Summary of the Case of Klub Radio

The tendering practices of the Media Council lend powerful support to the two salient principles of the Fidesz Party’s media policy: that the masses should not be able to access information on public affairs unless it is funneled from controlled sources (note that the readers of the political dailies and even online public-affairs consumers do not amount to “masses”); and that they should do it in a way that ensures the economic stability of the right-wing media. A prime example of the former is the buyout of Metropol, the free nationwide daily; the flagship of the latter is the media investment venture Infocenter, which numbers Class FM, Lánchíd Radio, and the weekly Heti Válasz in its portfolio. Part of this strategy is to thwart or at least undermine media affiliated with the political left, most notably Klubradio. This was the ultimate motivation — specifically with the aim of weakening the daily Népszabadság — behind the prevention of the Axel-Springer/Ringier merger at all costs, even if it took retroactively applied legislation and unconscionable professional reasoning.

No symptom of these intentions is more spectacular than the legal disputes between the Media Council and Klubradio about the future of the latter. As a major opinion-former representing the voice of the left-wing opposition, the Budapest-based Klubradio is a crucial actor in the pluralistic media system. Over the years — using the then still available political support, I hasten to add — it acquired frequencies in towns and cities around the country, and built up a major radio network.

The future of Klubradio may well hinge on the outcome of two court reviews. The first has to do with the tender announced for the 92.9 MHz frequency in Budapest. Although Klubradio won the tender in April 2010, the Media Council that had formed in the meantime refused to sign a contract with the station. The other process reviews the results of the tender for the 95.3 MHz frequency, in which Klubradio finished as a close second bidder. In both litigations, the court ruled — in the first instance in the first case, and in a final and non-appealable judgment in the second case — that the Media Council had violated the law. It clearly follows from these judgments that Klubradio actually won both tenders.

In the case of the 92.9 MHz frequency, the Media Council sought to justify its refusal to sign a contract with the station by saying that Klubradio had not been eligible to file a bid in the first place, because it was airing broadcasts at the time using another frequency in Budapest. However, the station had made the commitment, obeying the requirement set forth in the tender announcement, to resign that other frequency if it won. It is true that certain lawsuits over other radio tenders pending at the time did feature similar rationalizations about initial eligibility, but these arguments had disappeared by the time those cases reached final judgment. Furthermore, even if there had been a flaw in Klubradio’s bid, it would not have affected the winning bid unless another bidder contested the final result in court. Consequently, entering into contract with the winning bidder — with Klubradio, in the case of the 92.9 MHz frequency — is not an option but an obligation and a liability, and at once the only way to uphold the option of the losers to seek legal redress in their turn.

Ultimately, the court not only declared that the Media Council had acted against the law by refusing to sign the contract, but in effect produced that contract itself by virtue of this very judgment.  The Media Council nevertheless filed an appeal against this first-instance decision.

In the case of the 95.3 MHz frequency, Klubradio appealed the Media Council’s resolution after it had lost to an competitor by a few points. In some of its part, the result of the tender is bound to objective criteria, in the evaluation of which the Media Council has no discretion to deliberate, and the number of points can be calculated beyond any dispute. The other part of the total awarded score, however, comes from the quality assessment of the proposed program schedule, where the authority can easily tailor points to suit its preferences, and ultimately to the end result it would prefer to see. The suspicion that this is indeed what happened is substantiated by the fact that, in the course of the lawsuit, the Media Council modified its own explanation originally attached to the resolution in respect of these very subjective criteria.

Finally, the court annulled the result of the tender citing formal errors, noting that the winning bid was not affixed by properly authorized signatures. The court then ordered the Media Council to reevaluate the submitted bids. Since the original evaluation had relegated Klubradio to the second place, the outcome of this reevaluation could hardly be other than declaring Klubradio as the winner. The Media Council, however, has not passed a new resolution in the matter ever since.

The Media Council is putting Klubradio in a tight place even by simply protracting this uncertain legal situation.  By filing an appeal in connection with the 92.9 MHz frequency, it has managed to postpone the closure to this case indefinitely. And it is this frequency that could mean the optimal solution for Klubradio, as a frequency where it could operate as a community station and would thus be exempt from the media service fee — as are the right-affiliated Lánchíd Radio, Mária Radio, and Europa Radio stations. Moreover, it could retain its true and tried program structure. Using the 95.3 MHz band, it would have to follow a program structure completely overhauled by the Media Council, while struggling to earn the funds to pay for the media service fee amidst a rather bleak advertising market.

Should the Media Council issue its resolution concerning the 95.3 MHz frequency sooner than the court reach a decision on the 92.9, and Klubradio is declared as the winner of the 95.3, then a new dispute will arise as to whether the station is liable to commence exercising its entitlement before the ongoing other case concludes with a final and non-appealable judgment. The tender announcement requires the winning bidder to commence broadcasting programs in 120 days after signing the contract with the Media Council. This of course does not automatically void the other lawsuit, and if the court rules in favor of Klubradio, the station can still resign the use of the 95.3 MHz frequency. The appeal process, however, may indefinitely prolong a situation in which Klubradio finds itself unable to plan for anything, including programs and revenues. All of this, if nothing else, is perfectly sufficient to further enfeeble the station’s position in the market.