Cardozo Law School
Jacob Burns Institute for Advanced Legal Studies
Working Paper 010
April 2000
Privatization and Self-Regulation as Tropes of Global Media Restructuring
Monroe Price
This paper can be downloaded without charge from the
Social Science Research Network Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=222112
Privatization and Self-Regulation as Tropes of Global Media Restructuring
There is a power to language itself in affecting media reform around the world. The field of
media regulation is filled with examples of strong ideas, encapsulated in words and phrases, that have an
enormous impact on legislative transformation, and the export of which seems a characteristic of
globalization. Just think of the ideology-laden tropes that form the vocabulary of reform: “the
marketplace of ideas,” “free and independent media,” “public service broadcasting,” “communication and
development,” “strengthening national identity,” “assuring pluralism.” The invocation of each of these
phrases has, behind it, a freight train of implications. The adoption or embrace of one of these concepts
virtually commands various media structures behind it. For that reason, there is a contest to instate in
the public consciousness some first principles of media reform goals, and, further, to raise some
concepts to a position of superiority. The very course or structure of reasoning can be determined by
affecting which building block is to be the cornerstone. Because the modification of discourse alters the
process of law making, we must pay attention to the discourse itself.
Of course, there is much else in the combination of forces that influences the way legislation and
media structuring take place. Economic forces, the ability of the International Monetary Fund or the
World Bank to condition loans on conforming actions by receiving states, and the internal balance of
power within states have significant impact on the restructuring process.
1
But language and the ideas
that language collects cannot be underestimated. All missionaries know the power of a concept, or a
concept joined with an image. In the struggle to shape media structures, this school of concepts is
particularly important and is the subject of efforts by competing states to alter modes of thinking around
the world. One of the highest of high concepts is the First Amendment of the U.S. Constitution. Accept
the First Amendment, and so much else follows. Similarly, accept a model in which the state’s role is to
assure information, education, and entertainment, and another set of consequences ensues. These
grand models have been much discussed.
I want to discuss two additional themes that are escalating as part of the central vocabulary of
media reform. These themes are privatization and self-regulation. Once local to the developed countries
as a category or mode of discourse, these terms are now found in the idealized toolkit of change
everywhere. These concepts have advanced or are advancing from being a mere descriptor of a
technique to something closer to a point of advocacy, a measure of satisfaction in terms of a Western
template. Of course, privatization and self-regulation are specifically part of the armament to lessen
dependence of the media on government. Greater privatization and an emphasis on self-regulation
generally reduce the capacity of authoritarian entities to exercise control. Simultaneously, they are
aspects of a global discourse that is central to a specific restructuring process, one in which multinational
corporations advance a model in which, in most destination states, terrestrial distribution is by
autonomous private media entities.
I focus here on these concepts not only because of their timeliness and implications for shaping
legislation, but also because of the differences between them. Privatization has already had a
substantial operational history in the construction of media reform throughout the West including in the
transition societies of Central and Eastern Europe and, to a lesser extent, the former Soviet Union.
2
Privatization is a doctrine with sharp edges; there is a clear process for implementing it, and a network of
experts, from investment bankers to development specialists, who bring a methodology to bear in its
implementation. Self-regulation is fuzzier; the bundle of motives behind it is sometimes more complex,
and its formal introduction in transition societies is more doubtful. It has had, however, a more
significant impact in advertising and content standards in the United States and in Europe and is
extending itself to the Internet.
I. Privatization
One of the hallmarks of the global restructuring of the media has been the shift in control of
much of the sector from the public to the private. This is true for channels of distribution, and, as well,
for the programming that streams through those channels. What makes public broadcasting public, is, in
large part, a matter of ownership or control of the filter through which programming is selected for
distribution. A related aspect of what renders public broadcasting categorically distinct is control of
production of the programming itself. To be sure, there are still many societies where the media, as a
whole, are in the hands or control of the government, but the tendency, fairly constant over regions of the
world and even across forms of government, has been toward widely expanding the role of the private
sector. What is commonly thought of as globalism is, automatically, one of the great contributors to this
process. By turning toward audiences abroad, the great multinationals, world-straddling, many-homed
and of diffuse allegiances, have massively reoriented the relative distribution of content around the world
from the public to the private. This new and permanent cloud of private programming can find its profit
only if it ties to distribution mechanisms that yield audiences. Its very existence, hovering omnipresence,
and accessibility inevitably alters information flow, inducing innovation in its redistribution. More than
that, in many of the post-Soviet societies of Eastern and Central Europe, and many other places besides,
the partial or entire privatization of government channels was part of the landscape of democratisation.
In this Essay, I wish to put into context this remarkable shift from the public to the private in
many parts of the world partly by exploring different meanings of moving toward the private and the
implications of this move for accountability. Both advocates and opponents of privatization contend that
it encourages investment, often foreign, and with new levels of investment come new program
strategies, including, in many areas, increased non-indigenous programming.
3
At least the opponents
argue that all of this leads to the intensification of a tendency toward the culture of the modern, part of a
cosmopolitan globalization, one that detracts from sovereignty of the state and the strength of civil
society. On the other hand, proponents of privatization argue that the move in that direction can mean
the opening to many more outlets of expression, much more in the way of incentives to production, and a
flowering of creativity. Privatization can be by degrees, and it is easy to imagine a society that
undertakes a comprehensive system of privatization, but government, for reasons of power and identity,
retains substantial control of the broadcasting sector.
But what is privatization? For those relatively remote from the process, implied in that drama is
a uniformity of transformation. The term, however, has many meanings, but most simply it refers to the
sale of a formerly government-operated enterprise to a buyer in the private sector, as in the
denationalizations in many sectors in the 1970s and 1980s. In broadcasting, a core instance of
privatization in Russia was the decision to turn one of the television channels over which the state had
total control during the Soviet period into a stock company with substantial private ownership. A different
form of privatization in broadcasting may take place when a “public service broadcaster,” like non-
commercial channels in the United States, are turned over to private enterprise in whole or in part. This
is not strictly a move from state control, not the wholesale recasting of a national system, but it shares
important similarities from the point of view of the public sphere. The significant distinction is that
privatization takes place when ownership patterns change to remove or substantially diminish state or
public control of decisions concerning media space and increase that of private entities that are usually,
but not always, commercial.
Privatization, in this broad sense, also encompasses a government decision to make available to
commercial broadcasting entities frequencies that were previously reserved for state purposes. Such
privatization of frequencies occurred in Poland, Hungary, and the Czech Republic.
4
The former
monopoly state broadcaster remained in existence (though itself, transformed), but private national or
regional channels were licensed to compete with it and rapidly attracted audiences. Privatization can be
a matter of moving step-by-step, or be part of a systemic change, consciously undertaken, in which the
relationship of the state or the public sector to information space is calibrated and consciously reduced.
Privatization was put forward as a goal, in most of the transition societies, as means of part of
the shock treatment of the movement toward capitalism. Radically altering the ownership of the light
bulb industry in Hungary or the automobile industry in East Germany had democratic implications, but
the significant aspect was tied to a particular theory of efficiency and of reducing the power of the state.
Privatization of newspapers and broadcasting shared certain of these efficiency-related goals, but the
mandate was far more pressing and seemingly far more central to the democratic project. The reasons
for most privatizations are usually presented as economic, in terms of efficiency, and social, in terms of
reducing the power of the state. Thus, the impetus to privatize broadcasting channels has a strong
motivation in terms of its free speech implications. It is the singular step that superficially, but literally,
removes the broadcasting or press entity from the direct control of government. The 1990s was a
drama, acted out transition state by transition state, to determine whether the central engine of
broadcasting would be altered in ownership or subjected to competition. One defining characteristic of
these transition states was the dramatic though never total shift in the production of images from public
to private hands. So much of change in the structure and delivery of information has been associated
with the reordering of ownership in this particular sense.
Privatization of the media is advanced for reasons that mix efficiency with speech and discourse
principles. Privatization not only increases the operating efficiency of companies currently managed by
government institutions, but also makes the operator more sensitive, it is often said, to demands of the
audience. As to media, it is less clear how efficiency ought to be measured, especially if the media are
supposed to serve information-related functions, pluralism and national identity. While profit
maximization is usually the central goal of a private sector firm, the government, when it operates the
media, often commits to other goals, such as helping to create an informed electorate, protecting the
sanctity of the local language, and ensuring access for minority groups.
Privatization is an example of the use of conditionality. For example, Poland, on October 18,
1999, approved a bill to liberalize ownership of the country’s television companies as part of the process
of meeting the requirements of European Union membership. The draft law would allow foreign
investors to hold up to 49 percent of shares in television firms with terrestrial broadcast licences. Prior to
the effort to comply with EU standards, investors were limited to owning stakes of no more than 33
percent. “Full liberalisation (majority foreign ownership) will take place at the time of our entry to the
European Union,”' Krzysztof Marcinkiewicz, chief adviser to the prime minister commented. Those EU
officials who had monitored Poland’s compliance, criticized the existing law and claimed that it permitted
the two channels of public television and the domestically controlled private station, Polsat, to dominate
the market. Foreign firms were free to invest in cable and satellite television firms operating from
abroad, but, as was true in so many places, terrestrial broadcast stations, still watched by the majority of
Polish households, remained subject to ownership restrictions. Interestingly, liberalization had its limits.
Under the draft law, coded pay television services, such as French Canal Plus and Dutch-owned Wizja
TV, could not buy exclusive rights for important social, cultural, and sporting events.
Too much can be made of the principled arguments for privatization, important as they are. The
act of changing ownership patterns may merely be the occasion for shifts in terms of power and control
and the opportunity for redistribution of wealth. In some instances, privatization meant the transfer of
ownership from the state to the journalists (Izvestia), in some cases from the central government to the
regions (or oblasti in Russia), and in other cases from a nomenklatura that had been in charge of
government to one that now saw itself as private entrepreneurs. And while democracy-related goals may
have been involved, government sale of frequencies or channels also had deep fiscal motivations,
stemming from powerful pressures to reduce government expenditures and debt. As with other aspects
of the economy, privatization had to be considered if the state wished to qualify for certain international
money sources.
5
An important impetus for privatization was the claim that it provided incentives for
modernization and innovation both of which require, in a time of expensive and changing technology,
great investment. Privatization is said to be a condition for increased equity that will be a spur to
investment, and investment in a way that cannot, under then-existing circumstances, be otherwise
obtained by government. The World Bank and the International Monetary Fund often conditioned
economic aid to its government borrowers on the design and implementation of a privatization plan, and
exerted great pressure on transition societies and developing countries to privatize, though this was
much more the case with in the area of telecommunications than in the area of broadcasting.
I have already suggested that privatization of the media has been radically different in different
contexts. Insufficient attention has been paid to various types of transformation. If what we are
concerned with are problems of democratization, problems of strengthening the public sphere, then
movements to the private sphere must be analysed with that in mind. Some privatizations increase the
number of voices, others do not. Some lead to an increase in critical coverage of the government, but
others do not. Some privatizations, probably most, reduce the extent of state control of the media space.
To understand the relationship of privatization to these questions, there needs to be something
approximating a taxonomy, one that enables the analyst to distinguish among the various kinds of
actions that might fall within that rubric.
For example, one can speak of the partial privatization of central state television in Russia where
President Yeltsin decided to sell 49 per cent of the first channel to industrial groups he selected. This
was a partial privatization, designed to strengthen, not weaken, the role of the president in his capacity to
shape programming. Privatization includes the opening of the FM frequencies in India to commercial
channels, originally on the condition that they broadcast anything but news and information. Each of
these kinds of private is vastly different from others. Privatization took place earlier in the Czech
Republic than in Hungary, and that timing may have consequences for how television evolves and how
the public broadcasters react. Neither in Hungary, nor Poland, nor elsewhere in Central and Eastern
Europe did privatization mean a complete absence of public service television. The establishment of TV
Nova with the first channel remaining in public hands in the Czech Republic is more the norm than the
exception. In Russia, in 1998, existing state broadcasting entities were regrouped and reorganized better
to compete with the now strenuous private sector. Privatization in some transition states was a
consequence of auction, and, in some instances, foreign investors were free to invest up to full
ownership of the broadcaster. In some states, the license to broadcast is private, but the transmission
facilities remain in public hands. Similarly, while newspapers are generally free and private, the
distribution facility (and, often, the equivalent of the news agencies Reuters or Associated Press) is still
owned by the state.
Each form of privatization makes its own contribution to the public sphere. It matters whether
the “private” is a mere surrogate or alter ego of the state—as is often the case—or whether it suggests
independence of the state. The state is unlikely to shed voluntarily its control over information space in a
manner that would lead to significant weakening of the government itself. Because President Yeltsin
selected who would be the new private “owners” of central television, ORT, what percentage they would
own, and what payment or liability they would have, the relationship between ownership and pluralism
was significant. Corporate governance is also telling. In the case of ORT, the specific outcome meant
that 51 percent of the ownership lay in state hands, though distributed among three agencies. Under the
president’s direction, a mode for the voting of the disparate elements of state ownership was determined.
In Malaysia, MEASAT, the monopoly over satellite broadcasting and the cable industry, was lodged in
the hands of industrial or financial entities with extremely close ties to the government. This form of
rendering the information space into private hands allowed flexibility for complex financial transactions
and relatively autonomous decisions concerning what program channels would be carried. It also
assured that such decisions would be made in a manner consistent with Mohammed Mattathir’s
emphasis on “Asian values” and his approach to information space in Malaysia.
Because frequencies are made available for private television or radio use through a process of
licensing, it is important to examine how the process operates. The institution that effectively licenses
broadcasters, which is not always the agency nominally assigned this task, may be so arbitrary in its
awards that the licensees become beholden to government in exchange for the benefit. The nature of
the licensing process as maintaining a link to the state becomes even clearer if the license is subject to
renewal and the process of renewal is problematic and subjective.
6
The form of regulation may be such
as to make the regulator and the licensee, in the final analysis, virtual partners. In Russia, NTV, the
extraordinary channel and then network developed by Igor Malashenko, received its start through the
assignment of an unused portion of the Russian Educational Television Channel spectrum, not through
the established licensing process. This complex birth meant that the channel, for many years, had a
special tie to President Yeltsin because it was he personally who decided that private broadcasting
should have its origins in this way. On the other hand, a regulator may be confined to a limited role or
may have, as an operative mandate, the assurance of a pluralistic or objective and impartial
broadcasting system. The Polish regulatory agency seemed to strive for this result. All of these
elements are relevant in determining the quality of “privateness” that characterizes the licensee.
Even these few details suggest that it is useful to think of privatization as more than the
conversion of a previously public or state entity into one that is in private ownership. If one thinks of the
general problem more broadly and considers issues of public control over production and distribution of
content and, within those issues, direct state control as compared to autonomous public sway, then the
circumstances and factors appropriate for analysis can be expanded. For example, the tendency toward
the private can refer to the increasing reliance on advertising revenues of entities that remain public
service broadcasting, without any private ownership. That tendency is characteristic of public
broadcasting in the United States as non-commercial stations become increasingly reliant on
sponsorship and underwriting, and even openly begin to accept direct advertising.
There are many state broadcasters for whom advertising is a major source of revenue. This kind
of privatization has been an important factor in the transformation of Russian television, of Doordarshan
in India, and the former state television in Hungary and the Czech Republic. In some transition societies,
in fact, public service broadcasters used discounted access for advertisers as a way of competing
against independent competitors and were accused of unfairness as a result. There were moments when
legislation gave public service entities a monopoly, for example, on political advertising or on modes
foreclosed to independent competitors, such as tobacco or liquor advertising. In Russia, there was a
significant arrangement in which much of the fiscal control of the state broadcaster was hived off to a
single advertising agency that prepurchased all or most of the slots and then resold them at a profit.
Foreign investors, precluded from buying the state broadcaster, were permitted to invest in the
advertising firm. At one time in the 1990s, a reform-minded director of ORT, Listyev, announced that he
intended to change the nature of the relationship between advertising and the broadcaster. He placed a
moratorium on advertising. Shortly thereafter he was murdered, and rumors persist as to a link between
his death and his policy initiative.
If the concern is the balance between the private and the public, the mix of voices in the society,
then a broadened privatization might be thought to occur when there is an intensification of an already
private sector, the rendering of it, as it were, more private. Consider the historic existence of public
interest obligations on American broadcasters, obligations, for example, to cover controversial events of
public importance, or act as a voice for the local community.
7
The removal of these obligations through
the process of deregulation could be said to be a form of rendering the private more private. Similarly,
allowing home-shopping channels to be designated as meeting American licensing standards or relieving
stations of an obligation not to indulge in “overcommercialization” expanded the private nature of the
system. In the United Kingdom, it was certainly a change in the balance to allow a single private
competitor to the BBC, and it might be said to be a further altering of the balance when additional
national or regional licenses for independent television were offered.
8
In many societies, systems became more private simply by becoming more open to foreign
competition. Moreover, this openness could be established not through the process of licensing or any
affirmative government action, but by the opening by operators of slots on cable television systems to
satellite-delivered channels, usually foreign-owned. Certainly this was true in India, where the arrival of
satellite channels created a vast change in thinking both about the system as a whole and about the state
broadcasting system itself.
9
In Turkey, the reaction to the existence of foreign satellite channels coming
into the country was to establish a liberalization for private broadcasting within, and thereby attempt to
harness or regulate the processes of change. A measure of the changing balance between the public
and the private is the conduct of the consumer. In almost every system where new and private domestic
channels compete (often because of cable and satellite), the impact on state broadcasters, in terms of
share of the audience, is dramatic, sometimes terrifyingly so. State broadcasters decline from their
monopoly position of 100 percent of the audience to 90 percent, then 60 percent and then far lower.
Privatization leads to programming that almost always enmeshes the public service broadcaster,
rendering it less capable of meeting the needs of a public sphere. Whenever there is competition
between an entity that has an unencumbered right to satisfy consumer demands and an entity where
obligation of managers is to government, to stay in power, or to meet restrictive requirements, the
unencumbered competitor will, in the long run, gain audience share. That has been the experience in all
the post-Soviet markets. Privatization sharply reduces the role of the public service broadcaster and its
audience share. The essential quality of “private” in this reading, is the strategy to meet public demand,
and managers whose tenure, or success with investors, depends on meeting that demand.
How can one measure whether the tendency toward the private contributes to the public sphere?
Privatization may be a necessary method of having control of media reflect changed constituencies or
power groups in society. This might be especially true where there has been a monopoly provider and a
plural society. It is theoretically the case that a monopoly provider, like the pre-ITV BBC, can become an
accurate reflector of diversity of society, seeking to carry out a responsibility to represent various
viewpoints and groups. But diversity is more credible, and usually more likely and more permanent if it
springs from different sources. One could have diversity without privatization. The complex and
mechanical process in the hey-day of Dutch broadcasting of semi-public entities dedicated to pluralism in
the Netherlands was once an example. In the effort to have a plural federal broadcasting authority in
federal Bosnia-Herzegovina, the posts of chief and deputy are allocated among the national
representatives. But in many places, a shared public space would be unthinkable, and the aura of
autonomy that often goes with private ownership is essential.
In some transition societies, privatization, or the emergence of private entities, is essential as a
means of breaking the stranglehold of the state broadcaster that, through staleness, might itself be
weakening state sovereignty. The existing state-controlled system may be outmoded precisely because
it bespeaks an old, surpassed, and ineffective perception of the nation. The broadcasting bureaucracy
at the moment of transition has been weighed down by ingrained modes of thinking and the legacy of
warehoused personnel, and inherited and inflexible attitudes toward society have squeezed out the
voices of difference. No matter how much the leadership of a massive broadcasting bureaucracy of the
ancien regime changes, it can be an albatross against the efforts for change. Without the competition of
the private, it may be difficult for the entirety of the enterprise to represent adequately new political
forces or tendencies in the society. In India it required the competition from cable television and
channels carrying satellite signals from abroad to force substantial changes in the programming
strategies of Doordarshan.
10
In Turkey, it was competition from new quasi-pirate stations—some
unofficially supported by the government—that led to greater reflections of diversity in the information
space. Only because of satellite-delivered private programming, pro-Islamic in nature, was the
monolithic nature of a possibly outdated approach to information and culture ameliorated. In each of
these contexts, changes in the state monopoly and challenges from the private sector affected political
identities and, it could be argued, ultimately elections and their processes. For all these places, changes
in media structure in terms of sovereignty may have increased the viability of the state. An increase in
private stations can weaken the power of the incumbent, but in the process redefine and reinvigorate
sovereignty in terms of pluralism. Many governments view this kind of potential as an attack on
sovereignty when it is merely an attack on the status quo.
In Russia, one misleading possibility would be to understand the transformation of ownership of
the first network from a state monopoly to a mixed state and private ownership in this way. The private
is invited in as a means of diversifying control and of altering or eliminating the total hold of prior political
voices. The media sphere is required to match the politico-economic sphere as major interests control
segments of the economy. But in the Russian case, the opening was not necessarily to new and diverse
voices; privatization, paradoxically, was used, but not always successfully, as a means of extending and
reinforcing control by the administration. The private may, in this instance, be imported as a means of
limiting a civil society that is inchoate within the public service broadcasting staff. Predominantly,
though, the very presence of the private, newly independent stations fostered by Western aid or NTV,
represent at some critical moments a separate and distinct voice. In Russia, during the key days of the
1993 coup attempt, and in Hungary, Poland, and the Czech Republic, the consequence of privatization
was to give breathing room and a voice for groups that might feel otherwise underrepresented.
Fostering the private also relates to the policies of USAID and others, often working through
extraordinary non-government organizations like Internews, to foster “free and independent” media in
transition societies. Hundreds of millions of dollars have been expended to foster a public sphere by
identifying potential entrepreneurs—often individuals who have not had media experience—and
encouraging them to become fledgling broadcasters. Internews and similar organizations assist them by
providing equipment, sometimes providing direct financing, training, and providing legal assistance to
shape a framework supportive of such initiatives. The goal is to create an abundance of voices, not just
a single commercial alternative, to the state. In Armenia’s Shirak region, the Eurasia Foundation's Small
Business Loan program helped finance the Tsayg television station, the first private television company
in the country. By the fall of 1999, the station claimed a 60 percent market share in the Gyumri and
Shirak regions, attracting an audience through a more liberalized and flexible schedule of music, sports,
and politics, as well as its coverage of local and national news, and analysis of current events. The
station is typical of post-Soviet transitions, first begun by individuals through their personal resources,
and then turning to Western sources, such as the Eurasia Foundation. The foundation not only provided
loan funds, but also assisted in building expertise in running advertising and making commercials. The
station then expanded, like so many of its private predecessors around the world, into such things as
producing and distributing movies and music videos.
These are cases where additional voices bring a critique or alternative perspective to that of the
government. But the move to the private can also be a shorthand for the commercial, and, in that sense,
for an avoidance of controversy, pluralism, and involvement in the public sphere. It is possible that the
benefits to the public sphere from the move to the private are exaggerated; privatising broadcasting can
be a means of reducing the possibility of dissent. In the case of the United States, during the Nixon
Administration there was an explicit effort to weaken the impact of public broadcasting on the ground that
it had hidden partisan tendencies or, at the least, promulgated views of society that were thought
inconsistent with the Administration’s goals. In that instance, the approach was not the rendering of the
public broadcaster more private, but, rather, preventing measures that would lead it to become more
centralized and stronger.
TV Nova
A complex example of the move to the private involves TV Nova in Prague, the star in the crown
of Ronald Lauder’s Central European Media Enterprises (“CEME”) empire. It is an early example, in the
post-Soviet period, of the introduction of an American-style private broadcaster into a formerly closed
environment; it was wildly successful. As in so many countries, Czech law had imposed a limitation on
the extent of foreign ownership of a broadcast license. The very concept of the station, the marketing of
the idea to Czech officials, and the package of programming and engineering know-how that was
needed, all depended on outside investment. These dual and conflicting imperatives, between the need
for foreign capital and the desire to keep broadcasting in local hands, often yields a problematic structure
of corporate governance and guarantees. That was the case with respect to TV Nova.
The Czech license was granted to CET21 a company that was controlled by Vladimir Zelezny, a
Czech citizen. CET21 was formed jointly by Mr. Zelezny and Ceska Nezavisla Televizni Spolecnost
(CNTS or Czech Independent Television Company) in 1994. CNTS was wholly owned by Lauder’s public
company, CEME. CNTS had certain contractual rights with CET21, including the production of programs
and rights concerning advertising revenues.
TV Nova was one of the most successful of the new television entities in Central Europe. In
1998, it earned $55 million, securing 75 percent of Czech advertising revenue. In 1999, CEME was
acquired by a larger Scandinavian company, SBS (in which the American company ABC was a
shareholder), for over $515 million. TV Nova was one of the treasures that made CEME attractive. For
reasons that were disputed—but which certainly included the portion of the proceeds that would have
gone to the Czech partners—Zelezny decided to part company with CEME and to operate the license
without his joint venturer. In a sense, Zelezny exercised the right of the Czech citizen to have an
independent use of the television license. By doing so, he pulled the rug out from under CEME and the
entire SBS transaction. CEME stock slid from $30 per share to little more than $1.60; the arrangement
with SBS collapsed. CEME and Lauder sought the assistance of the Czech government and the
broadcast regulatory board. But the regulators found no actionable lapse in Zelezny’s operation of the
license that would require him to return to the Lauder fold. In a way, Zelezny was demonstrating that the
condition of Czech ownership could not be violated.
All of this is interesting as an exercise in the hazards of broadcasting transactions in transforming
societies. But more important, here, is what the story tells in terms of civil society, democratization, and
policies toward privatization. TV Nova was a heavily commercial station. There were many complaints
that it did not live up to the conditions imposed on the license at the time of grant. During the period of
CEME’s strong hold on the station, the American interests lobbied the Czech government to allow it to
continue to broadcast primarily American programming even after the Czech accession to the European
Union. TV Nova was a station that commanded a large audience and helped shape its opinions as any
station is supposed to do. Its success weakened the state public broadcaster. It was no worse and little
better than most commercial equivalents. The TV Nova case has, however, the additional complexity
that Lauder sought to hold the Czech Republic accountable for losses to CEME. After CEME’s falling out
with Zelezny, Moody's Investors Service lowered the company’s debt rating to a speculative grade, Caa-
1, and warned investors that the rating might be reviewed again with the “direction uncertain.” Then, in
April 1999, CEME filed a lawsuit with the International Chamber of Commerce’s Court of Arbitration in
Paris to prove it was the rightful license holder for TV Nova. It also sued in the Czech courts to get the
license back.
In August, Fred Klinkhammer, CEME’s executive director in the Czech Republic, unsuccessfully
asked members of the standing parliamentary commission for the media to re-examine the granting of
the broadcasting license to CET21 in the first half of the 1990s. The CEME also condemned the Czech
Republic’s Council for Radio and Television Broadcasting for not acting. The arbitration action was
based on the Czechoslovak-U.S. agreement on bilateral protection of investment, signed by President
Vaclav Havel in 1991, and the CEME demanded compensation for the suffered loses and a renewal of
the previously agreed on contracts. “What Mr. Lauder wants is restoration of his rights and
compensation for damages,” said John Kiernan, a New York-based lawyer for Lauder and CEME.
Lauder also launched a major campaign to convince the Czech Republic that there would be
long-term adverse financial implications if his investment in Prague was allowed to diminish in this way.
The U.S. ambassador to Prague, John Shattuck, was quoted as saying “the U.S. Congress was closely
watching developments in the dispute.” A September 1999 article in the Prague Post cited an American
investment banker as saying that he would definitely take the TV Nova affair into consideration when
contemplating investing in the Czech Republic: “A country should not expect the U.S. to provide capital
and expertise and then let the locals strip us without recourse.”
11
The relationship between the private and public can also imply a more radical function, the very
redefinition of the nature of the sovereign. From a perspective of the market for loyalties the line might
be drawn between privatising in a way that can question the regime and stations that can question the
state itself. Imbedded in some programming, and often quite threateningly so, is a question of whether
borders ought to be altered and how power is to be redistributed. Noted cases involve Kurdish voices in
Turkey and nationalist Bosnian Serb broadcasts in Republika Srpska. News may be maintained as a
monopoly of the state broadcaster, as was the proposed case in India. It is one thing for non-state voices
to favor a redistribution of power in a secure society, as from Westminster to Wales or Edinburgh. It is
different when a state that is insecure about its boundaries or is facing conflict over them seeks to restrict
the power of those not within its direct control. The tension is raised again when the state takes the
position that the non-state voices are not only threats to the regime, but also proponents of views
inconsistent with the very idea of the state. Independent or non-state voices in Central and Eastern
Europe have not yet been perceived as having effective divisive or separatist roles, though,
undoubtedly, some may have editorial views that have a definition of the state and its role in coalitions
different from that of the government.
Another aspect of privatization, one of the most complex and most important in its relationship to
sovereignty, is the extent to which, consciously or not, programming on new entrants weakens cultural
bonds. There are contexts where sovereignty depends on habits of culture and attitudes, and on the
centrality of religion and the preservation of language. State or publicly-controlled broadcasters are
caretakers of these values. At their best and most expansive, these institutions are generating
programming, making films, supporting orchestras, reinforcing language and setting a benchmark for
news and public affairs. These practices can be undermined by long-term exposure to commercial
programming and the inevitable erosion of audiences characteristic of global multichannel competition.
We may be asking this question: Is there something about advancing the privatization of the media that
accelerates a phenomenon of cultural attrition of a sort that diminishes citizenship and loyalty? Of
course, such programming could and does take place on state or public entities as well, but it is generally
assumed that the incursion of private media, to the extent it exists, is most responsible for a corrosive
effect. Left in a monopolistic, unchallenged environment, the public or state broadcaster would not
reduce its output of state-reinforcing messages. And here, “state-reinforcing” is not a reference to control
of news and information that supports the regime. It is a reference, rather, to a mix of imagery that a
democratic state might legitimately wish to deploy as an element of strengthening national identity.
A variant on this complaint, one that demonstrates its censorial side, arises in the critique of the
private and the global in parts of the Middle East. There, television content represents modern culture
and the dangers of exposure to private or uncontrolled media to ancient customs and the very bases,
often, of the polity. Laws concerning “representation of women,” which outlaw satellite-receive dishes
and efforts to maintain an insular information space in other ways, are hallmarks of this view. But the
antimodern is not restricted to the mullahs of Iraq and Iran. In the United States, it is reflected in debates
over indecency and violence on American television.
12
The dangers of the “modern,” as depicted in the
forceful images of broadcasting, was the major unstated argument delaying the introduction of television,
and then color television, in South Africa. This cultural component is the justification for monopoly
control over television imagery in Malaysia and Singapore.
This question of cultural bonds and loyalty is central to the definition of a civil society and the
nature of a particular public sphere. But the acceleration of the private may not alone be responsible for
the embrace of the modern. Competition by the public service broadcaster for public funds or increased
licensing fees by changing the nature of the monopolist’s programming is possible, but there are not so
many examples of this behavior. Competition between the Russian first and second television channels,
for example, did not necessarily create demand for Western programming.
To examine this question more closely, it is necessary to separate the privatization of
“entertainment programming” from the privatization of news and public information. Most of the public
discussion of challenges to sovereignty, or at least to regime-stability, deals with the privatization of the
news and information space, or the creation of competition in the arena of news and information. News
and public affairs are asserted as the hallmarks of a democracy-spreading global medium. But in terms
of the capacity of the state to survive as a cultural and political icon, sovereignty may be more a function
of entertainment and leisure patterns than of news. The famous literature on the rush to bring down the
Berlin Wall emphasized the subversive aspects of Western music, automobile advertising, and
depictions of life on sitcoms as much as, if not more than, news accounts of citizen freedom. The
surrogate radios, Radio Liberty and Radio Free Europe, had their effectiveness, but so did Coca-Cola
and Michael Jordan. To be sure, a radical and critical set of voices undermining the posture of the state
can be threatening, but privatization may produce news that is more various than critical, more soothing
than damning, and more about the abundance of crime in the United States than about dissent at home.
The advertising and entertainment programming, on the other hand, that accompanies the
private may be more subversive. It is more likely to contain the powerful images of the modern, of the
virtues of consumption and the vices of a social structure in which consumption is doctrinally
discouraged or rendered economically impossible. In 1999, the BJP government in India announced a
plan to privatize some FM radio frequencies but precluded the new licensees from becoming producers
or distributors of news.
Market for Loyalties
I want to link this discussion of privatization and the tendency to the private to the thesis I have
described, in the Yale Law Journal, as “the market for loyalties.”
13
There, I contended that media
regulation frequently constitutes a government-enforced cartel among competitors for loyalties. Changes
in media regulation come about to reflect changes in the cartel itself. Some laws are designed to protect
the cartel against competitors. Some reforms are fashioned so as to allow some new members to enter,
but to protect a redefined cartel. Globalization suggests the incapacity of the state to maintain a cartel.
It is external forces that determine who are the suppliers of loyalties and how they enter the media and
imagery market. States, in reaction, will try to maintain the cartel, either by regulating the new private
broadcasters, or by barring additional messages. States use laws to require uplinking within national
boundaries, to proscribe messages that are thought to be antithetical to national identity. The use of law
falls within these two paradigms: regulation and prohibition. The test of globalization is whether either of
these strategies can be effective at strengthening sovereignty.
In the market for loyalties, as I have suggested, the major “sellers,” or producers, are a wide
range of manufacturers of identities such as states or governments, but also interest groups and
businesses. They are those for whom myths and dreams and history can be converted into power and
wealth. The “buyers” in this market are citizens, subjects, nationals, consumers, individuals, or their
surrogates; they are receivers of the packages of information, propaganda, advertisements, drama, and
news propounded by the media. The consumer “pays” for one or another set of identities in several ways
that, together, we call “loyalty” or “citizenship.” But the price is not immediately in the ordinary coin of
the realm, though undoubtedly there are those who can perform the necessary quantification. The
charge for loyalties includes not only compliance with tax obligations, but also the obeying of laws,
readiness to fight in the military, or even remaining within the country. I have also argued that, at the
global level, a newly shaped market for loyalties is developing, one that is the media counterpart to
Samuel Huntington’s clash of civilizations.
Left out of this description, however, is the posture of national law as it responds to global
developments. If law is a tool for cartelization of identities within, it must protect that cartel from
competitors abroad. Thus, post-global reactions, not unlike their antecedents, are often tied to the nature
of a political system, and to its organic responses of self-preservation. Everywhere there are such
responses; the question is how to make a science out of them, how to determine the relationship of
response to ideology, to language durability, and to geographical location; how to understand motivation,
whether religious fervor, or a desire to maintain a level of economic growth. At present, in the transition
societies of Central and Eastern Europe, the drama of globalization is being played out in what seems to
be both the statically observable and fast forward. Both implicate the institutional transformations, the
reduction in state control of the central broadcasting empire, the introduction of transient independent
programmers, the formal opening up of the market to private competition, the moment of consolidation
between domestic entrepreneurs and international investors and consortia, the coming of multi-channel
transnational empires, and the flood of images of the global culture. What constitutes fast forward is the
rapid remaking of the images on the screen almost from the beginning—what is vaunted, how people
dress, and the narratives that are told. Television and radio become the handmaidens of the radical
transformations on the street, the coming of McDonalds and the reordering of what constitutes
acceptable visions of the future.
We can ask the following regarding aspects of a legal system as it responds to the global: Is this
a state that maintains a monopoly over imagery, not allowing any private competition, as a way of
avoiding the global? Put differently, is the state’s strategy a short-term effort to maintain control, rather
than a deep-seated effort to encourage a domestic information space that will reinforce a national
identity that serves to moderate the impact of the necessarily available global? What structural
approach does the state build so as to control the incursion of the global through private competitors:
Does it honor consumer choice but single out consensus-based areas of public concern for exclusion or
limitation? Is the function to create a zone of public debate that leads to more involved democratic
processes at home? One can compare restrictions on indecency and concerns about the representations
of women, or prohibitions, as in the Indian broadcast reform on exploitation of religious differences. Is it
possible to parse which of innumerable possible restrictions are designed to constrain news and public
information, and which to place restrictions on importers of drama and entertainment programming,
assuming that such a distinction has any meaning? That does not mean, of course, that censorship of
drama is permissible or more tolerable than censorship of news. Rather, it is to suggest that legal
systems must be understood in terms of goals and methodologies so that their specific rationales can be
understood, and potentials for reform or change suitably evaluated. At bottom, there remains the
question raised in terms of globalization: Recalling that my definition of globalization involves the
incapacity of the state to control the relationship between imagery and behavior, does new
telecommunications technology undermine the power of existing sovereigns to shift attitudes toward
acceptance of their norms?
I have tried to show that privatization and the expansion of the private can be understood in
terms of the market for loyalties. Encouragement of the private may be a means of including voices that
demand to be heard, but are not present in the existing set of media in the society. The means of
privatization can mean that the expansion of views is relatively weak, not designed to threaten the
regime or the state, or that it can be undertaken as a means to inject new support where existing media
are wanting. The relationship between the process of privatization, or the encouragement of the private
sector, and the strengthening of civil society is not clear and direct. Much more must be known about
the context, motivation and consequences.
II. Self-regulation
In terms of the global debate over restructuring and remapping of the media, the concept of self-
regulation has played a different role from that of privatization. Privatization of radio and television channels
and telecommunications has been a tool, often invoked and often implemented, in societies moving from
authority to democracy, or from socialism to markets. Dismantling the governmental sector is often the
hallmark of this process, as we have seen, and privatization is the name given to much of it. Self-regulation of
the media in terms of advertising or programming standards often seems not about reducing the power of the
state, but of altering the role and functioning of law itself. It, therefore, plays a larger role where a society,
comfortable about its commitment to a rule of law, can find and develop space where private institutions or
associations are charged with the formation, implementation and enforcement of norms. In societies where
the tradition has been one of arbitrariness, a gulf between the articulation of norms and their meaning and
impact; where corruption or nepotism have been a hallmark and where there have not been the tools for
testing and enforcing compliance, the very idea of “self” regulation may be premature, in advance of a
consistent practice of regulation itself.
In societies that are in transition, the search may be for a legal framework precisely in order to
guarantee rights, including property rights, and that may mean specially sanctifying the use of law, and only the
use of law, to legitimate the processes of change. In post-Soviet Russia, for example, lawlessness is often the
condition for self-regulation, which, therefore, becomes a part of lawlessness. The circumstances have to be
appropriate for a choice to shift or place certain elements of norm-creation and enforcement within association
or community hands. Finally, in many of the states where media structuring is taking place, certain powers
were never in the state, or were only in the state as a means of enforcing the desires of particular groups or
associations in the society. In a theocratic state, it may be the case that government exists to guarantee and
use force to provide obedience to norms and standards with their source in the dominant religious practice.
The idea of self-regulation, there, has a ring far different than shifting power from the state to a secular group
of business organizations.
Still, throughout the world, partly because of the rise of non-State actors, self-regulation can be
linked to a change in the role of the State frequently characterized as the move from "government" to
"governance," just as there is a shift from the building of international organizations that generate and
administer rules. For example, a “world” government to governing relationships that transcend national
frontiers without sovereign authority, at the domestic level there is a shift toward reliance on private
associations.
14
James Rosenau distinguishes governance from government as follows:
Government suggests activities that are backed by formal authority, by police powers to insure
the implementation of duly constituted policies, whereas governance refers to activities backed
by shared goals that may or may not derive from legal and formally prescribed responsibilities
and that do not necessarily rely on police powers to overcome defiance and attain compliance....
[Governance] embraces governmental institutions, but it also subsumes informal, non-
governmental mechanisms whereby those persons and organizations within its purview move
ahead, satisfy their needs, and fulfill their wants.
15
The World Bank, among others, propounds this idea of a distinction between better
governance through delegation and worse government through reliance on bureaucracy and the
machinery of law:
Good governance is epitomized by predictable, open and enlightened policy making, a
bureaucracy imbued with a professional ethos acting in furtherance of the public good, the rule of
law, transparent processes, and a strong civil society participating in public affairs. Poor
governance is characterized by arbitrary policy making, unaccountable bureaucracies,
unenforced or unjust legal systems, the abuse of executive power, a civil society unengaged in
public life, and widespread corruption.
16
Defining self-regulation
The Internet is a consummate demonstration of the complexity of determining what ought to be
included in the “self” of self-regulation. It can refer to a context in which an industry itself will take on the
regulatory function that would otherwise fall to government (whether that regulation is of the industry or others).
It can refer, more narrowly, to a decision by the industry to regulate itself, as opposed to regulating the actions
of others. (cite?) Both these meanings are asserted in the practice of self-regulation. The Internet enthusiasts
take pride in it being an autonomous interconnected, totally decentralized, set of communications networks. It
is composed of a cornucopia of institutions that partake of self-regulatory characteristics. These entities
establish standards and protocols.
17
The process of establishing, registering and managing domain names is
an example of a self-regulatory mechanism.
18
Voluntary institutions, generated by the Internet community
though with the sometimes not very subtle prod of government, are the backbone of efforts to deal with
harmful content.
19
W3, the entity seeking to develop protocols for websites that can serve as the foundation for
rating and filtering systems, is a paradigm of self-regulation. Self-regulation can refer to unmonitored,
unaudited efforts by the single firm, and it can also extend to an elaborate process in which all users
participate, as well as all firms, with government playing roles that range from design, coercion, auditing,
monitoring or acquiescence.
While self-regulation has a long history related to media, the rise of the Internet and new information
technologies has been responsible for a dramatic resuscitation in the use of the concept. However, to
understand the propelling force of self-regulation and its impact on media restructuring, it is necessary to have
a greater understanding of the various meanings and uses of self-regulation. More needs to be understood
about its various meanings and how they are deployed. An essentialist approach to self-regulation would
require that all elements of regulation—formation of norms, adjudication, and enforcement—be self-generated.
Not only the rules that govern behavior, but also the mechanisms for their administration would arise from
those whose behavior is to be governed. Even the "subcontracting" of rules might violate the purest ideal of
self-regulation if the contractor is the government. Rules must be auto-generated in that ideal model. But it is
rare that any form of self-regulation, save for cartelization, actually exists wholly independent of the force of the
state, and this may be especially true where the field of regulation involves content control on a medium of
expression.
As it functions in the process of restructuring, self-regulation does not have this autopoetic or self-
generating function. Instead, self-regulation becomes an umbrella for a series of representations, negotiations,
contractual arrangements and collaborative efforts with government.
20
Often, self-regulation can be seen as a
range of activity that private actors undertake to prevent more intrusive and more costly action by the
government. Self-regulation is, in part, the intersection between the appetite for public control and the present
capacity of the state to exercise such control. It is also simultaneously a limitation on the state and a
mechanism to increase its capacity to function in a technologically complex environment.
Thus, “self-regulation” is a mode of softening the edge of alternate regulatory models.
21
A standard
approach to regulation suggests three forms of economic and social organization: government organization,
industry self-organization; and market organization. Where any particular form of regulation falls on this
spectrum depends largely on who gives impetus to its development. Moreover, regulation encompasses
varying degrees of legal force and formal organization and there is no clear demarcation between self-
regulation and government regulation. Alternate patterns of self-regulation straddle the three principal forms of
organization, which, in turn, constitute a continuum along which regulation is more or less formalized. Sinclair
argued that ‘much of the current debate has been characterized by a choice between two mutually exclusive
policy options: ‘strict’ command and control on one hand, and ‘pure’ self-regulation on the other.”
22
Both
industry and government have found that there is a much richer range of policy options when self-regulation
becomes a significant factor, allowing great flexibility in terms of achievement of objectives and avoidance of
constraints. Self-regulation and formal legal systems may work best when they are combined.
23
The evolving
nature of the Internet is the kind of change in the media environment that has led to calls for greater self-
regulation.
Most claims for self-regulation in the media restructuring process exist within a highly articulated
existing rule of law system. Self-regulation is, itself, legislated in these systems. Informal self-regulation exists
as well; it is often a substitute for law. This kind of self-regulation may exist in societies that are relatively
lawless or where rule of law is still in the developing stage with respect to the subject of self-regulation. In
addition, informal self-regulation may occur in any society in the early stages of the development of an
industry. It may take place when the industry begins to consolidate but prior to its subjection to uniform legal
norms. In some societies, informal self-regulation takes the brutal shape of non-legal enforcement, by control
entities with names like “mafia.” This kind of self-regulation is important and frequently exists, but is hardly
ever a subject for public advocacy. As each media form, including those that implicate new technology, takes
shape, the mode of self-regulation in that society becomes relevant.
Comparative approaches
There has been a tendency to apply the term “self-regulation” indiscriminately across boundaries as
though it means the same thing in different settings. This is, however, clearly not the case. The history of the
relationship between business and government is very different in the major Internet states (we may look at the
U.S., Germany and the U.K. as a sample). It is inevitable that the patterns of "self-regulation" will differ
accordingly. An international practice of self-regulation will emerge but it will be, first, an accumulation of
national and regional experiences. Each state has different social demands, constitutional structures, and
traditions of industry-government co-operation in the fields of media and speech. No account of the
emergence of self-regulation can be complete if it is insensitive to these critical distinctions in practice. The
expectation, function, structure and culture of self-regulation in the media is differs in Europe from the United
States as well as in Germany and the United Kingdom, to give just two examples. One study of self-regulation
and self-generation of standards (Canada and United States) demonstrates marked differences in the scope of
co-operation with the government, shared standards, and the notion of self-regulation as a social and
collaborative act.
24
In the United States, partly because of the First Amendment tradition, self-regulation is
distinctively a form of avoidance of, confrontation with, and studied separation from government. However, a
comparative overview of self-regulation systems in all EU Member States within the media identified clear
differences in meaning and structure of the self-regulatory systems within the individual EU Member States
and in a comparative overview of these systems.
25
Analytically, self-regulation means different things in different contexts because of the objectives of its
use in a particular society. Self-regulation can be directed at: (i) policy making, i.e. enunciating principles that
should govern enterprises, (ii) legislation, i.e., defining appropriate rules; (iii) enforcement, i.e., initiating actions
against violators; and (iv) adjudication, i.e., deciding whether violation has taken place and imposing an
appropriate sanction. The point here is to determine, in each particular version of the exercise of regulation,
how the roles are divided between the state and industry.
26
For example, an industry may be responsible for
the definition of standards for content (through developing a code of practice) but may leave enforcement up to
the government. Industry may put its mark on official state legislation with effective lobbying and use state
power to obtain results unattainable through private agreement. Self-regulation often means a division
between types of behaviour the state prohibits (incitements to violence, for example) and other kinds of speech
behaviour the industry defines, labels, and polices (indecent conduct). Similarly, the state and self-regulating
entity may divide enforcement responsibilities with the state prosecuting certain types of speech and the self-
regulating entity self-policing and removing other types of speech.
27
As a consequence of these differences in history and context, the assertion of self-regulation as a part
of the media restructuring process itself has different roles to play. Self-regulation can be a plea for more
effective cooperation, or it can be a means for avoiding regulation. Arguments for self-regulation in the media
may appeal to national differences or they may be part of an effort to harmonize practices across national
boundaries by surmounting national legislation. Self-regulation can mean, within Europe, different standards
enforced differently in France, or the United Kingdom, Germany, or Spain. Self-regulation could also mean
giving more substantial power to existing sub-groups in society, including religious groups, to set the standards
for programming that is to be watched or listened to or read by its members. However, self-regulation has
come to mean centralizing a standard setting within the corporations that produce and transmit program
content. Self-regulation then becomes a move to transcend sectarian differences—clusters of private or
historic self-regulation, and substitute secular, uniform transnational patterns. Self-regulation, particularly with
respect to the Internet, means substituting administration of standards by large transnational corporations that
have a stake in harmonizing and unifying standards across national boundaries.
28
Most explicit discussion of self-regulation in media restructuring has taken place in western and
developed societies. Both there and in developing societies, self-regulation supplements law itself. In these
societies, where self-regulation with respect to the press has become almost a tradition, a number of questions
can be asked: Should self-regulatory efforts be measured by their nominal functions (for example, reducing
the amount of indecent programming, however that is defined, or preventing overcommercialization), or is the
test of effectiveness whether the goal of limiting political action leading to harsher public law is reached. A
version of this same approach would ask whether, as a result of self-regulation, the consumer demand for
legislative or administrative action is reduced. Self-regulation of the media becomes a kind of dance among
the press, government and the public, sensitive to swings in opinion, sensitive, as well to perceived
consequences of the conduct to be regulated (such as violence on television), sensitive to the responsiveness
by the public to political grandstanding. Self-regulatory actions also reflect, though it is important to consider
the limitations on this claim, a deeper, less opportunistic attitude by industry leaders that they function in a way
that serves society and does not damage it.
Self-regulation may be an important alternative when there is an effective public demand for
regulation, but government, for constitutional or bureaucratic purposes, cannot adequately satisfy that
demand.
29
In the Internet context, as was true for other media before it, self-regulation is used to control
content where free speech norms makes government regulation subject to question. Self-regulation of press
practices, in fact, frequently exists for this reason, as do self-regulatory approaches to standards of
programming for minors.
In the very sensitive content issues involving the media, and given aspects of the democratic
process, at times, the only explicit media law enactable is either unconstitutional, in the largest sense, or
too restrictive. The United States Congress put forth much effort to pass its so-called Internet Decency
Laws, efforts that have so far proved unsuccessful.
30
Industry may agree to such principles to obtain
specific benefits from the government leading to a mutually negotiated understanding. Such a
framework for norm formulation and articulation might require standards and practices that would be
unconstitutional if engaged in by the state. The self-regulatory approach allows the standards to be
presented and enforced across the industry, even if the same standards would not be permissible in the
hands of the state. In some settings, a strategy for the industry is to stand by as an unconstitutional law
is being enacted, but only if there is a fair chance that the law will be struck down. Self-regulation is
another choice where the circumstances are such that the democratic process and the pandering of
politicians foretell an inappropriate legislative outcome. Law becomes an unattractive alternative, at
least the formal, express legal project. As a result, the task of norm-development is converted into an
informal negotiation between government and industry, with the legislature or the executive posturing for
public acclaim and the industry engaging in sufficient self-regulation to avoid a harsher explicit legislative
fate.
31
Self-regulation may be chosen where the media organizations to be regulated have enough power
themselves to resist regulation, but only if they produce a substitute for regulation that will be publicly
acceptable. With respect to the Internet, self-regulation may be deemed an acceptable and preferable
alternative because it is premature to choose the form of regulation that would be hardened into law. Here,
especially, there is social demand for some form of control or supervision of what seems, inherently, to be
beyond governance. This significant gulf between community aspiration and the perceived limits on
government capacity forces each entity to conduct a thorough and almost painstaking search for a remedy. To
resolve this dilemma, people are looking to the innovation of regulatory design.
Another condition for negotiated self-regulation occurs where a government is too paralysed actually
to pass legislation, but has enough force to ensure a self-regulatory implementation of elements of a
government legislative program. This has been true of India, for example, as the coalition governments in the
late 1990’s struggled to define broadcast reform legislation, but were unable to gain a majority in the Lokh
Saba. As part of an ongoing process of discussion between the cable television industry and the government
of the day, certain parts of legislation, including programming and advertising standards, became, sometimes
informally, a self-regulatory concern, at least for the foreign multinational channel providers.
Self regulation and transition
These have been the issues in the more developed societies, the main forum for self-regulation as
classically conceived. We have seen, however, that the doctrine is beginning to be invoked, increasingly, in
transitional and developing societies. And, of course, the broader the definition of self-regulation, the more
universal the concept becomes. For example, there are many states in which the absence of law or the
institutions of law leads to self-help and co-operative (or forced co-operative) efforts among competitors in the
field. These are self-regulatory bodies that operate not to prevent law, but as a substitute for law. In the early
days of any new media technology, when the government had not been brought into the picture, this form of
self-regulation was ubiquitous. In many countries, early cable television growth was characterized by chaos,
followed by consolidation, followed by control. Self-regulation, of a sort, was frequently the lubricant between
chaos and consolidation and then, when state power could assist or formalize self-defined relationships,
legislation was invoked.
In this sense, self-regulation has a critical role to play in all societies, and with this particular
definition, even more so in states where the rule of law is absent. During the late 1990s, there was an effort to
draft a law concerning the concentration of ownership of the media in Russia. The draft was conceived at a
time of extraordinary patterns of ownership. Russia, it was said, had a group of seven business oligarchs, each
of whom controlled a banking and business empire and each of which added broadcasting and the press to his
armory as a means to exert influence and protect his existing turf.
32
There was an informal balance of power
among the oligarchs. Rules undoubtedly grew among them about such things as poaching on the other,
market divisions, role in political campaigns, the shape of the advertising profession (including who would
control sales and reap revenues). Unlike pusillanimous self-regulatory entities in developed societies, there
was no limit to the means such an industry used to enforce these rules, including murder, inducing the state tax
authorities to undertake discriminatory audits and similar techniques. Only in limited conditions can a law be
implemented that contradicts or tries to undo the self-regulatory pattern of such industry organization.
It is rare that a society can counteract custom of this kind, unless it is, amassed considerable authority
and force, or unless an outside force, such as an army of occupation, is in charge. In the absence of these
extraordinary forces, it is doubtful a media law, like the proposed Russian draft on media ownership, can be the
product of external models. If law is enacted that varies widely from the codes that mark self-regulatory or
associational efforts, it will be cosmetic or possibly prophetic and aspirational, but not of a kind that can be
implemented or enforced.
In addition to the domestic circumstances that favor or demand self-regulation, there will be an
increase in urging self-regulation articulated as necessary because of the lack of globalized limits on the
efficacy of national legislation. From the perspective of the industry, the benefits of “soft law” to state imposed
regulation is usually obvious and the benefits of cross-border standardization compared to a multiplicity of
standards increases the strength of such an approach. A broad convergence of Internet Service Providers, of
content providers and of governments under the auspices of the Bertelsmann Foundation, can be explained in
terms of the efficiency of a substantial international self-regulatory infrastructure, which may serve as an
alternative to piecemeal national legislation. The question then is how comprehensive such a self-regulatory
infrastructure must be if one of its purposes is to stand as a significant alternative to legislation. A
complementary issue is what domestic legislation is required to ensure the emergence and protection of such a
trans-national self-regulatory structure, and how “soft” it must be to remain appealing to the industry.
Self Regulation and Globalism
Self-regulation becomes the default position wherever there is a problem and a wish to take the
position that government regulation is either unwise or impossible. Self-regulation often arises because of the
problem of too many governments and too little coordination. As a result, self-regulation may serve as the
answer to gambling on the Internet, as well as the answer to content potentially harmful to children.
Self-regulation may be an incorrect term for a use where there is either no regulation, or when private
regulation affects so many third parties that the use of the term “self” in self-regulation is inappropriate. Self-
regulation becomes a handmaiden of free speech arguments as well as those dealing with the maintenance of
a market free of government controls. Self-regulation has the seeming benefit of avoiding state intervention in
areas that are sensitive in terms of basic rights such as freedom of speech and information while offering social
responsibility, accountability and user protection from offensive material. But private censorship can be more
coercive and sweeping than its public form. And the dangers of constitutional violation are particularly striking
where the self-regulatory entity is acting in response to government or as a means of pre-empting its
intervention. As some have argued, self-regulation by media companies almost always involves the regulation
by those companies and of the activities of others (viewers, producers), not necessarily the regulation alone of
the transmission of programming. Self-regulation in the media is argued for especially in a global environment
where there are transnational conflicts inherent in the existence of many receiving societies.
Democratic Deficit and Accountability
In the use of the concept of self-regulation in the global debate, there is an emphasis on its professed
advantages of self-regulation over governmental regulation (efficiency, increased flexibility, increased
incentives for compliance, reduced cost, and minimised government intrusion in the speech field) and
inadequate attention to risks and limitations.
33
One general criticism of self-regulation has special meaning as
applied to the media. The “democratic deficit” or “corporatist character”
34
of self-regulation in comparison with
state regulatory activities can be seen as an important cost. The shift—within self-regulatory
arrangements—of traditional public task fulfilment from specific and democratically legitimate regulatory
institutions into a sector that consists primarily of private associations occurs at the expense of democracy and
accountability. The acquisition of power by groups that are not accountable to the body politic through the
conventional constitutional channels may constitute an abuse. As John Braitwaithe put it: “Self-regulation is
frequently an attempt to deceive the public into believing in the responsibility of an irresponsible industry.
Sometimes it is a strategy to give the government an excuse for not doing its job.”
35
It is clear that legitimacy plays an important role within the debate about government versus self-
regulation. Part of the discussion is linked to the responsibility of mediating institutions to ensure
transparency, accountability and consultation with interested parties. These are in general not perceived by the
private sector as their primary objectives. Therefore, ensuring accountability when public interests are a
concern should be a major concern in the design of a self-regulatory regime.
Effective self-regulation requires active consumer and citizen participation at all stages of
development and implementation. Without user involvement, a self-regulatory mechanism will not accurately
reflect user needs and will not be effective in delivering the standards it promotes. It will fail to create
confidence.
It is also very likely, in the media sector, that self-regulatory institutions would not impose meaningful
sanctions on industry players. There is no reason to believe that media industry organizations would be more
zealous than other self-regulating entities. Self-regulatory standards are, according to critics, usually weak,
enforcement is ineffective and punishment is often secret and mild. If there is insufficient commitment to an
enforceable code, the power of state regulation to effectively sanction contravention may be preferable.
Finally, self-regulation can have an adverse impact on competition and market efficiency if the sector
concerned attempts to use self-regulation as a way of restricting competition by, for example, limiting entry,
driving up prices, or setting minimum standards of trading conduct that have little relevance to the needs of
consumers. As a response to these concerns within the media field, European Commissioner Oreja once
stated that “self-regulation should not be used by major dominant operators to define ‘rules of the game’ that
are best suited to their own interest to the detriment of small or more recent competitors.”
36”37
A final environment for self-regulation is where government deems collective private action necessary,
but limits its role to removing the threat that anti-competition laws will be invoked to prevent such action from
1.
Tamar Frankel, Foreword, Symposium: A Recipe for Effecting
Institutional Changes to Achieve Privatization, 13 B.U. Int'l
L.J. 295 (1995).
2.
Kathryn Hendley, The Spillover Effects of Privatization on Russian Legal Culture, 5
Transnat’l L. & Contemp. Probs. 39 (1995).
3.
See Symposium, Note 1.
4.
For an overview of privatization in the telecommunications markets of Poland, Hungary, and the
Czech Republic, see DANIEL J. RYAN, PRIVATIZATION AND COMPETITION IN
TELECOMMUNICATIONS—INTERNATIONAL DEVELOPMENTS (1997).
5.
See Mark Baker, Privatization in the Developing World: Panacea for the Economic Ills of the
Third World or Prescription Overused?, 18 N.Y.L. SCH. J. INT’L & COMP. L. 233, 234 (1999)
(“[P]rivatization has increasingly become a component of conditionality requirements attached to
institutional lending. . . . seventy percent of structural adjustment loans and forty percent of
sectoral adjustment loans made by the World Bank during the 1980s contained a privatization
taking place. This authorization of group action has occurred with respect to program standards in the United
States where television companies were thought to need immunity to discuss ways of providing better positive
programming for children.
38
This kind of question also arises when industry-wide standards are developed, as
for example, in the shift from analogue to digital broadcasting.
While structures of self-regulation vary across industries, its evolution on the Internet will share
important common structural elements with other histories. Our analysis echoes the work of J. J.
Boddewyn, whose classic study of self-regulation in the advertising industry found substantial support for
a set of clearly relevant hypotheses concerning the effectiveness of such bodies.
39
Boddewyn concluded
that the existence of an industry-wide decision-making system (such as a capstone trade association)
increases the probability of effective industry self-regulation.
40
Industry self-regulation is more effective
when it involves all interrelated levels. Just as a scheme that included only advertisers was
strengthened if it included distribution systems (such as television networks), a self-regulatory system for
the Internet would also be strengthened if it included a range of content providers as well as service
providers. Boddewyn also found that the development and effectiveness of an industry self-regulatory
system are enhanced by government threat and oversight. The corollary for an Internet context
involves, as an example, monitoring and pressure of bodies such as the European Commission or
national legislatures on the private sector to take productive action.
It was Boddewyn’s view that the strength and effectiveness of an industry self-regulatory system is a
function of its essentiality and non-substitutability.
41
In other words, self-regulation is most effective when, for
reasons of practicality, technology and ideology, there is a coherent preference for self-regulation to
government action. In addition, the existence and effectiveness of industry self-regulation is not measured by
formal rules alone, but also by cultural factors. The transnational character of self-regulation, the experience of
each state, and the relationship between government and business are examples of such potential influences.
Other “Boddewyn hypotheses” include the idea that industry self-regulation is more likely to occur in
situations where self policing can increase the overall demand for the industry’s product and many of the
participants. States that encourage self-regulation must convince the industry that effective implementation of
self-regulatory measures is beneficial in that it may enhance industry credibility among consumers and reduce
the threat of costly government regulation. Industry self-regulation is more likely in those situations where the
externally imposed costs from not undertaking such self-regulation would be greater than the cost of
undertaking such self-regulation. This conclusion recognizes the careful calibration that enters the decision to
model collective self-regulation. It also suggests that in a transnational sphere, the calibration of costs in one
national context may be different from that in another.
Finally, the threat of government regulation precipitates the creation and improvement of an industry-
wide self-regulatory system. For all of the criticism of “jawboning,” or other modes of implying government
intervention, the dialogue between government and industry is central to key structures of self-regulation. Also,
encouragement and support of industry self-regulation as an instrument of public policy is more likely when the
limits of government intervention have become apparent. This may be true from the outset in the area of
content regulation where free speech and similar concerns underscore the limited role for the state.
component.”)
6.
See generally, Post-Soviet Media Law and Policy Reader (forthcoming) (Price, Richt
7.
See, e.g., Donald W. Hawthorne and Monroe E. Price, Rewiring the First Amendment:
Meaning, Content and Public Broadcasting, 12 CARDOZO ARTS & ENT. L.J. 499 (1994);
Erick Howard, Debating PBS: Public Broadcasting and the Power to Exclude Political
Candidates from Televised Debates, 1995 U. CHI. LEGAL F. 435 1995); Howard A.
White, Fine Tuning the Federal Government’s Role in Public Broadcasting, 46 FED,
COMM. L.J., 491 (1994);
8.
Thomas Gibbons, Aspiring to Pluralism: The Constraints of Public Broadcasting
Values on the De-Regulation of British Media Ownership, 16 CARDOZO ARTS & ENT. L.J.
475 (1998).
9.
See Nikhil Sinha, Doordarshan, Public Service Broadcasting and the Impact of
Globalization: A Short History, 5 CARDOZO J. INT'L & COMP. L. 365 (1997).
10.
See id.
11.
John Poston, The Beginning of the End? Prague Post, September
1, 1999
12.
Monroe E. Price, ed. The V-Chip Debate : Content Filtering from Television to the Internet
(Lea's Communication Series) 1998.
13.
See Monroe E. Price, The Market for Loyalties: Electronic Media and the Global
Competition for Allegiances, 104 YALE L.J. 667 (1994).
14.
See Common Responsibility in the 1990s: The Stockholm Initiative on Global
Security and Governance 35-42 (1991). See Julie Mertus, “From Legal Transplants to
Transformative Justice: Human Rights and the Promise of Transnational Civil Society,”
14 Am. U. Int'l L. Rev. 1335, 1351 (1999).
15.
James N. Rosenau, Governance, Order and Change in World Politics, in
Governance Without Government: Order and Change in World Politics 1, 4 (James N.
Rosenau & Ernst-Otto Czempiel eds., 1992).
16.
Julie Mertus, “From Legal Transplants to Transformative Justice: Human Rights and
the Promise of Transnational Civil Society,” 14 Am. U. Int'l L. Rev. 1335, 1352 (1999);
Patricia Armstrong, Human Rights and Multilateral Development Banks: Governance
Concerns in Decision Making, 88 Am. Soc'y Int'l L. Proc. 271, 280 (1994) (citing World
Bank, Governance: The World Bank's Experience 1 (Operations Policy Department,
Final Draft) (Nov. 23, 1993)); see William Chia, Quality of Government Outweighs
Political System: Prof. Koh, Bus. Times, Apr. 29, 1993, at 2; Bill Maurer, Cyberspatial
Sovereignties: Offshore Finance, Digital Cash, and the Limits of Liberalism, 5 Ind. J.
Global Legal Stud. 493, 497 (1998).
17.
The Global Business Dialogue on e-commerce (GBDe) is an example of an
institution that focuses on self-regulation in the e-commerce context. GBDe is a
company led effort to strengthen and coordinate international cooperation. It works to
establish and empower a number of working groups to address a variety of e-
commerce issues, facilitate outreach within the business community and assess the
actions and responses of business, government, and non-governmental organizations.
The GBDe works to identify and offer solutions and guidance on regulation or business
self-regulatory codes of conduct in conjunction with governments, administrations, and
international governmental organizations. See <http://www.gbd.org>.
18.
The Internet Corporation for Assigned Names and Numbers (ICANN) is an
organization that addresses issues of domain name management. ICANN is a non-
profit corporation that was formed to assume responsibility for IP address space
allocation, protocol parameter assignment, domain name system management, and
root server system management functions now performed under U.S. Government
contract by IANA and other entities. http://www.icann.com.
19.
The history of ICANN indicates how something that seems to have had an
autonomous genesis may actually have started with government encouragement. In the
United Kingdom, concern for Internet content has not yet led to specific legislation or
licensing controls. However, with pressure from the Home Office, this concern over
content led to the establishment of the Internet Watch Foundation in 1996. The
industry’s proposals were developed in discussions with the Home Office and the
police in the shadow of the threat of more intrusive legislation and of criminal
prosecution. See The Internet Watch Foundation <http://www.internetwatch.org.uk>.
20.
The Organization for Economic Cooperation and Development (OECD), for example,
is an organization that focuses on regulatory issues in the e-commerce context and
works with governments to beget the most effective policy proposals. The OECD
groups 29 member countries in an organization that provides governments a setting in
which to discuss, develop and perfect economic and social policy. They compare
experiences, seek answers to common problems and work to coordinate domestic and
international policies in today’s increasingly globalized world.
21.
Joseph Rees, somewhat idiosyncratically, likens the general regulatory system in his
landmark book
Reforming the Workplace, to the proverbial iceberg: the tip being government regulation,
while the massive body represents society's great array of private regulatory systems
Rees, Joseph V. Reforming the workplace : a study of self-regulation in occupational
safety. Philadelphia : University of Pennsylvania Press, 1988: 6).
22.
Sinclair 1997: 529
23.
24.
(McDowell/Maitland 1998), in Price, ed. The V-Chip Debate : Content Filtering from Television to
the Internet (Lea's Communication Series) 1998).
25.
Ukrow
26.
Campbell 1999
27.
Several major service and content providers, such as AOL and MSN, have
developed explicit guidelines and user protection guarantees, particularly for minors,
often labelled “Netiquette,” in order to establish and maintain confidence among their
users. Industry corporations are also working with public interest groups such as the
Internet Education Foundation, http://www.neted.org, and America Links Up,
http://www.americalinksup.org, to further consumer choice in content selection
alternatives.
28.
AOL, for example, has established a hotline and “notice and takedown procedure”
and works in cooperation with England’s Internet Watch Foundation.
29.
U.S. courts recently granted a preliminary injunction against the enforcement of the
Child Online Protection Act (Reno v. ACLU, 31 F.Supp. 2d 472 (1999)).
30.
Reno v. ACLU, 117 S. Ct. 2329 (1997).
31.
In Australia, The Internet Code of Practise was created in 1999 by the Internet
Industry Association, a trade body covering different sectors of the Internet industry, as
a product of the enactment of the Broadcasting Services Amendment (Online Services)
Act 1999. The industry became much more proactive in self-regulation when the Online
Services Bill was going through the legislature in an attempt to cushion the potential
impact of the legislation, which many in the industry considered “heavy-handed” (Fair,
1999: 13).
32.
Said “it is said” needs footnote
33.
Indeed, Robert Pitofsky, Chairman of the U.S. Federal Trade Commission has
suggested that self-regulation at times can be more “prompt, flexible, and effective than
government regulation,” and that “the judgment and experience of an industry also is of
great benefit, especially in cases where the government has difficulty defining ‘bright
line rules.’ Online content is clearly such a case” (Pitofsky 1998).
34.
Schmitter 1985
35.
Braithwaite 1993: 91
36.
However the opposite has also been claimed. One of the main reasons why self regulation
was introduced in the financial services in Britain was not only that it would lead to
higherstandards of business conduct, but that it was thought less likely than government
regulation to inhibit innovation and international competitiveness (Rees/Cunningham 1997).
37.
Oreja 1999; Page 1987.
38.
Children's Television Act of 1990, 47 U.S.C. 303a, 303b (1994);
Newton Minow & Craig L. Lamay, Abandoned in the Wasteland: Children, Television,
and the First Amendment (1995);
39.
See Jean J. Boddewyn, Advertising Self Regulation and Outside Participation. New
York: Quorum Books, 1988: 52; Jean J. Boddewyn, Global Perspectives on
Advertising Self-Regulation (1992)
40.
Boddewyn 1988: 30-33
41.
Boddewyn, 1988: 330-351
| 课件名称： | 新闻传播教案合集（英文版） |
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