How to Obtain a Broadcasting License: Legislative Gaps as Motivators for Corruption Schemes

Issue that is not discussed
In recent years, competitions for obtaining radio frequencies are presented as examples of transparency and equal opportunities. However, the existing legal framework actually creates perfect conditions for manipulation. Specifically, the shortcomings in the law allow companies without experience, history, and necessary resources to obtain broadcasting licenses. It is noteworthy that following the latest legislative changes, 4 companies have received broadcasting licenses in Yerevan just weeks after being established and authorized prior to the competition held by the Public Radio and Television of Armenia (HHR). One of these companies sold both the company and the broadcasting license a year after winning the competition. We will address this issue in our forthcoming publications.

Let’s return to the gaps in the authorization procedure.

Authorization: A protection that does not function
According to the law, "The audiovisual media service provider (hereinafter referred to as the Broadcaster, audio media service provider – Audio Program Broadcaster) is an entity established in the Republic of Armenia or an individual or legal entity authorized by the regulatory state body, which composes and presents audiovisual information to consumers and is responsible for the content of the audiovisual product.” Thus, the system should prevent the entry of one-day companies and hidden beneficiaries into the market and reduce corruption risks. In reality, however, we have a completely different picture.

How the corruption mechanism works
The scheme is simple and, at first glance, legal:
1. A company is established on the eve of the competition, receiving official registration just a few weeks before the contest.
2. Formal authorization
The regulatory body recognizes the company as a “media service provider” in documents. It is apparent that the company, established weeks ago, is physically incapable of providing media services. Meanwhile, the law clearly states that the company must be authorized and provide media services to consumers.
3. Application with unfulfilled obligations
The application for the competition includes extensive programs—daily news, authorial thematic programs, technical capabilities, financial provisions. However, the newly established company has neither a team, nor equipment, nor a budget.
4. Winning the competition
The license is granted to the newly created company as formal requirements are met. The law does not provide for a real verification of the feasibility of the project. Yet somehow, the law gives the commission 60 days to announce the winner of the competition. Here the question arises, what is the purpose of this time, if nothing is verified? We will also touch upon this issue in our next publications.
5. Entry of real beneficiaries
After obtaining the license, the “shell” company becomes an ideal tool for hidden beneficiaries.

Why is this phenomenon dangerous?
Fictitious players are replaced by real ones. In essence, genuinely operating and investing companies lose in competitions to the corruption scheme. Moreover, licenses become trade instruments, and the license turns into a product rather than a tool for developing the media market. The functioning of the regulatory body becomes meaningless. The authorization ceases to be a protective mechanism and turns into a formal procedure that simply opens the door for corruption. As a result, the audience suffers.
The public receives an empty air without hosts, music without content, and devoid of public value instead of promised educational and cultural programs, and news.

What is needed to rectify the situation?
The law requires radical reforms. To eliminate corruption, it is necessary to:
1. Establish real entry criteria for broadcasting.
The company should have a minimum media experience of at least 2 years. Justified financial reports for the last 2 years. Proof of actual availability of equipment, team, and content.
2. Create a two-phase system for issuing licenses
First phase: verification of the history and resources of the company. Second phase: assessment of programming and technical obligations.
3. Prohibition on owner changes for at least 5 years after obtaining the license.
4. Public oversight. All competition applications and the commission's decisions should be accessible to the public. Not only should programs be published, but also the financial and personnel data of the participants.

The main question for lawmakers
Today, the competitive system for existing licenses operates against the purposes of the law. Licenses are transformed into tools of influence and financial flows, rather than means for the development of the media sector. If legislators do not take radical steps, the competitions will continue to serve not the public, but behind-the-scenes arrangements.

Conclusion
Radio frequencies are a national resource. They belong to the public, not to influential groups. For this resource to serve the interests of society, it is necessary to amend the law, introduce real filters, and genuinely make the licensing process transparent.