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CONDITIONS FOR DISTRIBUTION OF INFORMATION

Distribution is the third and final step in the movement of information. A saying popular among German print media distributors reads as follows: "Sales aren't everything, but without them, you have nothing." Analysis of regional conditions taking into consideration the eight factors mentioned above revealed that, in fifty regions, companies involved in print media distribution have not been granted any of the seven possible benefits (applying to lease of state-owned non-residential buildings, lease of land, municipal taxation, contracts, sales tax, etc.).

The laws in force in the Republic of Karelia are a typical example. There, print media distributors are not granted the following:

  • special benefits for lease of state-owned non-residential buildings
  • exemption from payment for a permit to open newsstands
  • preferential land lease coefficients
  • the status of municipal contractors
  • exemption from utilities payments
  • special contract benefits.
Above all, the sales tax rate runs as high as five percent.

At present, the same conditions for information distribution can be found in the legislation of nearly half of Russia's regions, including those often dubbed "advanced" from a market point of view, such as Samara, Yaroslavl, Vladimir, Omsk, Kemerovo, Perm, Rostov, Saratov and Penza regions.

The other half is at least trying to put a spoonful of sugar in the medicine. For instance, in the Adygei Republic, Krasnoyarsk and Stavropol Territories, Arkhangelsk, Volgograd, Voronezh, Lipetsk, Murmansk, Nizhny Novgorod, Ryazan, Tver, Tambov and Chelyabinsk Regions, Khanty-Mansisk and Yamalo-Nenets Autonomous Districts and a number of other territories, mass media distributors have been exempted from sales tax. Administrations of certain regions grant media organizations concessions for leasing non-residential buildings (Krasnodar Territory, Leningrad and Tomsk Regions, St. Petersburg and Taimyr Autonomous District), exempt them from the fee for the right to conduct trade (Kaliningrad Region) and provide them with a preferential land lease coefficient (Vologda, Kaluga and Sverdlovsk Regions).

The Public Examination Committee had good reason to consider the provision or denial of various benefits and exemptions to press distributors as one of the basic criteria for evaluation of press circulation conditions. Although they are ordinary market players, and sometimes even market favorites since they actually sell the end product, press distributors usually need support. But under the current conditions in Russia, where in the majority of regions there are only one or two functioning distribution networks (by comparison, eighteen networks are active in Moscow), publishers are almost defenseless against the press distribution monopolies. Hence, alternative distribution networks would benefit both the consumer and the publisher.

But alas, they would not benefit the state. Experience points to the fact that local administrations use distribution monopolies to put pressure on publishers, who are nearly totally dependant on sales. The solution is simple: if control of such an effective lever of press control is to be wrested from the hands of local authorities, it is necessary that independent and stable newsstand networks replace street vendors. However, their establishment depends on the ability of currently very weak provincial distributors to create extensive local networks and set up stable businesses with the aid of certain concessions and tax exemptions.

At the same time, one can easily find evidence that such concessions and exemptions will not be appearing in most regions any time soon. It would be naive to assume that the authorities will render any assistance to the establishment of alternative distribution networks that would deprive them of one of their levers of control over the press. The finding of the Public Examination committee read as follows: the overwhelming majority of regional administrations flatly reject the very idea of giving any help to the press distribution business.

The greatest number of benefits and privileges granted to distributors was recorded in Moscow. In addition to six main concessions (distributors are exempt from payment for the permit to set up newsstands, are granted preferential land lease rates, are granted the same rights as municipal contractors, and are granted special terms for rental of state-owned non-residential buildings, utilities payments and contract fees), they pay a reduced rate on the residential and public building maintenance tax. Mass media distributors in Moscow are also exempt from sales tax.

The Moscow Region ranks second after the city. Local distributors have been granted certain exemptions from municipal and sales taxes, as well as preferential rental rates for non-residential space.

The researchers also collected information on the number of bureaucratic levels that must be negotiated in various regions to set up a newsstand. The city of Omsk, the capital of Southern Siberia, broke all records. A local businessman has to go through 34 stages to get a permit. The Russian capital has 29. This high level of bureaucracy is compensated for by an unprecedented number of concessions and benefits. Nowadays, Moscow is the area with the most favorable conditions for distribution (see map).

As concerns the finalized Map of Freedom of Speech, as mentioned earlier, it ended up two-, rather than three-colored. And this was not the only revelation made throughout the course of the research.

If one looks at the map, one finds that, previously, some of the unfavorable regions had sometimes appeared conflict-free and vice versa. As it turns out, the political orientation of local authorities is not always directly reflected in their mass media policy. This was another sensational conclusion reached by the Public Examination Committee.

 
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