On June 29, the deputies passed a bill that would require Czech Television (ČTV) to drop virtually all commercial broadcasting by 2008, except for small spots during sport and cultural broadcasts. To make up for the lost income, ČTV would increase monthly service fees paid by households from the current 75 Kč ($3) to 135 Kč.

The bill must still be approved by the Senate, then ratified by President Václav Klaus. Though the senior opposition Civic Democratic Party controls the Senate, analysts still predict a strong possibility that the bill will become law.

The planned removal of ČTV from the advertising market would also expand the advertising pool for TV Nova and Prima TV, as well as increase their negotiating power with advertisers.

Revenue from television advertising reaches up to 9 billion Kč per year. TV Nova and Prima TV control the vast majority of the market.

In 2004, TV Nova received 5.3 billion Kč from commercials, while Prima TV took in 1.7 billion Kč and ČTV collected 1.3 billion Kč.

If the government cuts ČTV off from advertising income, the two commercial stations — TV Nova in particular — would take virtually unlimited control over advertising prices. Though ČTV commanded only about 14 percent of the advertising market, it stood as a price regulator among stations and advertisers, according to Martin Nováček, account manager for marketing agency OMD.

Nováček warned that the mighty TV Nova could soon seize unbeatable authority over the market.

"So far, ČTV and Prima TV stood as a barrier against TV Nova's effort to gain control over the advertising market," Nováček said. But after the recent Chamber of Deputies vote, "TV Nova could soon control over three-quarters of the advertising market."

Nováček said OMD has already notified clients that advertising prices could rise by some 20 percent as a result of Parliament's actions. And an unnamed manager of an international drugstore told Hospodářské noviny that advertisers looked bleakly at the prospect of falling under the dictates of the two commercial television stations.

"There is no way we can avoid TV advertising or TV Nova, and we need to accept virtually any price they ask for," she said.

TV Nova demonstrated its aggressive marketing approach earlier this year when it tried to lure advertisers away from rival Prima TV. TV Nova then offered discounts to advertisers who stopped buying airtime on Prima TV.

As a result, Prima TV lost tens of millions of crowns in revenue, according to Prima TV Director Martin Dvořák.

"We have paid insufficient attention to the business policy of our rival, which started to motivate clients to stop advertising on Prima," he said. "Unfortunately, some of the clients have done so."

Though ČTV's disappearance from the advertising market would further boost TV Nova's commercial opportunities, the nation's biggest television station is not the only one that would benefit from the new legislation, according to TV Nova General Manager Petr Dvořák.

"New TV stations that will enter the market with the launch of digital TV broadcasting will get their share, too," he said.

Despite the government's original plans, the process of issuing digital licenses has been halted by political controversies. The Radio and Television Broadcasting Council could not issue digital licenses to bidders in June because Parliament failed to pass a new broadcasting bill that would set rules for allocating licenses. Parliament members expect to tackle the bill again in September.

Pre-election gift

Political maneuvering also apparently played a role in approval of the ČTV bill. In fact, all parties involved — except households and advertisers — are expected to profit if the new legislation becomes law.

While households would pay more for the ČTV signal, ČTV would likely collect more through increased fees than through commercials. At the same time, TV Nova and Prima TV would hold stronger positions with advertisers.

Parliament has considered this move repeatedly during the past three years, but it was only through Prime Minister Jiří Paroubek's intervention that the new bill received enough support among deputies.

"Paroubek pushed it through to avoid controversies with the TV stations before the [general] elections" next summer, according to Culture Minister Pavel Dostál, who had lobbied instead for a mere reduction in ČTV's advertising share, along with a smaller increase in the fees for households.

The deputy of the ruling Social Democratic Party, Ladislav Skopal, who presented the bill in Parliament, acknowledged that political interest played a role in pushing the bill toward approval.

"It wouldn't be good if there was nervousness on the media market before the elections," Skopal said.

Freedom Union deputy Táňa Fischerová, however, openly criticized the proposed removal of ČTV from the advertising market as a gift to commercial stations.