The impact of regulation on the development of digital convergence

The case of Clarín and the role of telecommunications service providers

Abstract

This article analyzes how Cablevisión (Clarín Group) has performed in the last decade, both under the communication policies introduced by the Cristina Kirchner government (2007-2015) and, later on, following the swearing-in of current president Mauricio Macri (2015) and the changes made during his tenure to the development of digital convergence, particularly the provision of audiovisual services. With this article, we seek to answer two questions: how did the Audiovisual Communication Services Law (LSCA) affect the structure of Clarín Group’s —and, specifically, Cablevisión’s— revenues and number of subscribers? And how have the Necessity and Urgency Decree 267 and the Executive Order 1340/17 accelerated the spread of digital convergence? Our contribution is to demonstrate, through an analysis of Clarín’s financial statements, that, despite the fact that the LSCA sought to restrain the concentration of media ownership, the group maintained its dominant market presence between 2010 and 2015 and even made further strides in its most lucrative business, cable and internet, which partly explains its interest in splitting up. (There was a first attempt in this direction, following a Supreme Court ruling, in order to adapt to the requirements of the law. Later, after the passing of the Necessity and Urgency Decree, there was yet another and definitive attempt.) Mauricio Macri’s decrees and executive orders immediately stimulated movement in the market, allowing acquisitions and alliances that had not yet been authorized by the previous government. This weakened the legal framework in place and allowed a favorable context for business, which reveals a view of convergence that centers on the market, technical efficiency, and competition.