Television and radio remain today two of the most important and influential media channels. In this article we will take a look at how to open a television or radio channel in Brazil
In Brazil no television or radio broadcaster actually own the frequency that is used to broadcast the channel. All the free-to-air channels actually belong to the Brazilian government, which temporarily grants the frequency to broadcasters via a bidding process.
Foreigners are not allowed to own 100% of a broadcasting company - the limit for foreign participation in this sector is just 30%. The broadcasting company must not own more than 10 channels throughout the country, with a maximum of five Very High Frequency channels. Also, a broadcasting company may not own more than two channels in the same state.
A commission formed by the Ministry of Communications analyzes all the projects received during the bidding process. The members of the commission then analyze the technical and financial conditions of the different projects, awarding points on each item that is judged. At the end of this process, the broadcaster that has the highest point average is awarded the concession of the frequency, earning the rights to exploit it for a pre-defined period. If at the end of this pre-defined period the broadcaster still wants to continue exploiting the conceded frequency, the Ministry of Communications will need to analyze the broadcaster’s project again.
If the Government discovers that the broadcaster is using the television channel for different means than for what it was conceded - not promoting national and regional culture, journalism, amongst other things - the Ministry of Communications may opt to refuse renewal of the concession agreement of that certain frequency. It is worth mentioning that the Ministry of Communications may not immediately terminate the concession agreement.
The maximum period awarded to a company to operate on a frequency is 15 years for a television channel and 10 years for a radio channel, with the possibility of renewal of the concession agreement. At the end of the new period the Ministry of Communications will open a new bidding for the channel.
There are no legal provisions regarding digital radios. The process for obtaining the concession of a community radio channel is the same as the concession for a commercial radio channel.
Obtaining the concession
The application process for granting or renewing a frequency concession follow these steps:
- Participation in organized bidding by the Ministry of Communications
- Obtaining the concession
- Payment of the security deposit
- Approval of the bidding commission at the location where the broadcasting company will establish itself
- Payment of all bidding costs
- National Congress approval
- Federal Senate approval
- The President of the National Congress signs a legislative decree, officially granting the concession of the frequency to the broadcaster
- The decree is then forwarded to the president if the concession is for a television channel or to the Minister of Communications for a radio channel
It is up to the Ministry of Communications to open an invitation to tender in which it will determines that bidding will take place regarding a specific frequency in a city. The task of supervising all television and radio channels is the responsibility of ANATEL, which is the National Agency of Telecommunications.
It is important to mention that the Ministry of Communications will determine the amount of the security deposit required in the bidding process and of the invitation to tender. Since 2012, some changes were made in the legislation and now the security deposit must be paid in full and may represent up to 10% of the total amount of the final bid.
Necessary requirements for applying
The broadcaster interested in obtaining the concession is required to prove that it is capable of performing - both technically and financially in the broadcasting activity they are applying for. To prove this, the broadcasters participating in the bidding are required to submit reports made by two independent auditors demonstrating the economic capability of their company, as well as the project investment indicating the origin of the funds that will be invested. They will need to present their balance sheet and financial statements, as well as documents to prove good standing of the company and its partners.
Necessary requirements for renewal
In order to renew the concession agreement the broadcasters must obey several legal and constitutional requirements during the period in which the concession was granted such as:
- Granting privilege to education and information as well as national and regional culture in its programming
- Not forming monopolies or oligopolies
- Other financial and fiscal obligations
Criteria for granting
After reforms were made in the law for granting a frequency in 2012, the more relevant criteria for determining the outcome of the bidding process is related to the contents that are going to be broadcast. By doing this, journalism and cultural programs will have more space on the channel’s programming. The broadcasting of programs produced in the same city to which the concession agreement was granted is also encouraged.
Payment of the security deposit made by the broadcaster who won the bidding process is also a criteria for granting the channel: if the winner of the bidding does not pay the security deposit, the concession of the channel is awarded to the second best project. If the concession is not approved by the National Congress the security deposit is refunded to the broadcaster.