Explainer: Israeli Broadcast Regulation Reforms

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Minister of Communications Shlomo Karhi has proposed reforms to Israel's broadcast system. The components of the reforms, alongside the context in which they are being proposed, make clear that their objective is a politicization and government control of regulatory bodies.

Photo by Avshalom Sassoni/Flash90

Minister of Communications Shlomo Karhi has proposed reforms to Israel's broadcast system that would transfer authority for regulating, licensing, and collecting viewer data to a new, Ministry-appointed, politicized authority. Though Minister Karhi and proponents of the reforms claim the proposals seek to advance competition, the components of the reforms, alongside the context in which they are being proposed, make clear that their objective is a politicization and government control of regulatory bodies.


The Israeli news broadcast market is very small. In fact, it is the equivalent of a medium sized city in the US. Unlike English language news outlets, Israeli news, which is broadcast in Hebrew, cannot be imported or exported to expand the audience base. Reliance on income from advertising is limited, and much of this income has already migrated toward digital platforms over the past decade.

This places a lot of strain on commercial broadcast and multi-channel television companies and exposes them to political influence either through quid pro quo relations with politicians or by seeking out funding sources that may impact the quality and objectivity of the news broadcast.


Reforms are Necessary

Minister of Communications Shomo Karhi’s proposed reforms did not crop up in a void. There is a broad consensus that reforms are indeed necessary, but in such a small market, any reform will have drastic effects on all parties involved and therefore these should be carefully considered.

What kind of reforms would improve the system? One example is the merging of two regulatory bodies that divide regulation of multi-channel television and broadcast television to improve efficiency. In addition, international streamers such as Netflix, Disney+ and the like should be required to comply with the same production requirements as local networks. Currently, Israeli networks are required to spend around 80 million NIS a year on local productions. International streamers control a large portion of the Israeli market but are not required to invest in local productions. This places Israeli networks at a disadvantage.

In 2022, two months before the elections, former Communications Minister, Yoaz Hendel, issued a memorandum, in which he outlined a series of reforms. Although unacknowledged, this memorandum was used as a blueprint for the new proposals by the current Communications Minister, Shlomo Karhi. Three-quarters of Minister Karhi’s reform is a verbatim appropriation of Hendel’s memorandum. The select changes provide insight into the motivations behind the reform and indicate an overriding attempt to undercut the independence of all broadcast and streaming services and politicize the regulatory bodies.


Transferring the Regulatory Body to the Ministry of Communications

A key part of the reforms proposed by Minister Karhi is the establishment of a new regulator within the Ministry of Communications that would regulate all broadcast and streaming services. All personnel within this authority would be appointed by Ministry officials. His system of appointments would make this new authority the most highly politicized regulatory body in recent decades.

While a new authority was mentioned in Hendel’s original memorandum, the nature of the authority is transformed into Minister Karhi’s version of the reform. For example, Hendel’s memorandum specifies that the authority would be “free of any political influence,” while in Minister Karhi’s version this sentence is replaced with the ambiguous phrasing: “the authority will be independent in the fulfillment of its duties.”


Licensing and Oversight of the News

In Israel today, broadcasters require two licenses. First, they need a general license to broadcast any programing, then they need an additional license to air news programming. In fact, any broadcast company that wants to air news programs must create a separate and independent corporation for this purpose. All news broadcasters have a legally mandated budget and can use this budget independently. This system exists to distance corporate and political influence from the news reporting and to ensure objectivity and quality. Minister Karhi wants to eliminate the second news broadcasting license and reduce regulation, assuming that this reduction would increase competition. He claims that increasing competition will allow the public to “vote with their remote” and choose which news provider to watch, regardless of quality, professionalism, or reliability of the broadcaster. In fact, one of the sections redacted from Hendel’s original memorandum is one that cites “quality, fairness and balance” as one of the objectives of the reform.

Competition is, indeed, positive when it is coupled with quality. The problem with Minister Karhi’s proposal, however, is that as he is dismantling the existing licensing system while simultaneously establishing a new system that will require any body that wishes to broadcast the news to register with his new politically led authority. Under the new system it will be impossible to broadcast any news without registering first at the Ministry’s authority.

In short, Minister Karhi’s reform is a double-edged sword. On the one hand he focuses solely on competition at the expense of quality, by eliminating existing regulations, and at the same time he is installing his own politicized regulatory body and implementing what amounts to an alternative licensing track that would require the approval of Ministry officials.

If his sole objective were truly competition, this would incur a legitimate debate. In many places in the world, competition is, in fact, a system used to enhance quality. However, the size of the Israeli news market complicates matters and when considered alongside other aspects of the reform, it becomes clear that political control, not competition, is the end goal.


The Ratings and Data System

Karhi’s proposal politicizes what are currently professional bodies and will enable the government to obtain and process personal information on all Israeli residents and use this subject to their own consideration.

The measurement of ratings and market insights are key aspects of the regulatory structure. Today, ratings in Israel are measured using an independent, professional body made up of both advertisers and broadcasting networks, which is a common model globally. Even so, the current methods used to measure ratings are outdated and require reform.

Minister Karhi’s reforms propose to transfer the ratings measurement to the new authority controlled by the Ministry of Communications, enabling the authority to demand real-time data on viewers from all broadcast and streaming companies, including OTT (internet) ones.

This means that the Ministry of Communications will have data on the viewing habits of all Israeli residents, information that could be used as political leverage against private citizens. For example, if John Doe watches his news on Channel 14, the Ministry of Communications will know this, and will use this to identify his political affiliation.


Do We Need a Government Ministry to Regulate Competition?

Israel already has an anti-trust authority whose role it is to maintain competition. If competition is truly Minister Karhi's goal, the Ministry of Communications need not be involved. What he is really doing is transforming professional oversight and regulation into political oversight and control.

Minister Karhi’s proposals also need to be viewed in a broader context. This is happening as Prime Minister Netanyahu faces charges of corruption that relate to misuse of an Israeli media outlet for personal gain, and it is directly related to previous legislative attempts to take control and politicize the public broadcasting authority. It is clear that the government's interest is in controlling the public information and collecting viewer data for political purposes, all under the veil of “increased competition.”