Indicators for Risks to Media Pluralism

Why?

The media market concentration based on market shares could not be computed. While the Registrar General provides access to some ownership data, financial data (revenue, advertising etc.) was not available a) per media company b) as market share and c) for the media sector.

Why?

There are few mechanisms to limit the so-called horizontal concentration (the control over several vehicles of a same media type). Decree-Law nº 236/1967 determines the maximum number of television grants – 10 in the whole national territory, being a maximum of 5 in the VHF band and 2 by state. Decree-Law 236/1967 establishes that concessionary or permissionary broadcast companies “cannot be submitted to other entities constituted to establish a single directin or orientation, through chains or associations of any kind", but this guideline is not regulated and largely disrespected. Brazilian Media System was formed on the basis of national networks that guarantee control of the head stations (Globo, Record, Bandeirantes, SBT etc..) even if they do not own their affiliates. Decree 52.795/1963, that regulated the Brazilian Telecommunications Code (CBT), sets as a prohibition that a partner of a broadcast services company (in any modality) is also part of the shareholders composition of another grant to provide the same service in the same location. In other words, a single person or company cannot own two stations of the same nature in the acting location of the vehicle (city or region). But this limit is frequently bypassed by means of using different people in the shareholders composition of the stations. One example is the presence of stations Record e RecordNews, both belonging to the same group, in some cities. Regarding fusions, acquisitions and changes on sharehold control, the Ministry of Communications and the National Telecommunications Agency are the responsible organizations for monitoring acts of control and concentration, but without the power to authorize or veto this kind of operation beyond legal prevision.

Decree 9.138/2017, published by Michel Temer’s government, changed Decree 52.795/1963 ending the device that conditioned the direct or indirect permission of concession or the permission to previous consent of the federal government (Art. 90) In the general plan, Brazil has Conselho Administrativo de Defesa Econômica (‘Economic Defense Administrative Council - Cade), responsible for analyzing fusions and acquisitions and investigate monopoly practices. But the action of the Council is very timid in the Media Market. Also, there is no clarity in the legislation about the hierarchy of prerogatives between Cade (in the general scope) and MCTIC and Anatel (in the specific scope). Cade also does not use any criteria based on specific aspects of the sector, such as the concern for plurarity. In the printed press and on the internet, there is no limit to any horizontal concentration, leaving only the acting possibilities of Cade. Regarding control, broadcasting stations may have foreign agents in their shareholders composition, but up to a maximum of 30%.

Regulatory Safeguard Score: 
Analyzed Aspects: 54, Safeguards: 5, Score: 9,25%

Why?

Cross property is a central dimension in Brazilian media concentration. Grupo Globo, for example, has vehicles or networks with a central role in open TV markets (Rede Globo, audience leader), cable TV (with the content generated by the subsidiary GloboSat, including GloboNews and dozens of other channels), Internet (with the largest Brazilian news portal, Globo.com), Rádio (two of their networks, Globo AM/FM and CBN, are among the ten largest audiences). Grupo Globo also operates in the recording and publishing markets. The same is true for other groups like Record (RecordTV and RecordNews, on open TV; newspaper Correio do Povo and the R7 portal among the largest in the country) and RBS (with a Rio Grande do Sul affiliate of Globo on open TV, two newspapers among those of larger circulation – Zero Hora and Diário Gaúcho – besides other print publications, two radio networks, national Gaúcha Sat and regional Atlântida, ClicRBS online portal, and many other investments in digital media).

In the absence of relative market participation, MOM’s methodology proposes the use of audience data to measure cross property concentration levels, adding up the four largest groups in audience. We have thus organized the data, not considering internet audiences (for which we have the digital population percentages reached by the portals, and many of the groups have largely accessed portals) and cable TV. The data have been weighted according to the participation in each type of media in Brazilian’s consuming habits, measured by Pesquisa Brasileira de Mídia 2016. The weighted sum of the groups’ radio and TV audiences and print vehicles readership gives 74.7%.

Grupo Globo alone concentrates 43.86% of the audience, not considering their internet participation with the most accessed portal in Brazil. In that direction, Grupo Globo launched a campaign in October, 2017 stating that they reach 100 million Brazilians daily, around half of the Brazilian population, with the cross property of different vehicles.

Score:

 SOURCES:

Leaders (2016), Lancement de Nessma Mobile

Why?
In the case of vertical concentration (when an entity or group controls different stages of the productive chain, such as production, programming and distribution) and of cross property ( when a group controls media in different markets), the only law to address the issue is Lei nº12.485/2011, which regulates paid TV under the Serviço de Acesso Condicionado (Conditioned Access Service). It prevents the control and property relation between radio broadcast and video production/distribution, and of telecommunications of collective interest, as phone, internet and cable TV services, for example.
Thus, these two kinds of agents of the audiovisual sector and entities which own concession and permission for radio broadcast can’t control more than 50% of the collective interest telecommunication participation operator’s social capital. Conversely, these telecommunication operators are not allowed to have larger than 30% participation of the total and voting capital of radio broadcast companies. In this example, concentration is defined by the shareholding participation only, and not by the number of licenses.
The Agência Nacional de Telecomunicações (National Telecommunications Agency) can block a fusion or acquisition or stop the grant of new licenses if the entities in question disrespect the limits established by Law 12.485/2011. The law also predicts the obligation to dedicate programming time to audiovisual content, but only in some channels that offer access conditioned audiovisual communication (SeAC). The same law predicts punishments by regulatory authorities for programmers who don’t fulfill these quotas. Besides Anatel (National Agency for Telecommunications), the Economic Defense Administrative Council (Cade) can evaluate merges and acquisitions or investigate anti competition practices. However, it should be noted that there aren’t any mechanisms preventing the control of broadcasting companies (either radio or TV) and print media. Based on that lack of legal basis, the Brazilian media system was organized on cross property of vehicles, reinforcing concentration in the hands of a few groups both in national and regional scales. There are no legal or normative basis regarding journalistic activities for online distribution in terms of limitations to concentration or the need for previous authorization from any competent authorities for acquisition, merges or other similar events. This is valid only for property and control relations between radio broadcast and audiovisual production/programming and collective interest communications, according to Law nº 12.485/2011.

Regulatory Safeguard Score: 
8 of 13 (Percentage – 61%)

WHY?

Transparency is evaluated, according to MOM’s methodology, considering “active transparency” scenarios (where data would be available on both media and companies sides, accurately and transparently); and “passive” (when the companies don’t publicize their information, but respond to information requests); an intermediary scenario, where, despite the absence of transparency initiatives stemming from the companies, there are public data available; and scenarios with no available data and an explicit attempt to conceal media property.

Thus, MOM’s methodology predicts, among other paths to obtain and verify property data, a consultation process to information made available by the companies, as well as the soliciting of information, with a determined waiting time and a second request when the first isn’t answered. MOM Brazil’s team followed that procedure for the owners of the 50 vehicles evaluated, but didn’t receive any positive answer. We go in details about this situation in the discussion about transparency challenges. Among the few received answers, one of them said: “for strategical reasons, the solicited information is not public.”

The pathways available for the acquisition of these data are tortuous, limited and not very transparent. As the indicator D7 (“Regulatory Safeguards: Ownership Transparency”) points out, the are no legal or constitutional mechanisms available which require public service provider companies which benefit from public concessions, such as broadcast (radio and TV) companies, to publicize their information. Even if those companies should legally update their shareholding constitution in Commercial Registries and Notary Offices, there are no efficient transparency and information access policies for following this information. Besides, as the Registries are of local or regional (state) character, the access possibilities to this information oscillates according to the state or municipality in question – in many of them, every consultation costs an amount close to 60 dollars.

The existing information system with data about radio and TV concession ownership do not guarantee up to date data, nor the possibility to effectively arrive at individual owners. As the companies, in general, have no transparency initiatives of their own, the barriers include the existence of numerous legal entities connected to these companies.

Finally, despite the fact that, in most cases, it has been possible for MOM investigators to arrive at the ownership data, through complex and indirect pathways, made even more obscure for the general public, the absence of responses to information requests and the difficulties with the available information systems point to a medium to high risk for ownership transparency, according to the methodology definitions below.

Why?

In Brazil the normative planning of public administration does not establish a specific legal or constitutional device that determines the obligatoriness of information publishing – regarding corporate structure, shareholders composition and board of directors – by providers of granted public services whose category includes the broadcast of sounds and images. Regarding the specific case of radio broadcast, companies must report to the Ministry of Science, Technology, Innovations and Communications (MCTIC) the changes in shareholders composition, fusions and acquisitions. However, the publishing is not mandatory. The changes in control involving foreign capital have a specific treatment on legislation. Information provided by the operators are made available in National Telecommunication Agency’s databases called “interactive systems”. Among them are Sistema de Acompanhamento de Controle Acionário (‘Shareholders Control Surveillance System’ - Siacco), that brings the Stations’ shareholders composition, and Sistema de Informação dos Serviços de Comunicação de Massa (‘Mass Communication Services Information System’ - Siscom), that makes available information on the providers of each broadcasting service allowing consultation by service modality or location (states or cities). The law nº 10.610/2002 determines that, until the last day of each year, companies must communicate, to commercial registration organizations (boards) or civil registration of juridical persons (registry offices) the shareholders composition. However, neither commercial boards or registry offices have transparency or information access policies effective enough to serve as tools for public control. Besides that, as they have local or regional character (state), the access possibilities to these information vary according to the city or state where they are.

 Regulatory Safeguard Score: 

1 out of 6 – High Risk (Regulation: 16,6 %).

WHY?
As it is possible to infer in the text about media and politicians relations in Brazil, the relations of political affiliation are present in many ways, not always directly in the formal ownership of big groups. Few of the big national media groups have a public officer among their current owners – as is the case of the Medioli family, with Vittorio Medioli. Other families, such as Câmara, Faria and Mesquita, are families that have already had elected politicians and important political positions in the country. The Macedo family, which controls Record and Igreja Universal (IURD), also has a political party under its control, the PRB (Brazilian Republican Party).

Besides that, there is a considerable number of politicians who own or are shareholders of communication media. On a federal scale, 32 federal deputies and 8 senators are currently direct partners of broadcasters. The affiliate network phenomenon is central to these political associations. The big networks exert their power locally through affiliation relations, where local broadcast transmit most of their programming originated at the network heads, and also feed the national networks with local information. In most cases, these affiliates are owned by local and regional groups led by politicians or families of political tradition that generally own more than one vehicle. This media ownership political control phenomenon has been called, in academia and in the public debate, “coronelismo eletrônico”. Many examples of these cases are present in our text about political affiliations.

This phenomenon is also present in many of the local media. There are researches that identify a political connection in at least half (1,106) of the 2,205 investigated community radio stations.

Besides, considering the vehicles and networks controlled by Empresa Brasileira de Comunicação (EBC- Brazilian Communication Company), it is also possible to state that there is a relevant political affiliation. The difference is that it doesn’t refer to a control through ownership, but through the rigging of the public environment through political indication of the company’s directors.

Given this scenario, even though one can’t claim the direct ownership of politicians in many cases, we understand there is a medium to high risk of political control of vehicles and distribution networks.

Why?

The absence of a legal framework that regulates fund use for state advertisement in media, combined to selective uses of these funds to buy editorial support for government actions, reveal a high risk of political control and silencing of criticism through the allocation of these funds.

The Normative Instruction defines the so-called technical criteria (Article 8) according to which a) technical market research and data should be used to identify and select the most adequate programming, according to each publicity action’s characteristics, b) investments destined to each vehicle should consider the respective audiences, based, whenever possible, in market technical data, researches or media studies and c) be oriented by a wide programming always when other vehicles with regular situation exist in the Midiacad.

However, cross reference of audience data and advertisement allocation reveal wide contradictions in the so called “technical” criteria. A sample of our universe of vehicles has been analyzed in relation to discrimination of advertisement grants, based on data solicited through the Lei de Acesso à Informação (Public Information Access Law) and organized by journalists of website Poder360.

The analysis shows significant distortions in 2016: as an example, Veja magazine (Grupo Abril) received 50% more in relation to their readership; O Globo newspaper (Grupo Globo), 66% more; and Época magazine (Grupo Globo) 83% above their proportional readership. The TV Band network (Grupo Bandeirantes) received advertisement funds which correspond to 95% more than what would be proportional to their audience. In the same direction, a survey by Blog O Cafezinho, revealed the raise in funds destination for vehicles that supported the impeachment of Dilma Rousseff and Temer’s government: the newspaper Folha de S. Paulo received a 121% raise, the newspaper Estado de S. Paulo, a 229% raise, Revista Época, 252%, Revista Veja, 489%, TV Record, 510% and Revista IstoÉ, 1384%. In 2017, a single campaign, the government’s campaign for the approval of the social security reform, used up R$ 100 million, 55% of the total predicted for publicity campaigns in the year, R$ 180 million.

Also in the state and municipal scales there are accusations of other forms of arbitrary state financing, such as the subscription of magazines without a public bid for the distribution in schools.

WHY?

When we consider that there are legal mechanisms to protect the network neutrality, the situation in Brazil is positive. There is a specific legislation that regulates the network neutrality – Law 12.965, of April 2014, called Brazilian Civil Rights Framework for the Internet. In the Brazilian Civil Rights Framework for the Internet, network neutrality is defined as a principle regarding the Internet use in Brazil. The law defines that the one responsible for the transmission, commutation or routing is obliged to address any data package as isonomic, that is, with no content, origin and destination, service, terminal or application distinction. There is a clear definition that network neutrality must be preserved by telecom carriers. At the same time, this is the legal precept that ensures the effectiveness of such principle in Brazil.

The regulation of such Law details some aspects related to network neutrality. The regulation became effective in May 2016, as of Decree number 8771/2016, of the Executive Power. It brought, among other aspects, a detailed list of the admissible hypotheses of discrimination in Internet data packages or traffic degradation. The Decree stated that the discrimination or traffic degradation are exceptional actions, as they can only take place as a result of technical requirements indispensable to the adequate provision of service and application or prioritization of emergency services. There is also the provision that foresees that technical requirements indispensable to the adequate provision of service and application must be observed by the company responsible for the transmission, commutation or routing activities inside their own network, in order to maintain their stability, safety, integrity and functionality. Finally, it states that indispensable technical requirements are those deriving from addressing network security issues, such as sending messages in bulk (spam control) and exceptional cases of network congestion, such as alternative routes in case of interruption in the main route and in emergencies.

Regarding the enforcement of these principles and inspections, there is a set of institutions in charge of different aspects each. The National Telecommunications Agency (Anatel) is responsible for inspecting and assessing infractions regarding technical requirements, in agreement with the Internet Steering Committee's (CGI.br) guidelines. This means following the CGI.br principles of Internet Governance and Use in Brazil, for example. The Brazilian Competition Defense System is responsible for assessing economical infractions. The Brazilian Civil Rights Framework for the Internet also states that the company responsible for the transmission, commutation or routing must refrain from causing harm to the user, as defined in the Brazilian Civil Code. There are also sanctions that may be applied by Anatel, such as warning, fine, temporary suspension or obsolescence. In the Decree that regulates the Brazilian Civil Rights Framework for the Internet, there is also a provision that foresees the creation of an inspection and transparency system in order to verify if the network neutrality principle is being guaranteed or violated. After inspecting and assessing the infraction, each part of the system would define the applicable sanctions.

However, it is noticeable that the implementation of the inspection and effectiveness of the network neutrality is weak - none of the points described in the implementation indicators are met, except for the notion of responsible institutions. There is zero rating and prioritization, there is no history of sanctions applied because of the breaches regarding network neutrality, and today the user does not have tools to confirm the transparency of the network management. That makes it difficult to identify when there is a blockage or traffic degradation, for instance. The scenario then is ranked medium, near high risk.

Existence of legal safeguards: 5/5 (100.0%)
Effective implementation of the safeguards: 1/6 (16.6%)
Total: 54.5% (MEDIUM RISK)