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UNCLAS QUITO 000108 
 
SENSITIVE, SIPDIS 
 
E.O. 12958: N/A 
TAGS: PHUM PGOV KPAO EC
SUBJECT: COMMERCIAL MEDIA IN ECUADOR WORRIED ABOUT THE PRESIDENT AND 
THE NEW CONSTITUTION 
 
REFTEL: 08 QUITO 616 
 
1.(SBU) SUMMARY: Since President Rafael Correa came to office in 
2007 he has criticized the Ecuadorian commercial media as 
"incompetent," and complained that the majority of media outlets 
were protective of the business interests of their owners and not 
representative of the interests of Ecuadorian citizens.  In 2008, 
the government took management and editorial control of two national 
TV stations owned by the Isaias family. Over the past year the 
government has launched three "public" media outlets that in theory 
report on the citizens' business, but in practice mainly report 
favorably on government actions.  The new constitution includes a 
number of provisions that make commercial media outlets vulnerable 
to government pressure.  Taken together, President Correa's actions 
and the provisions of the new constitution present a serious 
challenge to Ecuadorian media and freedom of the press. 
Nevertheless the main private media outlets continue to report on 
and criticize the Correa government, while the public remains 
largely on the sidelines of this battle over government restrictions 
on press freedom in Ecuador.  End Summary 
 
CORREA COMES OUT SWINGING 
 
2.(SBU) In his public statements and weekly radio addresses, 
President Correa has been attacking media outlet owners and 
criticizing the press and journalists for most of his time in 
office.  For example, he recently threatened to stop placing 
government advertising in the daily newspaper El Universo and in his 
2009 state of the union address asked, " How is it possible that the 
largest newspaper in the country (El Universo) is owned by three 
persons with fake businesses in the Cayman Islands, and that one of 
Ecuador's TV stations (Teleamazonas) has reported seven years of 
losses?"  Media analysts have also criticized the Government's use 
of a law allowing it to broadcast short programs on two or more 
private TV stations  to interrupt the popular "Contacto Directo" 
morning news program on TV Ecuavisa.  The Government spots defended 
the Housing Minister against criticisms by Contacto Directo anchor 
Carlos Vera, a constant critic of Correa.  Many journalists 
criticized the action as a transparent attack on one journalist 
critical of the government. 
 
¶3.  (SBU) Over the past two years and three national elections, 
Correa has attacked established elites in all fields, including the 
media, to neutralize his potential critics.  While his attacks have 
not stopped media outlets and individual journalists from 
criticizing him, they might have helped pave the way for a host of 
anti-media provisions in the constitution.  Also, some newsroom 
editors admit they have softened their coverage of his 
administration.  After Correa said this month in Cuba that, "I'm 
ready to fight the 80 percent of the Ecuadorian press that are 
private companies and defend private interests and those of 
political partisans," one top newspaper editor observed in his 
column, "(Correa) remains convinced that the private media is 
pernicious to society and must be limited." 
 
ISAIAS CASE - ASSET RECOVERY OR MEDIA TAMPERING? 
 
¶4. (SBU) In July 2008, the Ecuadorian government's Deposit Guaranty 
Agency (Agencia de Garantia de Depositos - AGD) began to seize 
companies and properties of brothers William and Roberto Isaias, a 
move which garnered wide public approval.   The GOE declared that 
its objective was to sell the assets to pay back depositors who lost 
money when the Isaias-owned Filanbanco went bankrupt in 1998, 
leaving a $661 million loss.  The AGD seized two broadcast TV 
stations owned by the Isaias Group, Gamavision (since renamed 
GamaTV) and TC Television, whose viewership figures tie them for the 
number two spot among Ecuador's seven broadcast TV stations, and two 
small cable TV channels.  These channels are now owned and run by 
AGD, which is supposedly determining their value with an eye to 
selling them by April 2009.  After taking managerial and editorial 
control of the TV stations in November, the AGD-installed general 
managers claimed they would not tamper with the stations' editorial 
content, but eventually cancelled a number of programs which 
included political commentary that sometimes was critical of 
President Correa or his administration. 
 
"PUBLIC" MEDIA OUTLETS - WORKING FOR THE PUBLIC, OR IN FAVOR OF THE 
GOVERNMENT? 
 
¶5. (SBU) Since coming to office, the Correa government has created 
three government-funded media outlets: the El Telegrafo daily 
newspaper; radio station Radio Publica de Ecuador; and TV station 
Ecuador TV (ECTV).  The editor of El Telegrafo said that the vision 
for the newspaper is to follow the BBC model, which is to say it 
will neither publish state propaganda nor function like a commercial 
media outlet earning a profit, and the president's communication 
secretary said the three government media outlets are "at the 
service of the people and the nation, but not the government." 
 
However, the focus of reporting for these public media outlets 
appears to be on the government's activities and its political 
agenda.  For instance, ECTV broadcasts all presidential 
announcements and his Saturday addresses to the nation and was the 
only media outlet to travel with the President on his January 2009 
trip to Cuba.  When Radio Ecuador was launched weeks before the vote 
to approve Ecuador's new constitution, its first interview was a 
one-hour talk with President Correa and much of its subsequent 
programming focused on the government's campaign in favor of the new 
constitution. 
 
NEW CONSTITUTIONAL PROVISIONS - WILL COMMERCIAL MEDIA SURVIVE?  WILL 
FREEDOM OF THE PRESS ENDURE? 
 
¶6. (SBU) Ecuador's new constitution reflects President Correa's 
promise to implement "Socialism of the 21st Century" by creating a 
"system of social communication," among other provisions.  It 
contains a host of articles aimed at regulating the commercial 
media, overseeing news content, and giving the government ownership 
control of commercial media outlets. The ultimate effect that the 
Constitution will have on the media and freedom of the press remains 
unclear, as many provisions have not yet been implemented through 
accompanying laws, but media observers point out that the government 
will have powerful tools at its disposal to make fundamental changes 
to how media companies do business and how they report the news. 
They fear the Correa administration, in keeping with its attacks on 
the commercial media over the past two years, will use these tools 
to restrict the free circulation of ideas and punish its critics in 
the commercial media.  During the Constituent Assembly's debate on 
media provisions, assembly member Pedro de la Cruz of the 
government's Proud and Sovereign Fatherland (PAIS) movement, said, 
"The government should share in media company profits to 
redistribute wealth," while PAIS member Pilar Nunez said, "We are 
asking (media companies)for verified information that is not 
speculation." 
 
Future Government Role in Commercial Media Ownership and Oversight 
 
 ¶7. (SBU) Transitory Article 24 of the constitution stipulates that 
the executive branch will appoint a commission to conduct an audit 
of all TV and radio frequency licenses.  Some wonder whether this 
commission will conduct a witch hunt against outlets that criticize 
the government and cancel their licenses.  This would free up 
licenses to award to new "community media" stations since the 
constitution says the government will guarantee licenses for and 
assist in the creation of community stations (Article 16).  However, 
85 percent of licenses are in private hands, only three percent 
belong to community stations, and some cities have no available 
frequencies.  The presidential decree creating the commission 
specifically states that it is to identify any monopolies or 
oligopolies using the licenses.   In his 2009 state of the union 
address, Correa said, "Alternative media outlets will have to be 
created." 
 
¶8. (SBU) Article 312 states that financial businesses are prohibited 
from controlling or investing in media outlets, while Transitory 
Article 29 states that financial company stock holders must sell any 
current ownership positions in media outlets by October 2011. 
Recently Correa has claimed that TV station Teleamazonas, owned by 
banker Fidel Egas and home to news anchor Jorge Ortiz, a frequent 
Correa critic, is evading taxes.  Egas' spokesman has said that he 
will abide by the constitution and divest from Teleamazonas.  In 
2007 Ecuador had four large independent commercial TV stations. 
Today, two of those are owned by the government, and the third will 
have to be sold at a time when the country is facing an economic 
downturn and the constitution bars foreigners from owning a majority 
share of media outlets.  This leads commentators to wonder if any 
Ecuadorian investors will come forward to purchase these three 
stations and continue their tradition of independent newscasts. 
 
¶9. (SBU) Article 313 states that the government reserves the right 
to administer, regulate, control and manage strategic sectors, 
including the TV-radio spectrum.  Article 315 states that the 
government will create public companies to manage strategic sectors, 
while Article 316 spells out that the government can allow mixed 
public-private companies to participate in strategic sectors, or in 
exceptional cases allow private-sector companies to do this. 
Article 408 states that non-renewable natural resources, including 
the TV-radio spectrum, are the inalienable property of the 
government and that the government will share in the benefits of 
using these resources in an amount not less than the companies that 
exploit them.  Considering that commercial TV and radio stations 
receive licenses giving them the right to use the TV-radio spectrum 
in their business operations, these articles raise the possibility 
that the government will seek to manage TV and radio outlets and 
share in the earnings of their operations. 
 
¶10. (SBU) Article 384 stipulates that the law will define the 
 
organization, functioning and forms of citizen participation in the 
"system of social communication," which will assure the rights of 
communication, information and freedom of expression, and strengthen 
citizen participation.  The system will be composed of public 
institutions, and private, citizen and community actors who 
voluntarily join it, and the government will formulate a public 
communication policy.  A published news story reports that Cuban 
communications professor Jose Ignacio Lopez Vigil helped put this 
article into the constitution in the last days of the constituent 
assembly.  Analysts are unsure how the government will use this 
system to set communication policy and influence the news reporting 
of private media outlets. 
 
Will the Government Control the News? 
¶11. (SBU) Article 18 states that all citizens have the right to 
receive true and verified information without prior censorship. 
Article 19 states that the law will regulate the content of the news 
media's programming.  Transitory Article 1 spells out that the 
National Legislative Assembly, within 360 days of the new 
constitution coming into force, will write a communications law. 
Legal experts predict that the communications law will define the 
form and function of the "system of social communication," and will 
empower the Council of Citizen Participation and Social Control to 
establish mechanisms to enforce the constitutional provisions 
governing the media and freedom of press described in Articles 
16-20.  In this case, the members of this council would have the 
ability to interpret the broad language of these articles (in 
particular Articles 18-19) and the authority to choose what 
enforcement actions to take against private media outlets that they 
determine violated those articles.  Some media professionals have 
expressed worry that this council, which has been dubbed the "fifth 
branch of government," could abuse its authority by selectively 
bringing enforcement action against private media outlets thus 
leading to intimidation and/or censorship of the press. 
 
¶12. (SBU)  In the first example of how the government plans to use 
these articles to regulate the commercial media, on January 28 the 
National Radio and TV Council (CONARTEL) responded to complaints 
against programs broadcast by TV Ecuavisa and Teleamazonas by 
decreeing that TV and radio stations which use polls or opinion 
surveys in their broadcasts must "eliminate statements that attack a 
person's honor, dignity and good name."  Referring to the language 
of Article 18, CONARTEL's decree states that stations must avoid 
making "statements about facts and cases that are untrue or 
unverified and cannot be subsequently verified by the citizens."  In 
response, one columnist wrote that this is part of a well thought 
out plan by the government to limit free speech guided by the idea 
that citizen power must regulate the press. 
 
¶13. (SBU) COMMENT:  President Correa's two-year campaign of 
criticism against Ecuador's "mediocre" press corps and "so-called 
free press" has helped him discredit the media as an opposition 
force.  With some justification, he has painted it as aligned with 
the country's political and business elite and therefore an obstacle 
to the change agenda of his citizen's revolution.  While the private 
media has shown solidarity in defending themselves against the 
attacks and continues to report and comment critically on Correa and 
his government, some have admitted to a degree of self-censorship 
and most are wary of how the constitutional provisions described 
above could affect their newsrooms and businesses.  They also wonder 
whether Correa's verbal attacks might escalate into concrete actions 
such as tax investigations, which have already begun in the case of 
Teleamazonas.  With Correa's popularity rating around 70 percent two 
years into his term, they might be calculating that now is not the 
time to take him on.  It appears the public is willing for the time 
being to allow Correa to continue attacking the media, at least 
while the existing commercial media outlets still function more or 
less independently.  However, it remains to be seen how the public 
would react if the president's attacks and the constitutional 
changes lead to a situation like in Venezuela, where few independent 
media outlets remain, or if the system of social communication 
promised in the new constitution proves to be nothing more than a 
government-run press. 
 
HODGES