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Argentina pols mull investment cap

Bill would require reciprocity investment agreements

BUENOS AIRES — Argentina’s Senate media committee on Tuesday began mulling tighter restrictions on foreign investment in the broadcasting and cable markets.

Approved by the lower house of Congress on Nov. 10, a new bill would allow only companies from countries that signed reciprocity investment agreements with Argentina in the 1990s to own shares in media companies. The U.S., Brazil and Spain are among those that signed such agreements.

The legislation would drastically reduce current investment limits, which allow any international investor to own up to 30% of radio and TV broadcasters, publishers, TV production companies and Internet service providers.

Supporters argue that greater restrictions would keep content decisions in the hands of Argentinians, protecting the local programming market from losing airtime to foreign shows.

Currently, 80%-90% of broadcast TV fare is homegrown as a weak peso has put imported films and series out of reach.

Opponents argue that limits would keep away the capital for programming and technology to introduce digital transmission.

Local media investment has been at a standstill since the country’s 2001-02 economic crisis slashed ad revenue and subs and tightened access to affordable credit.

Exceptions to the 30% cap and new restrictions would be investors already in control of local media companies or those that already have signed agreements to buy stakes of more than 30%. These exceptions enabled Spain’s Prisa to buy two local radio broadcasters for $10.5 million from Spain’s Telefonica last week; it secured five radio licenses in 2001, before the caps took effect.

Telefonica and U.S. entities Hicks, Muse, Tate & Furst, Liberty Media and Walt Disney are expected to retain the large holdings in cable operators, film studios, radio stations and TV broadcasters they acquired in the 1990s.

The bill will allow churches, public service cooperatives and other nonprofit groups to secure licenses for broadcast and cable services.

It would enable the nation’s 5,000-plus cooperatives, which provide electricity, telephony and other services, to compete in smaller markets accounting for 10% of the nation’s 4 million subscribers.

This prospect has raised concern in the cable sector, dominated by Argentina’s Grupo Clarin and Cablevision, owned by Hicks, Muse and Liberty. Cablers say cooperatives have an unfair advantage because they are exempt from income taxes.

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