Colombia. The new formula for the payment of compensation is being prepared, for which the National Television Authority made available the preliminary document for the modification of the Regime of Consideration of the Subscription Television Service, so that all interested citizens can make the respective comments and observations.
Those interested may send their observations, proposals and information that they consider relevant by email [email protected] or physically, to Calle 72 No. 12-77, in the city of Bogotá.
In the study carried out by the National University and contracted by the ANTV: "DOCUMENT OF INTEGRAL DIAGNOSIS OF THE CURRENT STATE OF THE PUBLIC SERVICE OF TELEVISION IN COLOMBIA (OPEN AND CLOSED) AND OF ITS PROJECTIONS", it is proposed that the methodology used should allow to promote sustainable, profitable and efficient investment by private agents interested in participating in the Subscription Television market within the framework of healthy competition.
In addition, to link the payments, which the operators must make to the State for the right to participate and compete in said market, with the investment structure and the efficient AOM (Administration, Operation and Maintenance) costs of the commercial activity, that is, that is in accordance with the conditions of the subscription television sector.
In this sense, the National University has proposed to the ANTV, consider the "Discounted Cash Flows" approach, more precisely the FCL free cash flow approach, in order to estimate the value of the concession and compensation for the provision of the subscription television service.
The proposed approach has the particularity that it is standard in investment banking to determine the market value of an asset, and is the standard methodology in the sector. This approach is based on the idea that the market value of the asset is a function of the future cash flows it will generate, discounting them to present value at a discount rate that recognizes the systematic risk of the business.
It should be noted that the recommended methodology is standard in financial practice and investment banking, has theoretical and academic support and has been used in numerous investment banking transactions, as indicated by the National University.
The proposed methodology then consists of:
1. Estimate the expected future free cash flows that are expected to be generated for dealers
2. Estimate the appropriate opportunity cost to be used to discount future free cash flows
3. Based on the above, establish the price to be paid for the new concession(s), and/or extensions, as well as the compensation scheme for the operation of the service, such that the Net Present Value of the free cash flows, generated by said concessions and discounted with the opportunity cost, is equal to zero.
This will ensure that the concession (or the person making the extension) obtains a fair market return and equal to the estimated opportunity cost for the business given the level of perceived risk.
In this way, the central element of the project will be to estimate a concession and compensation value compatible with obtaining the expected fair market return given the investment (Capex), administration, operation and maintenance (Opex) and Risk (beta) of the Subscription Television business. Thus, the determining element of the value to be paid will be the elements of the business such as the structure of income, investments, costs and expenses of the business, with the aim of promoting a remuneration (fair profitability) that promotes competition and the growth of the sector. View source (http://www.antv.gov.co/index.php/normativa/documentos/send/1082-documentos/1867-documento-de-diagnostico-integral-del-estado-actual-del-servicio-publico-de-la-television-en-colombia-abierta-y-cerrada-y-de-sus-proyecciones)
On the other hand, the Ministry of ICT, with the purpose of opening a space for consultation and giving the opportunity to all interested sectors, to contribute their comments and proposals related to the public policy of TV and Audiovisual Content, on December 20 the Ministry of ICT published on its website, two documents called "Compilation of the Rapporteurships of the five Technical Tables of Television and Digital Audiovisual Content" and "Conclusions of the Externado de Colombia University, based on the aforementioned Rapporteurships"
During the initially planned period, which was set until January 20 of this year, valuable comments were received, as well as several requests to extend the consultation period. In order to respond to these requests, guaranteeing the opportunity for intervention and participation of anyone who is interested in doing so, I inform that the Ministry will continue to receive their contributions until next February 10, through the email [email protected].
For this purpose, the following is the link where the aforementioned documents are published(http://micrositios.mintic.gov.co/mesas_politica_publica_tv_contenidos_audiovisuales)
This construction of the new Public Policy of TV and Audiovisual-Digital Contents will be built from the discussions in the technical tables of participation and work on topics or subjects that must be subject to adjustments, modification or definition for the construction of the guidelines that will allow to consolidate the policy in the field of Television.
In the debates held in the Technical Tables, the financing of the Television Sector and digital audiovisual content was foreseen as one of the relevant topics, highlighting the Contribution and Compensation, among other topics.
"With regard to the financing of public television and the model to be adopted for the payment of contributions and compensation in the different types of television services and audiovisual content, the participants in the Technical Tables presented countless divergent proposals according to their vision of the industry and the service that each one provides, seeing as a meeting point that public television provided by State institutions must exist and be maintained, regardless of its size, conformation and the type of financing adopted for it, to guarantee the pluralism of information and the democratic system of the country, the offer of multiplatform public content, the cultural identity of the nation and its regions and the sustainability over time of the operation of national public channels and Regional. Similarly, proposals were presented so that the resources from the different types of contributions and compensations that are charged to the providers of the television service and digital audiovisual content are extended to agents that intervene in some way in the market and that today do not pay them. "
These are separate from the aforementioned documents that I invite you to consult and make the observations you deem pertinent and thus make use of your right to participate in these new public policies.
Text written by Luis Pinto, advisor of TVyVideo+Radio.
