Publication: Monitor Volume: 7 Issue: 101

President Vladimir Putin has given partial support to a bill now being considered in the State Duma that would restrict foreign ownership in Russia’s media. After meeting yesterday with Duma faction leaders, Irina Khakamada, one of the leaders of the Union of Right-Wing Forces (SPS) faction, told the RIA state news agency that Putin supports the idea that foreigners should be allowed to hold no more than a 50-percent stake in any of Russia’s electronic media, but believes that there should be no restrictions on foreign ownership of print media (Russian agencies, May 23). Late last month, the Duma passed bill in the first reading that would require any media company registered in Russia–either print or electronic–to be less than 50-percent owned by foreign companies or citizens (see the Monitor, April 27). A Russian news website noted that by electronic media, Putin undoubtedly had in mind not only television and radio, but also the internet (KMnews.ru, May 23).

It is interesting to note that Putin’s comments on media ownership corresponded with a report that Rostelecom, the state-controlled national long-distance monopoly, and Svayzinvest, the state telecommunications holding company, will soon set up a national state-controlled internet company. Rostelecom, it should be noted, is 51-percent owned by Svayzinvest. Both Rostelecom and Svayzinvest will each reportedly own a 25-percent-plus-one-share stake in the new company, which will reportedly be set up on the basis of an existing Rostelecom affiliate, RTComm.ru. While Rostelecom has not to date been heavily involved in the internet business, an estimated 25 percent of all the data available to Russian users of the internet is already transmitted across the long-distance carrier’s lines. As the Gazeta.ru website noted yesterday, the new state-controlled internet company is likely work out cooperative arrangements with those regional internet service providers (ISPs) that already belong to Svayzinvest, which may put many private ISPs out of business. The creation of a state internet company can, it was suggested, be seen as part of an overall restructuring of the telecommunications market, which has also involved a nearly completed project to set up Svayzinvest affiliates in each of the seven federal districts that President Vladimir Putin decreed into being last year. Svayzinvest already owns controlling stakes in local communications companies throughout the country. “It seems,” Gazeta.ru noted, “that the time for large structures in one way or another affiliated with the state has now arrived for the freest sector of the market–telecommunications” (Gazeta.ru, May 23).

It is worth noting that Rostelecom’s acting general director, Sergei Kuznetsov, at one time had business links with Valery Yashin, Svayzinvest general director, and with Leonid Reiman, Minister of Communications. All three men–like Russia’s president–hail from St. Petersburg (Moscow Times, April 13).