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Some provisions of a law allowing the government-sponsored Korea Broadcasting Advertising Corp. and its affiliates a monopoly over advertising sales on terrestrial television and radio stations are incompatible with the Constitution, the Constitutional Court said in a ruling handed down on November 27. While the court said the law infringes on the freedom of occupation as the reason behind the ruling, media experts expressed concerns that the ruling may result in the collapse of minor broadcasting firms and could also reinforce commercialism in the broadcasting industry.

The court said, “Limiting the sale of broadcasting airtime to KOBABO and KOBABO-funded companies without a clear standard infringes on the freedom of occupation of private advertising agencies.”

To introduce a practically competitive system in the airtime sales market while guaranteeing the broadcasting industry produce programs for the public good, the court recommended that the government grant licenses to private advertising agencies, give a quota of ads to small- and medium-sized broadcasting firms and set a threshold for ad prices.

In its ruling against Provision 5, Article 73, and other provisions of the Broadcasting Law, the court said that by allowing only KOBACO and its affiliates to sell ads without seeking other ways to ensure that the broadcasting industry produces programming in the public interest, “the current law violates the principle of least infringement against basic rights.”

The court said that if it were to make the law ineffective by ruling it unconstitutional now, the market would become chaotic due to current regulations on the sale of airtime on terrestrial (television and radio). The government “should revise the law by December 31 next year,” the court said.

Six of the nine justices ruled the law was incompatible with the Constitution, two ruled it unconstitutional and one ruled that it was partly unconstitutional.

The ruling has outraged smaller regional and religious broadcasters, who denounced it for “letting all small mediums die.” Lee Young-hoon, the co-chairman of the Association of Regional Broadcasters, said, “I’m disappointed because the Constitutional Court, in a careless decision, overturned the social consensus on the KOBACO system, which has been maintained for the past 27 years. Regional broadcasters will become like dandelions in the face of a typhoon.”

Since its establishment in 1981, KOBACO has monopolized the advertising sales market for television and radio networks. While it is generally acknowledged as fact that KOBACO’s monopoly has undermined competition within the advertising industry, many experts agree that the KOBACO system serves to ensure the public interest in South Korea by allocating ads to smaller broadcasters and curbing the amount of influence advertisers have over broadcasters.

When KOBACO loses its monopoly, as it will when the law is revised at the end of next year, competition for survival in the broadcasting ad market is sure to intensify. Without KOBACO, which has thus far served to regulate the industry, big broadcasters are likely to win more ad, while small ones will get less.

Chae Su-hyeon, the head of the policy team at the National Union of Media Workers, said that, sooner or later, only big companies will survive because they will get more ads, and small companies will disappear as they are pushed out of the market.

Some experts say the fierce competition for ads will incite broadcasters to produce more commercial programming. Kim Min-gi, a professor of media and public relations at Soongsil University, said, “The revision of the law following the Constitutional Court’s ruling will force the media to brace for a more capitalist system.”

The Constitutional Court ruling is likely to help the Korea Communications Commission to establish a private media lab to compete with KOBACO at the end of 2009, the date by which the Broadcasting Law must be revised.

Please direct questions or comments to [englishhani@hani.co.kr]