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Russia: Duma Considers Limits On Foreigners' Media Ownership

The bitter feud around NTV and the idea of attracting foreign investors as a potential safeguard against state control have spurred interest among lawmakers to regulate foreigners' ownership of Russian media companies. RFE/RL's Moscow correspondent Sophie Lambroschini looks at some of the ideas being floated in the Russian State Duma.

Moscow, 17 April 2001 (RFE/RL) -- Foreign investment in Russian media has become a sensitive issue since the head of NTV television, Vladimir Gusinsky, earlier this year appealed to U.S. businessman Ted Turner to acquire shares in NTV as a way of barring partly state-owned Gazprom from gaining control of the channel.

The State Duma in coming days may consider three proposals to limit access to the media market for foreign investors. Russian law currently places no limit on foreign ownership of media concerns. This contrasts with the United States, which limits foreign ownership to 20 percent.

Alexandr Chuyev, a deputy from the pro-Kremlin Unity faction, last week said he would present a bill to limit foreign ownership of electronic and print media to 50 percent. Chuyev says he has the backing of at least seven deputies.

"I think that the same way the law on elections says that foreign individuals, companies with more than 30 percent foreign capital, and states cannot contribute money to Russian election [campaigns], you can apply [that rule] to media organizations...because there are not so many of them. So that's why we should protect their freedom and independence."

Chuyev says he is "absolutely convinced" that any investor with a controlling stake would try to bend editorial policy in his favor. By way of an example, he says that a Chinese investor could broadcast misleading propaganda about the investment climate in Russia.

He also says he would like to make his bill retroactive as a way of invalidating any past deals, including a Turner bid for NTV, that may already have been made.

The Duma considered a similar proposal two years ago when well-known media businessman Rupert Murdoch expressed an interest in buying Russia's ORT television. That bill, which banned the state from selling any media shares to foreigners, died before it was ever put to a vote.

A second bill to be considered by the Duma would impose an even lower limit for foreign ownership in media -- to 30 percent.

A third bill proposed by some liberal deputies would impose a 25 percent maximum stake for all investors.

Viktor Pokhmelkin, the Union of Rightist forces deputy head of the Duma Legislation Committee and the author of the bill, explains that in his opinion the real issue is not xenophobic fear of foreigners' policies in Russia, but about anyone -- whether the state, an oligarch, or a foreigner -- gaining control over the media.

Pokhmelkin says his proposal, by splitting responsibility and control, would be the Russian media's best chance at achieving balanced coverage.

"Of course, it is a step in the direction of public television because any demonopolization -- by distributing control over media into different hands, into the hands of different owners that often represent different social [or financial interests] -- is exactly a step toward public television [and] away from state television and radio."

Experts say that given the investment climate, with foreigners already wary of putting money into the country, none of the options are especially attractive.

The economic weekly "Vek" said it was "unlikely" that a foreign investor would put money into a company that it can't control, especially in Russia.

Kim Iskyan, a media investment expert at the investment bank Renaissance Capital, tells RFE/RL that new restrictions would dampen investor enthusiasm, but she says foreigners dealing with Russia are used to it:

"It certainly casts a [cloud] over potential investment and raises the level of uncertainty considerably. [I don't think] it will completely chase away any potential investors because foreign investors are quite accustomed to the investment environment shifting."

The Press Ministry has distanced itself from the Duma proposals.

Deputy Press Minister Mikhail Seslavinsky told ITAR-TASS last week that the mere discussion of a bill to limit foreign investment in Russian media would discourage potential investment in all spheres.

He suggests that the Duma wait until the situation surrounding NTV calms down and only then make a decision on investment limits.

In the past the Press Ministry has been very careful in its assessment of foreign investment in media. In 1999, for example, then newly appointed Press Minister Mikhail Lesin said foreign capital should not be banned from the Russian media market.

Chuyev admits to a disagreement with the Press Ministry, but he claims that his idea to limit foreign investment has the support of the presidential administration.

Indeed, Russian authorities have shown an increasing willingness to impose media restrictions in the name of safeguarding what they call "information security." A controversial doctrine adopted last September by the Security Council and endorsed by President Vladimir Putin underscored this concern. It specifically cites foreign economic and financial activity in the information sphere as a threat to information security.