INSTITUTE FOR REPORTERS’ FREEDOM AND SAFETY ANALYSIS & STATEMENT: AZTV’S TRIUMPH IN TENDER IS UNACCEPTABLE; AZTV MUST BE SHUTDOWN, NOT EXPANDED

July 28th, 2008
28 July 2008
Baku, Azerbaijan

On 18 July, the National TV and Radio Council (NTRC) declared Azerbaijan TV and Radio Programming, the “state broadcaster” that is often referred to simply as AZTV, the winner in a tender for a sports channel.

The Institute for Reporters’ Freedom and Safety condemns this decision of the NTRC, and believes that it contradicts local legislation and is a violation of the country’s commitments to the international community. Instead of seeking to eliminate AZTV, which the Azerbaijan’s government has been obligated to do since its accession to the Council of Europe in 2001, the government is actually expanding the company.
The tender started on 21 April and there were three bidders: "Azerbaijan TV and Radio Programming" Closed Shareholder Society (AZTV sport), "Lider" TV ("Olimp" TV) and "Rebranding" MMC (Sport Kanal Klub- SKC).
In an interview on 10 June 2008, National Radio and TV Council Chairman Nushiravan Maharramli told IRFS he believes that it is perfectly legal for Azerbaijan TV and Radio Broadcasting Company to participate in the tender. He said, “‘Azerbaijan TV and Radio Broadcasting’ has been a Closed Shareholder Company for two years already. There's no problem with AZTV’s purchase of the sport's channel.” Maharramli also emphasized that the stocks of AZTV will be offered for sale.
IRFS notes however, that Maharramli’s comment is contradicted by other remarks he made last June. In June 2007 the NTRC shutdown the regional TV channel “Lankaran TV” because it was owned by members of region’s local executive administration. At that time, Maharramli characterized this as unacceptable and even gave an interview about this to Ekho Newspaper. The newspaper asked Maharramli, “You said that in Azerbaijan the government cannot be the owner of a TV channel. Despite this, nationwide AZTV remains under the patronage of the government.” In response to this, Maharramli stated, “Here the situation is a little different. As it is known, from a legal perspective, AZTV is already not a state channel, but has received the status of a stock company.” Then the newspaper stated, “Despite this, AZTV's stock belongs to the government?” In response to this, Maharramli stated, “Yes this is still true. Starting this year, and maybe in future years, 49 percent of the stock could be put up for sale.”
IRFS notes that although AZTV has been a Closed Shareholder Company for two years, all of the stock is still owned by the government and there is no indication that that will change anytime soon.
Further evidence that AZTV is nothing more than a state broadcaster is the fact the chairman and even deputy chairman of the closed shareholder company are appointed through presidential decrees. AZTV’s incumbent chairman Arif Alishanov and his deputy Vagif Agayev were appointed through a 16 August 2006 presidential decree.
The status of AZTV has been a contentious issue for quite some time. According to the Council of Europe, one of Azerbaijan’s obligations is to eliminate AZTV. In 2004, as plans were underway to create Public TV in place of AZTV-2, which ceased operations after the 2003 presidential elections, the expectations of the international community was actually that both AZTV-1 and AZTV-2 be turned into public channels. At that time, the Council of Europe released a statement in which it stated, “The Council of Europe remains concerned as to whether the transformation of Azeri State Television (AzTV) will involve both Channel 1 and Channel 2. Meeting [Azerbaijan’s] commitments in full requires that this process applies to both channels. ” Unfortunately, to this day, this commitment still remains unfulfilled. With the decision to allow AZTV to open a sport channel, Azerbaijan has literally taken a gargantuan step backwards, again finding itself in situation with two state TV channels.
Financially, both AZTV and Public TV are funded through the State Budget, but while Public TV is obligated to use the public funding to create programming that reflects the broad spectrum of views of the Azerbaijani public, AZTV has no obligation of this sort. In reality, AZTV is used as a tool of political manipulation. Countless monitoring projects have confirmed that AZTV covers almost exclusively the ruling party and incumbent government. According to a monitoring project being carried out right now with funding from the Council of Europe and the European Commission, 86 percent of AZTV’s airtime is used for coverage of the president and ruling party. In addition, according to new amendments to Azerbaijan’s Election Code, AZTV will no longer give free airtime to political candidates. PACE co-rapportuer for Azerbaijan Andres Herkel interpreted this amendment saying “This is to say that only official information will be reported, but presidential candidates will not be given airtime, which means that if the incumbent president runs he will be on State TV daily, but there will be no opportunity for the other candidates to appear."
Financially, there is a huge disparity between the funding that AZTV receives from government, in comparison with that of Public TV. In 2008 AZTV received 22 mln. AZN while Public TV received only 10 mln., in 2007 AZTV was given 21.7 mln. and Public TV 7.5 mln., and in 2006, when Public TV was just starting up it activities, AZTV received  14.1 mln., while Public TV was given only 11 mln.  The huge amount of public funding that AZTV receives alone creates a totally inequitable situation with regards to any tender, and also violates the principles of capitalism and free market competition.
According to Article 15 of Azerbaijan’s law on TV and Radio Broadcasting, the factors considered during that tender are 1) Conformity of bidder's indications to terms of competition; 2) Creativity and technical opportunities of bidder to implement TV and Radio broadcasting; and 3) Results of open hearings and other competition procedures.  The millions of dollars in public funds that AZTV receives put it at a serious advantage in any tender, particularly with regards to “technical opportunities.” It is also hard to imagine that the National TV and Radio Council, a state organ, can make an objective decision in a tender where it has to choose between the “state broadcaster” and other competitors.
It is also important to note the negative effect that AZTV has on the advertising market for the broadcast media. While many public channels in other countries subsist only off of public funds, AZTV receives public funds and acquires profit through advertising. However, because the country’s economy is largely monopolized by people close to the government, AZTV is also thought to bring in more profits that any other station – public or private – in the country. Placing advertisements on AZTV is a sign of a political loyalty.
In light of what is written above, IRFS calls on Azerbaijan’s government, and particularly the NTRC, to annul the results of tender and conduct a new tender. In addition, IRFS demands that instead of the partial and non-transparent privatization of AZTV (over the past 10 years the process of privatization in Azerbaijan has lead to the under-priced sale of enterprises by the government to business institutions that closely linked to the government), a second public TV station be created on the frequency and technical base of AZTV.
IRFS requests that the local and international communities make similar appeals to the government and NTRC, and also asks them to consider the use of sanctions in this situation which demonstrates that Azerbaijan is not just failing to fulfill commitments, but actually digressing in areas where progress had been made.