As you like it – Frequency tenders in 2014

Published in Hungarian on 5th June 2015
Author: Krisztina Nagy

As a result of the great wave of frequency tenders conducted in the previous years, the Hungarian radio map had changed substantially by 2014. As the process decelerated, the past year saw significantly fewer tenders. Since immensely complex and unrealistic formal requirements often made it difficult to successfully conclude a tender, in many cases it became necessary to launch new tender proceedings. Mérték has completed its analysis of the 2014 frequency tenders. A summary by Krisztina Nagy. 

Mérték Media Monitor has been analysing the media authority’s frequency tenders since 2011. The present analysis primarily sought to ascertain in how far the selection of contents resulting from the current distribution of frequencies serves the objectives of media pluralism and the public’s access to diverse information, and to what extent tender practices comply with the requirement of good management of the state’s frequency resources. Moreover, we also analyse the amendments of the authority’s contracts involving the use of radio frequencies, and the impact these have on the structure of the market. Our analysis only investigates processes in the radio market, since as a result of the digital switchover tenders for terrestrial television frequencies have ceased. 

The arguments previously raised against the authority’s tender practices continue to apply. Lacking transparency in the authority’s operations constitutes a continuously growing impediment to proper operating conditions in the radio market and the assessment of the lawfulness of the authority’s work. The authority’s arbitrary operations are not characterised by an attitude aimed at fostering a diverse offering of media, boosting market mechanisms or stimulating real competition in the media market. Rather than creating an increasingly diverse media market, the media authority is drawing a radio map that is politically selective and increasingly insulated from market operations and market competition. 

There were considerably fewer 22 frequency tenders in 2014 than in previous years, and only two proceedings had been successfully concluded by the end of the year. 

In one of the abovementioned two, the previous licence holder won the frequency again (Dunaújváros 102.9Mhz, Pentafon Kft.), while in the other case the winner was not the previous station, but another radio that is already a major station in the broadcasting range, and is in the process of expanding its operations (Tiszaújváros 89.6Mhz, Mátra Centrum Kft.).

Several judicial rulings in the past years have held that the tender notices contained contradictory elements, and sometimes the stipulated requirements were inconsistent. Nevertheless, not only did tenders fail to become less complicated, in fact tender notices were augmented by further formal requirements. Though theoretically the function of formal requirements is to ensure that submissions can be evaluated based on identical criteria – thereby ensuring equal opportunities for all applicants – the excessively complex and vague tender requirements have the opposite effect, they fail to provide a consistent and reliable framework for evaluating applications. 

For example, a new criterion that is now included in tender notices is the absurd requirement to cross out empty reverse pages, which was obviously adopted as a reaction to the notorious case involving an application by the well-known opposition station Klubrádió. In 2012, the media authority had rejected Klubrádio’s application based on spurious grounds, arguing that the applicant had failed to sign the empty reverse pages in its application. 

In response, the authority adopted new formal requirements specifically for “handling” empty reverse pages. According to the tender notices, applications had to be submitted on paper and electronically. In the paper copy, the empty (reverse) sides of each page had to be crossed out, and then submitted without page numbers or signatures. The tender notices stipulated that all the pages of the paper-based copy had to be submitted in a scanned electronic version as well, and part of the requirement was that all the identical, individually unidentifiable and crossed out empty reverse pages had to be separately scanned as well. In the case of a 500-page application, this implied that the applicant had to scan 500 crossed out empty pages. Moreover, this absurd requirement was nowhere near unequivocal, it only emerged from a joint interpretation of several clauses in the tender notices. 

Tilos Rádió submitted its application for the 90.2Mhz frequency it was already using in July 2014. Citing formal mistakes, the Media Council refused to register the application in October. As the reason for the rejection, the authority cited the absence of crossed out empty reverse pages in the electronic version of the application, as well as the failure to deposit the first three months of operating costs. The radio station asked the courts to review the decision, and in response the authority accepting the plaintiff’s reasoning in the judicial action withdrew its decision before the court’s ruling. Hence, Tilos Rádió’s application was still in play. Though the law stipulates that applications must be evaluated within four-five months, as of the conclusion of the present analysis there was no decision in this proceeding. 

The number of applications rejected on formal grounds was exceedingly high in 2014. There were only four proceedings out of 22 in which none of the applications was rejected for failure to comply with formal requirements. This may have played a role in the fact that at the end of the year the Media Council simplified and relaxed requirements to some extent, though this did not have an impact on the 2014 period.

Last year many applicants asked courts to review the Media Council’s tender decisions. The authority’s website has no direct and current information about the initiation of judicial proceedings or about their outcomes. Based on data that are publicly available, nine judicial proceedings were launched at the turn of 2014-2015, and in the overwhelming majority of these cases the applicants complained about a rejection of their applications on formal grounds. As of this writing, we do not have proper information to assess the merits of these cases. What we can state nevertheless is that the very existence of these judicial proceedings points to irregularities resulting from the overly formalised and complex nature of tender notices. These notices were obviously not intended to serve the objective of administering fast and consistent tenders. Instead, they created a framework where the emphasis was not on substance but on compliance with the intricate scheme laid out in the tender notice. 

The full text of the analysis is available here (in Hungarian).