THE ORDER OF CREATING AND LICENSING OF AUDIOVISUAL MASS MEDIA

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The academic article deals with the complex scientific research of the order of creation and licensing of audiovisual mass media. Besides, attention has been paid to the individuals possesing the right to create audiovisual mass media, and to legal forms that these mass media may be created.

Keywords: licensing, mass media, business entity, economic agent, legal entity.

 

In the early 1990s, in the countries of Central and Eastern Europe, including Ukraine, in the process of post-socialist transformations, introduction of Media Reforms through the transition from centralized to democratic, independent and pluralistic mass media, under mass media control and the censorship of state, gained its urgency. The above-stated ideas determine the relevance of the study.

The study aims to determine the establishment and licensing of audiovisual mass media, to identify problems in its normative regulation and to develop proposals and recommendations for solutions.

A wide range of scientists dedicated their works to the creation and licensing of audiovisual mass media, including D. V. Andreiev, O. A. Voznesenska, N. M. Ilchenko, O. V. Kaplii, T. A. Kostetska, H. M. Krasnostup, I. V. Liudvyk, V. N. Monakhov, V. V. Moskovtseva, T. M. Slinko, Y. S. Shemshuchenko and others.

A specific form and an important element of state regulation of audiovisual mass media is a licensing system. In the legal literature, licensing system is determined in different ways. Thus, A.V Kharitonov, in the extensive sense, interprets the licensing system as “a set of relationships that arise to ensure public safety between the executive authorities, local authorities, empowered to issue permits, on the one hand”, that is the one who distinguishes “individual or legal persons from the other”.

Licensing system in a narrow sense, in my opinion, includes all of the above elements; however, its effect covers only a limited number of material things and things of the material world, which represent a potential danger [1; p. 13].

Licensing system is a special kind of state regulation of any sector, including the audiovisual one. It is realized in different forms that represent a specific action carried out by competent executive bodies to solve problems assigned to them in the licensing system. Most forms of the licensing system depend on the body of executive power, its competence, administrative and legal means, union or separation which can achieve this goal and implementation of which entails different legal consequences for entities of the licensing legal relations [2; p. 111]. Based on these criteria, O. V. Kharitonov provides several forms of a licensing system. In particular, state registration of business entities, licensing, patenting, certification, special permits for certain actions and others [1; p. 14].

Features of the licensing system in the field of audiovisual mass media detected the foundation institute and its legal legalization. According to Article 1 of the Law of Ukraine “About Television and Radio”, TV and radio are registered in accordance with the law about legal entities that basing on the license, published by the National Council of Ukraine on Television and Radio Broadcasting, creates or completes and / or packages broadcasting and / or transmits and distributes them through technical means of broadcasting.

Hence, a TV and radio organizations have the features unique only to themselves. In fact, it is an economic agent, its form of management as for a legal entity is limited to creation or acquisition and / or packaging broadcasting and / or transmission and distribution using their technical means of broadcasting, its activity is possible only if there is a license about broadcasting, issued only by authorized body – the National Council of Ukraine on Television and Radio Broadcasting. However, according to the Law, TV and radio organizations are not just economic entities, but also the subjects of information activities. This, in turn, the mechanism of audiovisual media expands. Conditionally, it can be divided into two phases. The first phase is the created entity, the second is the subject of information activities.

Legal facts of the entity have a sequence of occurrence: creation (the first legal fact), registration (the second legal fact), introduction to the registered data into registration of the economic agent (third legal fact) [3; p. 5].

According to paragraph 1 of Article 55 of the Commercial Code of Ukraine [4], entities are participants of economic relations, which operate by implementing economic competence (a set of economic rights and duties), have separate property and are responsible for their obligations within the property, except for cases required by the law. According to the legislator, the economic agents include:

1) economic organizations, that is legal entities established under the Civil Code of Ukraine, government, utilities and other enterprises established in accordance with this Code and other legal entities engaged in economic activity and registered in accordance with the law;

2) citizens of Ukraine, foreigners, and stateless persons, engaged in business activity and registered under the law as entrepreneurs.

According to Article 80 of the Civil Code of Ukraine [5], entity is an organization established and registered in accordance with the law. A prerequisite for entrepreneurship is the state registration. It is a part of legitimation business and has constitutive significance. As O. O. Kvasnitska indicates, on the one hand, state registration is one of the stages of creation and consolidation of legal status, on the other, it is a certain procedure related to the activities of state registration, performing preliminary state control on entry of objects into economic circulation [6; p. 9]. State registration is a form of state regulation of audiovisual mass media.

In the current legislation, except for individual entrepreneurs, there are no restrictions on establishment of audiovisual mass media in various organizational and legal forms. Thus, the broadcasting company may be established in the form of private company, collective company, company based on ownership associations, municipal company, state company, in the form of the other types and categories of business, including rental ones, creation of which does not contradict with legislative acts of Ukraine, including trust enterprise. Among the other legal forms of optimal foundation of audiovisual mass media, there is business entity, which allows to combine the resources of several individuals, that cannot be done, for example, in the form of private enterprise. On the other hand, business entity is fairly transparent in terms of the relationship between an owner and management of the company, compared, for example, with business combination [7].

Creating the economic agent is a component of economic competence of the participants of economic relations. However, in certain cases, the right to create economic agents is restricted by law. For example, state enterprises cannot be founders of enterprises of any organizational forms and types of business partnerships, cooperatives. This prohibition is laid down in Article 1 of the Decree of the Cabinet of Ministers of Ukraine “About regulation of businesses created with the participation of state-owned enterprises” [8].

At the same time, according to the current legislation, TV and radio organizations, which are state-owned enterprises, are public authorities, according to their functions and responsibilities, provided that they do not fall under the list of persons prohibited to be the founder of audiovisual mass media, which is referred to in paragraph 2 of Article 6 of the Law of Ukraine “About Television and Radio”. These include, in particular, the State Enterprise “National Television Company of Ukraine” and “National Radio Company of Ukraine”. Under the law, their heads are appointed and dismissed by the President of Ukraine on the proposal of the Parliament. Public Council defines a candidate for the position and submits to the Verkhovna Rada of Ukraine and submits a proposal on appropriate grounds for dismissal of the head. Organizations operate its activity on the basis of statutes approved by the Law of Ukraine [2; p. 112].

Another aspect of creation and activity of audiovisual  mass media is licensing of their activities. Thus, according to the Law of Ukraine “About licensing of economic activities”, activities in the field of television and radio must be licensed (item 4 of part 1 Art. 7). However, according to item 2 of part 2, Art. 2 of this Law, its activity does not apply to the order of publications, renewal and revocation of licenses for activities in the field of Radio and TV, which is carried out according to the Law of Ukraine “About Television and Radio” [9].

Under the Law of Ukraine “About Television and Radio”, there are two types of activities subjected to licensing, such as:

1) realization of broadcasting, using of broadcasting, network broadcasting, multi-channel television networks;

2) provision of program services using multi-resource networks. National Council of Ukraine on Television and Radio Broadcasting realizes licensing under the Law of Ukraine “About Television and Radio”, “About the National Council of Ukraine on Television and Radio”, and according to the plan of national television and radio space.

According to chapter 9 Art. 23 of the Law of Ukraine “About Television and Radio”, license for broadcasting issued by the National Council, is the sole and sufficient document that gives the licensee the right, under the license, to realize broadcasting, use channels of broadcasting on condition that there is electronic means provided by the law and permits in their operation. For the distribution of television and radio programs and broadcasts, multichannel television network entities must also be licensed in the National Council (chapter 2, Art. 39 of the Act).

According to the Report of the National Council in 2014, the regulatory authority received a 1,071 statement by business entities for licensing broadcasters and program service providers. At meetings, there were examined 1,026 applications of broadcasters and providers of software services.

Generally the TV and radio organizations issued and reissued 556 licenses, including 432 broadcasting licenses (including 391 re-processed), 78 satellite licenses (including 66 re-processed), 241 broadcasting time licenses (including 237 re-processed), 41 cable licenses (including 29 re-processed), 22 wired licenses (including 9 re-processed), 50 multichannel licenses (including 50 re-processed), 124 licenses by licensed provider of software services (including 3 re-processed). In addition, changes were made to 205 licenses due to re-processing applications, including 80 licenses for broadcasting, 18 satellite licenses, 50 broadcasting time licenses, 2 cable licenses, 10 multi-channel licenses, and 125 licenses of software services provider. Besides, 32 licenses for broadcasting were extended, among which, there were 2 for wired, and 6 for satellite broadcasting.

However, in 2014, a license fee for publication, continuation and re-processing of broadcasting licenses and software service provider for a total of 28 780 500 USD was paid [10].

Charges of license fee for licensing are carried out according to the Methodology for calculating the amount of the license fee for the grant or renewal of broadcasting licenses, the license provider of software services, the determining of fees for license renewal and issuance of duplicate of license broadcasting, licenses of provider of software services, approved by Cabinet Ministers of Ukraine on April 13, 2011 № 412 [11].

It should be noted that the need for licensing is related to the use of limited resources (usually radio), which is considered a public good and is distributed and controlled by the state. Features of TV and radio products distribution are objectively caused by two aspects of broadcasting, communication services for the purposes of broadcasting and distribution media as for television and radio programs [12; p. 7]. Adjusting these two activities can be carried out by one or by different bodies. For example, the US has one supervisor. The European tradition is characterized by separation of these functions.

Researchers distinguish the following basic principles of licensing:

1) the principle of priority (licenses are issued to those who first applied for their receiving);

2) the principle of ‘beauty context’ (licenses are issued to those who satisfy the established qualitative criteria);

3) the principle of lotteries (licensing determined solely by accident);

4) the principle of auction (licensing is given to those who offered the highest price);

5) the principle of combination of the above methods.

Methods 1 and 3 are based on a random distribution, and therefore are hardly used. The most common methods in the EU are methods 4 and 5. The latter is usually combined with some elements of method 2 – the conditions for admission to the auction are the quality criteria. For local radio stations, the method of option 2 is frequently used [13; p.  312].

The main groups of quality criteria for broadcasting license is financial (investment commitments), social and cultural (the needs of society in cultural, informational, children programs, etc.), vocational, share of national production, antitrust restrictions [14]. Separately, licensing procedures and mechanisms to digital broadcasting, which consists of licensing program services transmitted by multiplexing, licensing of multiplex equipment, which transmits software and other services, and licensing of additional services are distinguished [13; p. 313].

For violation of the law or license terms, differentiated sanctions are applied to the broadcasters on three levels, as for prevention, fines and other financial penalties, limited transmission, suspension, revocation or cancellation of temporary licenses [15; p.  398]. There is no common approach to the powers to impose penalties. In some countries, regulatory agencies have their own right to make their own punishment with the possible appeal of their decisions in administrative courts (Germany). The other decisions on sanctions are taken by the judiciary, and proof of infringement rests on the regulator (France).

Thus, the creation and licensing of audiovisual mass media is different. For acquiring legal scope, the latter one should be registered in accordance with legislation as legal persons in one of the legal forms. After that, under the Law of Ukraine “About Television and Radio”, the list of activities must be licensed. Only after all of these ‘licensing procedures’, audiovisual mass media can realize their rights and activities.

 

References:

  1. Kharitonov O.V. Licensing system in Ukraine: Author’s abstract. Candidate of Legal Sciences .: 12.00.07 / O. V. Kharitonov. – H., 2004. – 181 p.
  2. Voznesenska O. A. Creation of audiovisual mass media as an economic agent/ O. A. / Voznesenska/ Journal of Kyiv University of Law. – 2011. – №3. – 118 p.
  3. Markov V. I. Establishment and registration of business entities of private sector: Author’s abstract. Candidate of Legal Sciences / V. I. Markov. – D., 2004. – P. 5.
  4. Economic Code of Ukraine, Law of Ukraine on January 16, 2003 // Supreme Council of Ukraine. – 2003. – № 18. – Art. 144.
  5. Civil Code of Ukraine: Law of Ukraine on January 16, 2003 // Supreme Council of Ukraine. – 2003. – № 40. – Art. 356.
  6. Kvasnitska O. O. Legal regulation of state registration of business entities: Author’s abstract. Candidate of Lega Sciences: 12.00.04 / AA Kvasnitska. – Donetsk, 2006. – P. 9.
  7. Scientific and practical commentary of the Economic Code of Ukraine / Society. General edition. D. M. Prytyka, I.V. Bulhakov – K. Legal Council, Yustinian – 2010. – P. 501.
  8. On regulation of businesses created with the participation of state-owned enterprises: Decree of the Cabinet of Ministers of Ukraine of December 31, 1992 // Supreme Council of Ukraine. – 1993. – № 11. – Art. 94.
  9. On licensing of economic activities: Law of Ukraine on March 2, 2015 // Supreme Council of Ukraine. – 2015. – № 23. – Art. 158.
  10. Report of the National Council of Ukraine on Television and Radio Broadcasting 2014. Available at: <http://wl.cl.rada.gov.ua/pls/zweb2/ webproc4_l? Pf3511 = 54,345>.
  11. On approval method of calculating the size of the license fee for the grant or renewal of broadcasting licenses, the license provider of software services, the definition of fees for license renewal and issuance of duplicate of license, licenses software service provider: Cabinet of Ministers of Ukraine on April 13, 2011 , the number 412 // official Gazette Ukraine. – 2011. – № 28. – Art. 1196.
  12. Artyshchev A. The right to the free flow of information through radio broadcasting: consolidation in the national legislation of some states and organizational support for implementation / Artishchev A. // Legislation and practice of mass media. – 2004. – № 4. – P. 7.
  13. Leonard D. Broadcasting licensing Prospects in Russia: legal aspect / D. Leonard. – Moscow: Institute of Information Law, 2004. – P. 312.
  14. On measures to ensure transparency of mass media. Recommendation RE of November 22, 1994 № R (94) 13. Available at: <http://zakon.rada.gov.ua/cgi-bin/laws/ main.cgi>.
  15. Legal questions of licensing of broadcasting / ed. G.V. Vynokurov, A. Richter, Vladimir Chernyshov. – M .: Center @Law and Mass Media@, 2000. – P. 398.
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