New law looks to revive TV industry
By Antariksawan Jusuf
JAKARTA (JP): Hope is running high for a new much-awaited law on the mass media to nurse back to health the Indonesian television industry, which has been laid low by the economic crisis.
The government has finalized a draft bill, incorporating laws on press, film and broadcast media, a copy of which was made available to The Jakarta Post.
As far as the television industry is concerned, there are two fundamental changes in the bill, namely the permitting of foreign ownership of media and the airing of commercials on state-run TVRI network.
The bill, issued by the Ministry of Information, is currently in the hands of the state secretary. It will then be brought before the House of Representatives (DPR) for deliberation before its final draft is signed by the President.
The information ministry, however, has also issued similar versions of separate bills on the press, on the broadcast media and on film.
"There have been calls by a group of people related to these fields to have separate laws," information ministry's Chief of Legal Affairs Risdaini said without elaborating which group opposed an all-encompassing bill.
"So, we have prepared two versions to speed up the work. Just in case the State Secretariat or the DPR ask for separate bills, we will hand them over right away," Risdaini said.
The Indonesian Press Society has also drafted a press bill, which provides more press freedom. The bill was submitted to the House of Representatives recently. It is the House members who will finally decide which articles of which versions are to be included in the final draft.
Normally, it takes two to three years for a draft bill to be passed into law. But in some cases, such as the deliberation of the political bills, it could take only a few months.
A prolonged debate over draft laws usually occurs in the legislature, and the State Secretariat is also often blamed for holding onto bills too long. With many draft laws and regulations waiting to be reviewed, the State Secretariat ranks each in order of their urgency.
Given the current political situation, where Indonesians are waiting for a new system on elections next year, the media law is seemingly not top priority.
Television executives and observers agree the timing could not have been more appropriate because the country is facing global pressure from a more open market and economic woes threatening stations with bankruptcy.
The bill states foreign investment in print media is allowed up to 25 percent, and respectively up to 25 percent and 40 percent in the television and film industries.
"Stations are in need of capital injections. Realistically, at this time, there will be no capital from local investors," RCTI television station spokesman Eduard Depari said.
Fresh money from abroad is expected to help. The industry's backbone of advertising revenue can no longer support the industry. And if the economic situation persists, one or two of the nation's five private stations are expected to fold.
Advertising spending on television last year slumped by 17 percent to Rp 2.21 trillion from the Rp 2.678 trillion recorded in 1997, according to the Indonesian Advertising Agency Association.
Still, the draft law, Depari said, was not sufficiently anticipatory for the future.
"Twenty-five percent is a compromise from the government. But the question is after 2003, that could be considered as an entry barrier."
In 2003, when the 10 members of the Association of Southeast Asian Nations implement their ASEAN Free Trade Agreement, barriers to foreign investment will be removed.
Columnist and TV talk show host Wimar Witoelar echoed the need to open up the sector. "If we are committed to an open economy, foreign investment is positive."
Witoelar said the total number of shares, either 49 percent or 51 percent, was not the issue.
"I think we should protect the interests of investors -- whether he or she is an Indonesian or a foreigner is not important."
He said it was more important to protect the right of people to access to quality programming of information and entertainment.
The specific article is also expected to create a level playing field for the stations, TPI spokeswoman Theresia Ellasari said.
Without naming names, Ellasari said foreign investment had illegally entered one or two Indonesian stations.
"This fact undermines the power of the law and the impact is creating unfair competition," she said.
With a total population of more than 200 million and an estimated 26 million households as an audience, the Indonesian market remains attractive to the rest of the world. In the economic crisis, foreign investors will also see Indonesian firms as promising because they are all undervalued.
However, big questions are already looming. There is uncertainty over whether private stations still have to contribute 12.5 percent of their gross advertising revenue to TVRI. Private stations find the obligation a heavy burden. All stations except for RCTI have yet to pay TVRI, and as of March the total amount reached more than Rp 117 billion.
Article number 21 of the bill states that TVRI is financed by the state budget, advertisements and other legal sources. Ads were banned from TVRI, which is run under a foundation, in 1981. TVRI income comes from the state budget, public license payments and the 12.5 percent deducted from gross advertising revenue of the commercial stations.
"I assume since TVRI can now carry commercials, private stations will no longer contribute advertising revenue to TVRI. It is not rational if they ask for it," Depari said.
Depari said the status of TVRI should be made clear. "Is it a public broadcasting system, or is it a state television network which is barred from airing commercials, or a state enterprise which is run professionally and can be a profit center?"
Other substantial changes for television include the obligation for private broadcasters to provide shares for their workers, and restrictions to media cross-ownership. For example, a shareholder of a free TV station is allowed to have shares only in one other media (print media, radio station or pay TV).
A major drawback of the bill is that it does not protect public interest or public safety. "It is clear that there is only government interest in the bill," Depari said.
He would prefer to see the bill passed into a law by the next legitimate legislature concerned with the issue.
And there will be no more instant revisions of a law which is considered outdated, as was the case with the broadcast law.
The writer works for a private television station.