The Constitutional Chamber of the Supreme Court of El Salvador heard an action challenging the constitutionality of ten articles of the Telecommunications Act, which regulate the procedures for obtaining broadcast licenses for a portion of the radio frequency spectrum. The Court declared two articles to be unconstitutional: those which established the nature of the right of exploitation derived from the licenses, and those which provided for the automatic renewal of the licenses for consecutive twenty-year periods. Furthermore, the Court declared the law to be unconstitutional on the ground of omission, because it did not establish alternatives to monetary auctions for allocating and awarding broadcast licenses for regulated portions of the radio frequency spectrum. Finally, the Court issued the judgment in such a way that it would only affect the granting of licenses in the future and would not impact licenses which had already been awarded in accordance with the articles declared unconstitutional.

The Constitutional Chamber of the Supreme Court heard an action challenging the constitutionality of Articles 15, 81, 82, 83, 84, 85, 100, 115, 118, and provisional Article 126 of the Telecommunications Act. Article 15 defined the nature of the right of exploitation derived from the licenses, while Articles 81 to 85 set forth the characteristics of the public auction for the aforementioned licenses and the procedures for conducting it. Article 100 and Articles 115, 118, and 126 provided that “[t]hese licenses shall be granted for a period of twenty years, automatically renewable for equal periods.”

In the opinion of the plaintiffs, the law imposed exceptionally demanding and discriminatory requirements for access to a portion of the radio spectrum. In particular, they stated that the establishment of a monetary auction as the sole mechanism for awarding portions of the radio spectrum meant that only those with sufficient financial resources could obtain access to radio media outlets. In the view of the plaintiffs, the auction mandates equal treatment “for persons entitled to freedom of expression whose economic situations are unequal”. [p. 3] and favors economically powerful persons and groups. They argued that discrimination in access to the media violated the universal right to freedom of expression, and that the lack of mechanisms allowing different social groups access to radio frequencies restricted the right of the entire society to receive diverse information.

According to the applicants, the automatic renewals provided for in Article 110 violated freedom of expression because the law lacked mechanisms to avoid media ownership concentration and monopolistic practices in the use and exploitation of the radio spectrum. They also considered that Article 115, Paragraph 2 and Article 126, paragraph 2 violated the constitution by not providing an explicit limit to the renewals. In their opinion, “the indefinite allocation of licenses established in the contested articles prevents democratizing access to the radio spectrum, blocks access to the media for large segments of the population, and is contrary to a pluralistic media.” [p. 6].

According to the plaintiffs, Article 118 “establishes [a] minimum separation between adjacent channels of 30 kHz in amplitude modulation (hereinafter AM) and 400 kHz in frequency modulation (hereinafter FM). Such separation is excessive, artificial, and represents an inefficient and irrational use of the radio spectrum, because it fills the capacity of the FM band without any justification or technical studies, which violates freedom of expression by indirect means or methods.”

The plaintiffs argued that the Telecommunications Act as a whole was unconstitutional on the ground of partial omission, since it failed to establish “guarantees protecting freedom of expression, by not establishing sufficient regulations to prevent and eliminate monopolies and monopolistic practices through limits on the number of radio spectrum licenses awarded to an individual or legal entity.” [p. 11].

The action requested, as a precautionary measure, “that the application of the challenged articles be suspended.” [p. 9]. The Court granted the requested precautionary measures and temporarily suspended the application of the aforementioned articles.

The Court declared unconstitutional the automatic extension set forth in Articles 115 and 126 and declared the law to be unconstitutional due to omission, given that the law did not establish alternatives to auctions for allocating and awarding broadcast licenses for portions of the radio frequency spectrum. The remaining contested articles were declared constitutional. In addition, the Court decided to issue the judgment in such a way that it would only have effects in the future and would not affect licenses which had already been awarded in accordance with the overturned rules.

The Court had to decide three legal problems. First, it had to decide whether establishing auctions as the only mechanism for obtaining access to a radio frequency is contrary to freedom of expression and equality. Second, it had to decide whether the automatic renewals of licenses to exploit the radio spectrum violated freedom of expression and democratic pluralism. Finally, it had to determine whether the right to freedom of expression was violated by establishing of a broad separation between radio channels so as to limit the possible number of licenses.

First, the Court found that awarding frequencies through the mechanism of an auction fulfills the three conditions required for the process to be legitimate: free concurrence, equality among the bidders, and transparency. According to the Court, not only does the procedure not infringe equality, but it tends to ensure that use of the radio spectrum be allocated to “those who will maximize its value, which in addition to guaranteeing more revenue for the State, would ensure an efficient use of the radio spectrum.” [p. 37].

However, the Court found that although the contested articles pursued constitutionally legitimate purposes and complied with the principles of free competition, equality, and transparency, they did not fulfill the requirements of the principle of proportionality and contravened the right to equality. This is because in the absence of other, alternative criteria for allocating the radio spectrum, the right to create media outlets was conditioned on the bidder’s economic capacity.

In this regard, the Court noted that the standard did not appear to violate the principle of equality, since it did not establish conditions or characteristics differentiating participants in the process. However, when the articles were applied and the auction was carried out, it was impossible to prevent the media from being concentrated in the hands of a few, which violated both legal and political pluralism and the principle of democracy. In this regard, the Court did not specifically declare the unconstitutionality of Articles 81 to 85, but it did declare the entire law to be unconstitutional on the ground of omission, because it failed to include other procedures or criteria to award the use of the radio spectrum. Consequently, “the Legislative Assembly shall issue amendments to the Telecommunications Act containing alternative mechanisms to public auctions, which take into account other relevant quantitative and qualitative criteria for awarding licenses for these services.” [p. 60].

On the other hand, the Court stated that automatic renewal (Articles 115 and 126) could lead to license renewals without any State oversight of the conditions under which the service is provided. This, argued the Court, constituted a mechanism that restricted both free competition and “the access of other segments of society to the radio spectrum, hindering pluralism and thus the emergence of new forms of democratic discussion.” [p. 47]. By virtue of all the above, the Court held automatic renewal to be unconstitutional.

Finally, with respect to the challenge against Article 118, the Court explained that the spacing or separation between channels established by the article was reasonable in accordance with common standards and, therefore, did not entail a violation of freedom of expression.

The Court issued the judgment in such a way that it would only be applicable to the granting of future licenses, and that licenses which had already been awarded would not be affected. [p. 58].