- Title: ARGENTINA: Argentina's Congress passes controversial legal regulation
- Date: 15th November 2012
- Summary: BUENOS AIRES, ARGENTINA (FILE) (REUTERS) VARIOUS OF GRUPO CLARIN OFFICES TV ANTENNAS VARIOUS OF TV CHANNEL AND EMPLOYEES WORKING
- Embargoed: 30th November 2012 12:00
- Location: Argentina
- Country: Argentina
- Topics: Domestic Politics
- Reuters ID: LVA64SR3D4FA6DUO351GLT4A2M6A
- Story Text: Argentina's Congress passes a controversial legal regulation as Martin Sabbatella, Head of the Federal Audiovisual Communication Services Authority (AFSCA) details the government plans to auction dozens of operating licenses to comply with an anti-monopoly law, that critics believe targets Grupo Clarin.
Argentina's Congress approved on Wednesday (November 14) a new legal regulation that critics say President Cristina Fernandez could use to force a conclusion in her long-running battle with the country's biggest media group.
The regulation, which applies to the use of a legal mechanism called a per saltum, would let the Supreme Court intervene to decide cases of "institutional seriousness" even when they are being handled by lower tribunals.
Opposition lawmakers say the mechanism could be used by Fernandez's government to force the country's top court to rule in a high-profile legal case brought by the Grupo Clarin conglomerate over a broadcasting reform law.
Three years since Fernandez hailed the law as the start of a new era of media diversity, Clarin has refused to start selling off radio, television and internet licenses and she has given the company until Dec. 7 to comply or have them auctioned by the state instead.
Clarin has vowed to resist and says it was protected by court injunctions for as long as there was no definitive ruling on the constitutionality of the law.
Under the per saltum regulatory clause passed by 135-95 by the government-controlled Congress, the government can bypass federal appeals courts and take its case directly to the Supreme Court.
If the government asked the court to decide on the Clarin case, and it accepted jurisdiction, the media conglomerate could have less time to comply with the broadcast law's stipulation that it sell off "excess" licenses, lawyers say.
As of now, the Argentine government said it was preparing to auction off assets of the Argentine media groups that failed to dismantle their broadcasting empires to comply with the anti-monopoly law before the Dec. 7 deadline. So far, Grupo Clarin, has refused to dismantle its empire.
After Dec 7, operating licenses not sold off may be auctioned by the state instead.
Martin Sabbatella, the head of the Federal Audiovisual Communication Services Authority (AFSCA), the watchdog in charge of enforcing the legislation, said the broadcasters will have until December 7 to decide how they wish to dismantle their companies.
"Until December 7, the adaptation plan will be determined by the owner. They can say 'I want to transfer this, I want to solve this problem by transferring that' because the law allows the transfer or sale on this one occasion. They can say 'we are going to divide the group, we are going to separate the group, we are going to dissociate economically and form different companies.' Of course they need to be different companies, separate productive units, with different management and completely separate economically. They are different companies, they can do that, divide," he explained.
Sabbatella added the state will organise the auctions and a tribunal will set the sale price.
"After all deadlines pass, the AFSCA has to auction (operating licenses), that means the state will be acting in accordance with the law. The objective is to implement the media law, preserve the service and preserve jobs," he said.
Sabbatella explained the process the state plans to follow.
"The selection criteria we'll follow will be to auction what is of less value, leaving what is of most value to the owner of these licenses to cause the least economic damage possible. Because we would be doing this because he didn't comply with the law and could've done so. If we are in this situation, and hopefully we don't reach it, but if it happens that's because the owner did not meet with the time constraints set by law and then that's what the state has to do," he added.
Fernandez used to have harmonious ties with Grupo Clarin and its chief executive, Hector Magnetto. All that changed in 2008 when Clarin's news outlets turned against her government over its handling of tax protests by farmers.
Since then, Magnetto has become one of Fernandez's favourite punching bags. Military police raided the offices of Clarin's Cablevision cable TV company late last year and "Clarin Lies" has become a slogan among her supporters.
The dispute has battered Clarin shares, which are down more than 40 percent in the last year, and rattled investors critical of Fernandez's increasingly heavy-handed policies in Latin America's third-largest economy.
Clarin has challenged the law's most controversial clause, Article 161, on the grounds that it violates the constitution by forcing companies to sell off previously acquired radio, television or cable TV operating licenses.
The courts have yet to rule in the case, but the government says a Supreme Court decision in May means a temporary court injunction shielding Clarin from complying with the reform law will expire for good on Dec. 7.
Opposition lawmaker, Graciela Camano believes the pre-saltum law unfairly targets Clarin and is working on an alternate plan.
"We have to collect all the arguments so that there is an exception (re monopoly law) and ensure this is not a situation that would only favour the current government. In this case, the governing party has said it in the Senate and in the lower house that the pre-saltum is a term thought up by them (the government) to jump over any argument in the Clarin case," she said.
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