ax?

Yelena Afanaseva, RFE/RL correspondent: Don't you have the feeling that you are stepping into the same river twice? I would remind listeners that before the Media Ministry was created, you headed a structure with a different name, but which concentrated some degree of control over the mass media.

Kachkaeva: It was called the Federal Broadcasting Service.

Afanaseva: The point is that you once headed a similar agency and now you are doing so again. Don't you have a feeling of...

Seslavinskii: Deja vu?

Afanaseva: Deja vu, for one thing. For another, over five years, your former boss Mikhail Lesin created a ministry. It was created and it carried out its functions. If you think about those five years and lay out the pluses and minuses, the ministry did something to improve transparency in the sector, to structure the media business.... At the same time, the ministry, the minister, or some individuals within the ministry -- I don't know how to put this -- have cleared out the media sector. I mean in the sense of freedom of speech, the situation with NTV, and then TV-6, and TVS, and so on. Now that period is over, the executioner did his deed and now he can leave. Don't you have that feeling?

Seslavinskii: I won't hide that there is something of this feeling. And it was in this connection that I had certain, purely human doubts. As they say in the United States, a person should change his profession every five years or so. But I want to say that before 1999 there was a division between the print and broadcast media. My federal service worked with the electronic media, and the State Press Committee was in charge of the press. Now there will be no such division within the media sector. That's the first thing.

Second, concerning the work of the ministry. I don't think that I can agree with the assessments that one hears these days to the effect that all the ministry's work can be boiled down to the events around NTV, TV-6, and MNVK. One judges the work of all executive-branch agencies around the world by the conditions that they create for the development of their sector. If you remember the situation five years ago and compare it with today, you can see that the number of media outlets has increased by a factor of 2.5. Now there are more than 40,000 of them. And each one, practically each one is a brick in the Great Wall of China that is democracy. Because such a quantity of media guarantees the democratic principles in our society. If the ministry had not worked for the intensive development of this mass-media sphere, then any blow, the closure of any large television channel or newspaper would strike to the quick and people would feel a real shortage of information. The media industry is, after all, an industry, and it develops quickly in comparison with other spheres of socioeconomic development. Every month we fought for the tax breaks that continue to be in effect in Russia and for the preservation of discounted customs duties for periodicals and academic books. We fought to make the government weigh in negatively on various draft laws that were introduced. You simply didn't notice this process.

Afanaseva: Just to clarify, if the status of your agency has been downgraded, will that make it more difficult for you to fulfill these functions, to lobby the interests of the sector?

Seslavinskii: Of course. As the head of an agency, I will not engage in drafting legislation. I will express the agency's point of view, as I did today concerning the bill on restricting media coverage of terrorist incidents.

Afanaseva: As I understand it, one of the most important questions that has not yet been settled between the ministry and the agency is the question of broadcast licensing, of the [Federal Tender Commission] FKK, which is one of the most important achievements of the last five years. That commission has relatively openly and publicly distributed broadcast licenses. And now, so far, as I understand it, there has been no agreement with the ministry as to who will now fulfill this function.

Kachkaeva: Yelena, you weren't at ITAR-TASS today, but I heard Nadirov say that since it is written in the president's order that either the ministry or the agency can fulfill this function, he answered succinctly: we have consulted with Minister Sokolov and since we can fulfill it, we will.

Afanaseva: That means that specialists in music, public figures like [sculptor Zurab] Tsereteli and [actor Gennadii] Khazanov, are going to be handing out radio and television licenses?

Seslavinskii: We don't know. There are several approaches. I think that nonetheless it is still not finally determined who will have this responsibility. Perhaps a special service will be created, perhaps these functions will fall on the ministry or the agency. In the meantime, there's no point upsetting the sector. We need a temporary solution, as the president's order allows, to maintain the functions of the old ministry, now an agency. The issue isn't one of issuing new licenses. A delay in opening a new television station is no catastrophe. The real issue is not to delay the extension of existing licenses because as soon as a license expires -- and this happens every day -- the owner is obligated to stop broadcasting.

Without a license, a person does not have the right to broadcast, it becomes illegal commercial activity. If I look back on the history of the Media Ministry, I can recall maybe five or 10 cases out of 3,000 in which some sort of problem arose with the extension of a license. That is, about 99.5 percent passed through automatically. Taking into consideration the fact that the documentary database and the human resources are in place, we should just leave everything as it is now and let things continue so as not to harm broadcasting. Then later, depending on what decision is made, the functions can be systematically turned over to a new organ.

Kachkaeva: Has Nadirov, perhaps during a smoking break, told you why it is so important for the ministry to take control of this function?

Seslavinskii: No, during smoking breaks we don't really talk about such things. But it seems clear enough. Licensing is a serious lever of control, a serious tool of influence. Not only in our ministry, but everywhere there is now a struggle for spheres of influence. This is going on on a very broad scale. But we shouldn't cause problems in the marketplace because of bureaucratic tussles.

Kachkaeva: Why does the ministry need an agency if it is going to carry out all the agency's functions? Oversight isn't there, licensing isn't there, registration is at the Justice Ministry. What are you for?

Seslavinskii: It will be a sort of Culture Ministry in the sphere of the mass media. We will hold exhibitions, competitions, and journalism training; offer grants; and support socially significant programming and socially significant literature.

Kachkaeva: A listener from Tver Oblast asks: "Irina Khakamada said that in the television networks and at many newspapers there are inspectors from the [Federal Security Service] FSB." I don't know about the print media, but in the ministries there are FSB inspectors, right?

Seslavinskii: There are no FSB inspectors, but in all federal executive-branch organs there are employees that previously worked in the FSB. This is a standard scheme that exists in all Western countries.

Kachkaeva: And in your new agency, there will be such a person?

Seslavinskii: So far, I'm the only one in the agency. I am not such a person.

END NOTE
YEVROFINANS ON THE MOVE

By Robert Coalson

"Novaya gazeta," No. 21, set off shock waves when it reported that the Yevrofinans financial group would purchase NTV as part of a deal to form a new holding company with Gazprom-Media and that it would name retired Federal Security Service (FSB) Major General and current All-Russia State Television and Radio Company (VGTRK) Deputy Director Aleksandr Zdanovich as the station's general director. The rumors of the NTV sale became so persistent that Gazprom was forced on 29 March to deny them, although the company confirmed that the long-standing deal to form the holding company with Yevrofinans should be completed by the end of the year.

The report that an FSB general would be put in charge of the once-maverick NTV seemed like a fitting, if depressing, conclusion to the bitter NTV saga. However, it made little sense. As an unidentified NTV manager told "Moskovskie novosti," No. 10: "From time to time our leaders have to go to G-8-type meetings and they have to be able to look people in the eyes. Therefore no one is going to do anything obviously stupid that might complicate such an important matter as looking people in the eyes."

Yevrofinans made the news during the recent presidential campaign when presidential candidate and former State Duma Speaker Ivan Rybkin alleged during an interview with RFE/RL that the company has close ties to President Vladimir Putin is seeking to acquire Russian television channels. Rybkin said that Yevrofinans owns 49 percent of ORT. According to onair.ru, Yevrofinans owns an unspecified stake in the Prime-TASS news agency. The company also owns just less than 30 percent of NTV and 49 percent of Gazprom-Media.

Although Yevrofinans will not buy NTV outright, the two companies will proceed with a 2002 agreement to form a media-holding company, of which Gazprom-Media will own 51 percent and Yevrofinans 49 percent. The details of the holding have not yet been made public, but it is expected to control majority stakes of all of Gazprom-Media's properties, including NTV, NTV Plus, the Sem dnei publishing house, Ekho Moskvy, TNT television, "Tribuna," and others. "We look at our investment in this project as a strategic investment into the dynamically developing Russian media market and are counting on a significant increase in the capitalization of the new media holding," Yevrofinans President Vladimir Stolyarenko said in a company press release when the deal was announced in September 2002.

The Yevrofinans financial group is wholly owned by Yevrofinans Bank, which was founded by the Central Bank. According to "Nezavisimaya gazeta" on 9 April, Yevrofinans shares are held by a range of state-controlled and private institutions including Vneshtorgbank, Vneshekonombank, Gazprom, Sibneft, Alrosa, and others. "All of them are similar in their close relationship with the authorities," the newspaper commented.

On 8 April, "Kommersant-SPb" reported that Yevrofinans had acquired a blocking stake in St. Petersburg's Peterburg television channel. Peterburg was created in 1998 after President Boris Yeltsin liquidated the Channel 5 national television station. The city was given 38 percent of the company, and Leningrad Oblast got 13 percent, with the rest being sold to private companies. After the 1998 financial crisis, several of the private companies surrendered their shares, and the city's stake rose to 68.2 percent, and the oblast's to 23.2 percent. In August 2003, Yevrofinans purchased the Leningrad Oblast share, after the oblast decided it was pointless owning part of a company that it could not manage. This week, Yevrofinans acquired an additional 2.5 percent of the station, giving it a blocking stake in the company. Peterburg First Deputy General Director Andrei Shishkin told "Kommersant-SPb" that the company expects "closer coordination" with Yevrofinans.

Peterburg has always been strictly controlled by the St. Petersburg city administration, both under former Governor Vladimir Yakovlev and under current Governor Valentina Matvienko. Local sources in St. Petersburg told "Nezavisimaya gazeta" that Yevrofinans is also known for its close ties with the administration. "Therefore the acquisition of the blocking stake in Peterburg attests that the channel will be under the strict control of city authorities," said Yurii Vdovin, chairman of the local NGO Civic Control. "Television here does not work to realize the citizen's right to information, but exclusively realizes the right of the city administration to disseminate propaganda, to shape public opinion in the interests of the ruling elite."

"Kommersant-SPb" seemed to underscore the political motivation for the deal by pointing out that it does not jibe very well with Yevrofinans's deal with Gazprom-Media. Peterburg and NTV are leading competitors both for viewers and advertisers on the St. Petersburg market, the paper reported. Likewise, Gazprom-Media's NTV-Media advertising company is in head-to-head competition with Mediainternational, the local branch of Video International, which sells advertising on Peterburg. Moreover, "Nezavisimaya gazeta" reported that the city and Yevrofinans would like to restore Peterburg's standing as a federal channel, which would put it in direct competition with NTV nationally and make it more difficult for Yevrofinans to drop its arrangement Video International, which is close to former Media Minister and current presidential media adviser Mikhail Lesin.

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