For the attention of Director-General
Directorate-General for Communications Networks, Content and Technology
Subject: Klubrádió’s rights to provide media services
I received your letter of 12 February 2021 regarding Klubrádió’s rights to provide media services.
As I explained earlier, neither the EU acquis you are very familiar with, nor the Hungarian laws based on that offer any legal possibility in the current situation that would allow Klubrádió to broadcast temporarily.
I am convinced that a procedure in contrast with the laws and the principle of equal treatment cannot be in the Commission’s interest either, since this would not be in conformity with the rule of law criterion that we all consider important.
I wish to refer back to my response sent to Vesa Terava, Acting Director of the Directorate-General for Communications Networks, Content and Technology of the Commission on 12 November 2020, in which I elaborated our legal standpoint on the case and its background, and which we reiterated during our discussions with the Commission in January and February 2021, providing extensive responses to all the questions raised by the Commission.
In light of the above, it is regrettable that the current communication from the Commission does not respond to our previous arguments and disregards the objective facts.
In view of the above, I find it justified to reiterate the facts related to this matter as a summary.
I uphold our position that the provisions of the directives referred to in your letter are not applicable in the Klubrádió case.
Klubrádió does not provide an electronic communications service, but a radio media service. Hence the issues raised in the matter are not electronic communications regulatory issues; the Media Council do not handle frequency management tasks related to electronic communications.
I continue to maintain that both the Hungarian regulation and the Media Council’s proceedings comply in all respects with the rule of law principles guaranteed by EU and Hungarian legislation.
According to the provisions of Act CLXXXV of 2010 on media services and mass communication (Media Services and Mass Communication Act), renewal of licences for providing media services without tendering is an exceptional procedure, an opportunity that can only be applied if the media provider requesting the renewal complied with all laws and regulations during its operation prior to the renewal application.
By declaring that not all infringements, but only severe or repeated ones count as reasons for exclusion, section 48 (7) of the Media Services and Mass Communication Act sets out a proportional requirement for such renewals. In my opinion, this is a proportional and fair criterion since state-owned analogue frequencies are scarce resources, and providing them for media broadcasting purposes without a new tender constitutes an exceptional right when compared to a right gained generally on a competition basis. I wish to point out that there are Member States where obtaining licences for providing media services without tendering, as with the Hungarian procedure, is not possible, and only by tendering can media service licences be granted.
As I have explained on several occasions, the rules prescribed in the Media Services and Mass Communication Act have been unchanged in Hungarian law for almost 25 years, and Klubrádió has been providing a media service for more than 20 years, so the prevailing regulatory framework was known to Klubrádió too.
In spite of this, between 2014 and 2021 Klubrádió committed infringements in its operations 6 times, two of which were repeated infringements, which means that it committed – i.e. repeated – the same infringement of failing to meet its obligation to provide information twice within 365 days.
The Media Council informed Klubrádió in advance in writing that there were legal obstacles to its renewal application. Nevertheless, Klubrádió submitted its application for the extension of its licence for providing media service. In line with the legislation in force, the Media Council had to decide on this application for extension first. This procedure prevented the Media Council from issuing the tender for the use of the frequency used by Klubrádió until it had closed the procedure based on the extension application, and Klubrádió could have won this tender before its media service licence expired.
According to the law, in an extension procedure it is no longer possible to reconsider or re-evaluate previous infringements. Yet it is important that Klubrádió’s repeated infringements – precluding the renewal – cannot be considered minor: Klubrádió failed to meet its obligations to provide information for 18 months in total, which prevented monitoring statutory requirements that are mandatory also under EU regulations. Against this background, it can be established that the conditions for lawful operation were not met in Klubrádió’s case.
In line with the requirements of a proportional and gradual approach, and the principle of objective and transparent sanctioning, the Media Services and Mass Communication Act clearly provides for the consequences for infringements committed – so in this context the Media Council has no option to exercise discretion. If the obligation to provide information is not fulfilled, the Media Council imposes a fine.
Based on the law, the Media Council has some discretion only with regard to determining the amount of any fine. In both cases, the fines were low; the reason for this was not the insignificance of the infringements, but the Media Council taking account of Klubrádió’s financial position, and not wanting to impose a fine that would make it difficult or impossible for the radio to function.
Thus, the severity of the infringement cannot be inferred from the amount of the fine alone. Besides, it is also important that Klubrádió acknowledged the infringements and their severity by not appealing against the decisions when they were issued.
Accordingly, the existing law precludes any renewal of right to provide media service without a tender, and the Media Council had no option to exercise discretion in making its decision on the renewal application of Klubrádió.
The judgment rendered by the Budapest-Capital Regional Court on 9 February 2021 clearly confirmed that the Media Council reached a lawful decision in not extending Klubrádió’s licence based on the available facts.
The conditions specified above are clear and objective, and by applying them, the Media Council proceeds in a verifiably consistent manner, irrespective of any political issue or party affiliation, and excludes those who do not meet the relevant legal conditions from taking advantage of this renewal opportunity.
In my previous letter, I gave a detailed and itemised explanation that many other radio stations were denied renewal of right to provide media services by the Media Council, including in cases similar to that of Klubradió, where the reason for denial also was a repeated failure to meet the monthly obligation to provide information.
Please note that the Media Council has issued a new tender for Klubrádió’s frequency, and Klubrádió is not disqualified from this; in fact, based on the tender conditions it has an advantage simply because it already broadcasted its programmes on this frequency.
The two applicants disqualified from the tender have since withdrawn their legal actions, so the Media Council is continuing with the tender in which Klubrádió is currently the only participant.
I trust that our cooperation will continue on a professional basis, in the framework of which we are intent on continuing to provide the Commission with all the necessary information.
Budapest, 19 February 2021
You can download the official version of our answer in Hungarian here: Az NMHH nyilvános válasza az Európai Bizottságnak (NMHH's public response to the European Commission)