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Brasília | Oligopolies Under Observation in 2013

m mineiro

Oligopolies in the Media Market

Source: Folha de S. Paulo | Brasilianas.Org.
By: Vladimir Safatle
Translation: C. Brayton

In recent weeks, Argentina made fresh headlines in Brazil with stories on clashes over the enforcement of Argentina’s so-called “Media Law,” which defines a new regulatory order for companies in the news and entertainment sectors.

Some of these new provisions, and especially those related to combating monopolies, have been viewed as signs of a vengeful State intent on limiting freedom of expression, as in the case of the archrivalry between President Kirchner and the Clarín group.

Leaving aside these heated public conflicts, however, the Argentines are engaged in an important debate that deserves to be treated more dispassionately. It seeks an answer to the question: “Do we or do we not need laws that restrict the concentration of ownership in the media sector?” That is to say, can we successfully argue that concentrated media ownership does not necessarily affect democratic practices?

At this juncture, it is worthwhile remembering that the global media market is currently among the most oligopolized in the world.

What is more, as we gather from  reading between the lines of the recent case involving Rupert Murdoch, this state of affairs really does affect our political life.

Murdoch built an empire of TV stations, newspapers, magazines, radio stations, book publishers, movie theater chains, and Internet portals that gave him the ability to mold debate, pressure governments and interfere in politics to the extent that it promised the American general  David Petraeus its unlimited support should he choose to run for U.S. president.

Situations like this are not exclusive to the Anglo-Saxon world, however. Recent decades have witnessed a brutal, highly negative trend toward consolidation of the sector that affects not only our politics but also our culture.

A single group like Time Warner, for example, exercises simultaneous control over production, distribution and development of new techniques. In this case, we are justified in saying that laws barring the formation of oligopolies is a way for society to defend itself against the coerced uniformity of opinion and the silencing of alternative voices.

Opponents of this viewpoint might reply that a more fragmented market would leave media companies more vulnerable to government pressure. This argument is not without merit.

The solution to this aspect of the problem, however, is not the perpetuation of the other aspect. Strategies are needed in order to prevent governments from framing the news according to their own interests.

In Brazil, this would imply limiting government influence by drastically cutting spending on government advertising — which should be confined to public service announcements — and enforcing laws such as the ban on politicians owning media outlets. Clear and absolutely fair criteria for the use of publicity budgets by state-owned firms should be developed.

São Paulo’s state-owned and publicly traded Sabesp might make an interesting case in point. It frequently walks the corda bamba between public service announcements and government propaganda, as is “this is your current government at work for you.”

But this could be an artifact of my own subjective impression as a couch potato. This might make a good little feature article to research.


Where are all the Sabesp TV spots stored? What PR techniques do they apply? Do they amount to the use of public money to promote a specific administration?

Anyway, I have always thought that the «monthly payola» cases should be combined and subjected to a parliamentary commission of inquiry — CPI — of the PR industry at the heart of these and other scandals.

After all, the exact same mechanism was used in several of these cases: Publicity services were contracted by a state or municipal government for a given cultural or sporting event — Rock in Rio, an Enduro motorcycle event in Minas Gerais — and then publicity fees were accounted for as having been paid to fictional or purpose-built Potemkin village PR outsourcers.

In fact, however, most of these PR funds were skimmed off for use by political and private parties. Enter the hidden camera video of political operators stuffing their socks and jocks with bundles of cash and you have yourself a classic Brazilian “mountain of money” scandal.

In any event, big PR has a demonstrated capacity for financial legerdemain — think of Duda Mendonça as well as Marcos Valério. Perhaps the second most common source of laundered campaign money: state-owned companies like Furnas in Minas Gerais.

The Vanguard of the Obsolete

Gilberto Maringoni e Verena Glass of the IPEA provide a detailed historical narrative of media law development in Latin America, explaining why regulation produced in the 1930s-1960s no longer applies.

Another factor that could not have been anticipated was the invention of digital technology and the deterritorialization of media companies through the use of virtual networks.

Before the digital revolution (1980- 90) news organizations had to be located in the country where they operated. This was not merely an arbitrary legal requirement, based on nationalist developmentalism. At this time, the entire network of businesses, and especially in the advertising sector and media finance, was anchored in calmer waters.

Now, however, an ISP, Web portal or cable TV provider can transmit content from any part of the world, without having to use antennae or sophisticated broadcast equipment.

The main problem is that the ISPs and cable operators are not classifiable as content and information producers as defined by the current, outmoded legislation.

The privatization of Latin American telecoms in the 1980s-90s, opened up a veritable  Pandora’s box. State-owned telephone monopolies were auctioned off. It may be that the authorities who sponsored this policy were blind to the about-face that would make possible a state of borderless media convergence.

Telephone operators, for example, which during the 1990s were limited to long distance voice communication, underwent a consolidation that two decades later would turn them into the biggest Internet providers in Brazil and arm them with the same political firepower as any traditional TV network.

As things stand, TV, radio, telephone, film, literature, music, data transmission, navigation data and many other services can be tapped using nothing more than a single smartphone.  Each of these functions, however, must still comply with rules specific to its sector.

ISPs use technology to produce and distribute content. To the extent that they are not subject to the old legal norms, their content can be produced anywhere in the world and transmitted to any other, with adjustments made for local characteristics [such as  language].

At the same time, now that global media maintains offices in many different countries, a complex series of loopholes in current local laws has been used to legitimate the local operation.

From the same symposium,, Denis de Moraes:

Brazil is in the  vanguard of obsolescence [sic] in terms of its regulation of the media. Its radio and TV regulator remains one of the most outmoded in Latin America. To date, the congress has made no progress toward regulating Articles 220 and 221 of the 1988 Constitution, which respectively ban monopolies in the mass media and gives preferential treatment to TV and radio stations “serving education, artistic, cultural and informative ends,” as well as “the promotion of national and regional culture and a plan of stimuli to independent productions who qualify. .The lack of action by successive governments in this area is just plain alarming.

Media a Priority for 2013

The president of the ruling PT has said that political reform and media regulation are the top priorities of this year’s Congress. The quote is from November of last year.

Rui Falcão said his party has at least two goals for 2013: A new regulatory framework for the media and political reform.

The party will begin to execute its strategy — calling on the federal president to issue a bill that regulates the media —  the party will include the issue in its agenda for the meeting of the national leadership.

Last week, Falcão told the international press that he hopes the presidency will send down a bill regulating communications in Brazil. “It is not our party that wants to pass enabling legislation for these provisions of the Constitution, it is the congress as a whole. We hope that our government will send down a bill establishing a regulatory framework that will increase freedom of expression and eliminate any possibility of censorship of the established media, regulating provisions in the Constitution that have yet to get off the drawing board.”