BRAGARD advises on open television rights

BRAGARD advised various Cable TV Service providers of the Montevideo metropolitan area, in the conflict maintained against the company Equital in relation to the rights of the open television channels, 4, 10 and 12 of the city of Montevideo.

The Media Act, Nº 19.307, established the obligation of cable companies to transmit signals from air channels which have a similar area of coverage to its. It also established that this obligation does not imply any payment from one party to the other. It is worth clarifying that this situation occurred in fact for more than 20 years.

The air channels of Montevideo, 4, 10 and 12, filed an action challenging the constitutionality of the Media Law, claiming among other things the declaration of unconstitutionality of the provision that establishes this compulsory license.

The Supreme Court of Justice declared the unconstitutionality of the above mentioned provision because it understood that violates Article 32 of the Constitution, since it does not provide the payment of a fair and prior compensation in favor of the air channels that see their property right limited.

Based on this declaration of unconstitutionality, Equital S.A., the company that has acquired distribution rights of channels 4, 10 and 12, pretend to charge a price to the cable operators that are in the same area of coverage of said channels and therefore are forced to transmit these signals, contrary to a practice that is more than 20 years old.

The declaration of unconstitutionality of the article that imposed the gratuity was a great challenge to face by the defense of the cable companies. As cable companies are obligated to transmit air channels, if they were allowed to charge a price, it could lead to a situation of abuse, as it actually happened.

In December 2017, Equital S.A. initiated several precautionary measures against different cable companies which operate in the Montevideo metropolitan area, by which the cable operators were instructed by a judicial ruling to stop transmitting the air signals of Montevideo. This was a serious issue for the cable companies, not only because the quality of the product that they offer, but also because as they must transmit these channels, complying with the sentence meant breaking the law. Dr. Juan Orticochea of Bragard Law Firm advises and represents a large part of the defendant cable companies.

Already in 2018, Equital S.A. had filed a lawsuit claiming damages and a condemnation that prohibit transmission the air channels of Montevideo against several of our clients.

To date, we have achieved the reverse of a large part of the judicial decisions and the precautionary measures have been lifted. We have also answered Equital’s claim. Although the case is still ongoing, we trust that the decision will be favorable to the interests of the cable companies, based on a series of arguments such as there is no civil liability of the cable companies, as well as the manifest illegitimacy of the prohibition pretension of Equital S.A., as our clients are expressly required to transmit these channels.