Licensees of broadcasting services

On September 15 the Official Gazette published Law No 26,053, enacted by the Senate on August 17, 2005 and promulgated on September 14, 2005, which amended Section 45 of the Broadcasting Law No 22.285 (the “Broadcasting Law”). Section 45 establishes the personal conditions and requirements that licensees of broadcasting services must fulfill.

The most widely announced amendment introduced by Law No 26,053 to Section 45 of the Broadcasting Law is the possibility that the licenses of broadcasting services can also be granted to any legal person regularly incorporated in our country. This now includes the possibility that a cooperative (“cooperativa”) or a non-profit civil association (“asociación civil sin fines de lucro”) can also be granted a broadcasting services license. In effect, the previous wording of Section 45 only allowed broadcasting services licenses to be granted to a “natural person or to a business association regularly incorporated in the country”.

This matter has now been definitively resolved, as before, there had only been a few court precedents allowing some cooperatives access to broadcasting services licenses.The new wording of Section 45 of the Broadcasting Law now allows licenses to be granted to “a natural person or a legal person regularly incorporated in the country”.

However, notwithstanding the amendment described in the previous paragraph, the new wording of Section 45 of Law No 26,053, , has performed other amendments that did not have the wide spread of the previous one, but they are no less important because of that.

In effect, the new wording of Section 45, in its subsection h) forbids that the licensee be a legal person rendering a public service, or that the licensee or the members of the board of administration and supervision of the non-commercial legal or non-profit persons or those natural persons as members of the commercial legal persons, or those from legal persons that conform the majority of the corporate will, be directors or administrators of a legal person rendering a public service, nor be majority shareholder of the same owning over 10% or more of the shares that conform the corporate will.

On the other hand, the new wording of Section 45 establishes that a non profit legal person rendering public services could be a licensee when there are no other licensees rendering the service requested effectively in the primary coverage area, or in the complementary services area, , in which case it must fulfill with some extra requirements (separate accounting, not incur in anticompetitive conduct, not deny the access to essential facilities, etc).

Another relevant amendment is the one from subsection f), when it refers to the exclusion of the application of the clause restricting licensees to have a legal corporate relationship nor direct or indirect subjection, with foreign press or radio broadcasting companies when “the assignment contracts of shares, quotas or the transfer of the ownership of the license have been executed prior to the date of effectiveness of Law No 25,570, and that have been approved by the Commission for the Defense of Competition.” Law No 25,570 (Law for the Preservation of Goods and Cultural Heritage) entered into effect on July 15, 2003.