A month after the Hungarian government partially lifted its four-year ban on private broadcasting, the Budapest city council in recent days opened the door wider to deregulation of Hungary’s media industry by creating a $ 1.14 million communications center.

According to its charter, this new municipal body, called the Capital Media Center, will work to establish TV and radio broadcasting networks for the greater Budapest area, which, with 2 million residents, is considered the largest and most important media market in the country.

In doing so, this center offers the most tangible opportunity to date for eventual U.S. and Western European participation in the Hungarian media market. The CMC is a potential investment catalyst for two reasons.

Clearing the way

First, since the center was established by the Budapest city council, controlled by political parties now in opposition in Hungary’s federal parliament, the CMC is viewed as a challenge to the party that controls Hungarian state TV and radio — currently the only outlets with legal authority to broadcast on a national level in the country.

By weakening this monopoly, it is thought that the new media center could act as a bulldozer to clear the way for expansion of Hungary’s media sector.

Secondly, the CMC, because it is controlled by Hungary’s opposition parties, is thought to be philosophically more open to joint-venture deals with the West than Hungary’s ruling conservative coalition.

But despite its potential, the future of the center is still uncertain.

It is not yet known how the CMC, which is 99% owned by the city and 1% owned by a local foundation called Urban Television for Budapest, will be able to operate without a national media law, or a complete end to Hungary’s private broadcasting ban — two obstacles to growth that Hungary’s gridlocked parliament may not be able to resolve for another year.

Other questions remain. The government’s decision last month to lift partially its broadcasting ban for municipal and region markets only means that CMC ventures, catering only to the Budapest audience, are now eligible for transmission licenses. But will the government grant licenses to its political foes? And will a snubbed broadcaster have any legal recourse if the government rejects its application?

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