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. Last Updated: 07/27/2016

President Approves VGTRK Overhaul

President Vladimir Putin on Monday signed a decree ordering that the All-Russian State Television and Radio Co. be split into two parts, one in charge of programming and the other in charge of transmission for both state and private broadcasters.

The decree calls for the creation of a state-owned non-stock company called Russian Television and Radio Broadcasting Network, or RTRS, to handle transmission. RTRS will incorporate the Ostankino television broadcasting center, the relay communications lines previously controlled by the Communications Ministry, and about 100 regional transmission centers with 15,000 transmitters and satellite uplink stations around the country. Aside from some of the ministry's relay lines, the other assets were part of the All-Russian State Television and Radio Co., or VGTRK.

VGTRK is the conglomerate of state-owned media that is the parent company of RTR and other state television and radio channels.

Press Ministry spokesman Yury Akinshin said Monday that RTRS will report to the Press Ministry.

The Press Ministry and VGTRK have long warned that without hundreds of millions of dollars in investment, the current transmission system will collapse within a few years. Press Minister Mikhail Lesin said in December that $350 million to $400 million was needed to replace outdated equipment.

Lesin also said that the transmission system would be turned into a joint stock company that could be privatized.

"After long and careful thought, they came to the conclusion that plans to attract investment by turning the transmission network into a joint-stock company were wishful thinking and such a company would be doomed," Akinshin said in a telephone interview.

"The main point of the decree is to preserve the network," he added. "The question of investment will have to be solved at a later date."

According to the decree signed Monday, the 2002 federal budget must include subsidies to RTRS for delivering national television and radio broadcasts to towns of less than 200,000 people.

Akinshin said those subsidies would amount to $35 million to $40 million.

The decree, which gives the Cabinet three months to draw up RTRS's charter, also aims to bring back under government control all the parts of the transmission system that have slipped out of its grasp.

Although transmission facilities are barred from privatization, many regional transmission centers have set up private companies on the side by lending them equipment or licenses. The decree orders the government to carry out an "inventory" of its transmission facilities, to cancel the deals that "run counter to the law" and return the assets to RTRS.

"I would like to have a closer look at the documents and details of the reform," said Anna Kachkayeva, a professor at Moscow State University and television analyst with Radio Liberty. "But at the moment, it looks a little like nationalization. It means that all private broadcasters that have had contracts with the private transmission companies set up by regional state-owned transmission centers will have to renegotiate their contracts."