Draft Government Regulation on Private Broadcasting has recently been submitted to the State Secretariat (“Regulation”). The Regulation which contains 66 Articles has been drafted to further facilitates the implementation of  Articles 17(2), 18(3) and (4), 31(4), 32(2), 33(8), and 55(3) of Law No. 32 of 2002 on Broadcasting (the “Broadcasting Law”).

Private broadcasting institution is being defined as a commercial institution which transmit its signals for free reception. The institution must be in the form of an Indonesian legal entity which only operates in broadcasting of either television or radio.

Request for licenses must be submitted to the minister through the Indonesian Broadcasting Commission (“KPI”) in written by filling out a specific form available at KPI. The KPI will then examine the submitted form and its attachment and if it deems appropriate, recommend the allocation of specific frequency to the minister of transportation.

Prior to obtaining a permanent license, private broadcasting institution must undergo a 6-month probation for radio stations and a 1 year probation for television stations. Commercial clips and any levies toward broadcasting program are forbidden during this period. All permanent licenses will remain valid for 5 years (radio stations) and 10 years (television stations). Revocation of license is possible if the institution fails to perform a broadcast in three consecutive months, transfer its license to a third party, violated KPI broadcasting standards or violated its own technical broadcasting plan (presumably, with regard to frequency allocation).

Change of name, domicile, management, articles of association or location of the transmitter must be informed to the KPI.

The Regulation imposed a minimum threshold for local content. It obliges broadcasting institutions to air local content at least 60% from its program, each day.  The main language used for broadcasting must be in Bahasa Indonesia. Relays are possible but limited to certain threshold. For television station, it is limited to 40% and for radio station it is limited to 90% each day. Correction for errors in broadcasting must be aired within 24 hours. Program archives must be kept for at least one year after it is aired.

It is interesting to note that cigarette commercial can only be between after 21:30-05.00 local time. The regulation also set maximum daily commercial time, as much as 20% of overall broadcasting time.  At least 10% of all commercial time each day must be used for public commercial.

During the establishment, its Initial capital must be fully owned by Indonesian citizen/legal entity. Capital addition is only permitted for at maximum 20% from the initial capital. 80% of total shares of the institution must be owned by Indonesian citizen and/or legal entity. The 20% additional capital can be derived from either direct investment or stock market. Every transfer of shares involving 5% or more of overall capital must be reported to the minister. Of all total revenue, at least 3% must be distributed to the institution’s employees. The Regulation also governs limitation of ownership and cross ownership.

The Government imposed an IDR 100 million-1 billion fine for breach of its provision, in addition to administrative sanctions. (mma)