Bill Guerin, Jakarta – Cash-strapped state-owned television station Televisi Republik Indonesia (TVRI) has 7,158 employees and 395 relay stations in 26 provinces. It reaches out to 81.5 percent of the country's total population, or more than 169 million people, but is being slowly but surely forced off the air.

TVRI needs at least Rp2 trillion (US$225 million) to rejuvenate its old equipment, including its 400 relay stations across the archipelago, but last week broadcasts were halted in the Medan, the provincial capital of Sumatra, after its remaining operational funds had been used up.

Medan is the latest casualty in a war of attrition that belies government claims that the national channel is to be given a new lease on life as a state-owned entity. TVRI broadcasting services at other Sumatran stations, Lampung, Bengkulu and Aceh, have been inactive for six months, as has the station in Central Kalimantan. TVRI Semarang in Central Java may stop transmissions this month if expenses cannot be covered, putting 375 jobs at risk.

TVRI was set up in 1962, primarily to broadcast the Asian Games held in Jakarta, and was run by a yayasan (foundation) controlled by the now-defunct Ministry of Information. For more than three decades TVRI was notorious for its monotonous programming and was looked down on as being the government's mouthpiece. This image cost it a great deal in terms of popularity and partly explains its uphill battle for viewers in areas where there is a choice.

The die seemed cast for TVRI and those 70 percent or so of its audience who live in rural areas, where private TV channels are difficult to pick up, when the government decided to convert TVRI from a social-service corporation to a public-service company.

The new status was granted through Presidential Decree No 36/2000. Under the decree, TVRI changed to a Perusahaan Jawatan (Perjan), a non-profit state company under the authority of the Ministry of Finance. Its employees thus became civil servants of the Finance Department assigned to TVRI.

Then another chameleon-like change took place last April with TVRI metamorphosing into a state limited-liability corporation (Persero). Government Regulation (PP) No 9/2002 changed the status of TVRI from a Perjan to a Perusahaan Terbatas or limited-liability company (thus no longer enjoying a government subsidy).

From then on TVRI was sidelined and to this day awaits the formal conversion to a corporation with operational procedures, corporate rules, a chain of command, and assured funding. The government last year allocated Rp157.87 billion to TVRI, including salaries for 5,635 of its employees, but for its broadcasting operations alone TVRI needs at least Rp894.25 billion a year, excluding equipment maintenance and replacement costs. It needs an estimated Rp1.2 trillion every year but earns no more than Rp235.21 billion.

In this year's state budget (APBN) no operational funds at all are allocated. Ministry of Finance director general for budgeting Anshari Ritonga excused this farce by saying he was not informed of the pending status change until January; this in spite of a letter from TVRI on December 2 to the finance minister and the minister for state-owned enterprises (SOEs) requesting operational funds of Rp157.873 billion from APBN-2003.

Salaries for this year will be paid, but little else. As the employees retain the status of civil servants, their pay is secured from an item "ex-Perjan employees of TVRI" already allotted in the 2003 budget.

TVRI has been allowed to air advertisements for some time now but it faces formidable competition from the existing private stations. Prior to this it was not permitted to air commercials but received 12.5 percent of gross advertising revenues of privately owned TV stations SCTV, Indosiar, Metro TV, ANteve, RCTI and TPI. Most of these simply did not pay, claiming hard times. In October 2001, TVRI terminated its accord with the errant stations, citing Rp200 billion in outstanding claims.

TVRI president Sumita Tobing, who took over the reins in June 2001, was appointed along with four executive directors, Sutrimo, Badaruddin Achmad, Ahmad Adiwijaya and Barita Effendi Siregar, all of whom she later suspended.

Sumita, 56, has done her best to drag the company into shape ready for a proper restructuring. Unfortunately, her style of management has made her more enemies than friends, with almost every single TVRI director calling for her removal.

Though she breathed life back into the station with new and popular programs, Sumita is permanently under fire for what her critics say is a "one-woman show" style of management. Almost daily infighting at the station has met her attempts to purge what she describes as a complacent "civil servant" mentality that leaves only 10 percent of its workforce productive.

Sumita started with TVRI in the late 1970s. She left in 1992 to work for ANteve and in the interim became the first Indonesian woman to achieve a doctoral degree in broadcasting, at Ohio University, aided by a scholarship from TVRI. In 1993 she was headhunted by SCTV. After building the Liputan 6 news service into a national leader, she left because of disputes with top management. Then she went to Metro TV, Indonesia's first 24-hour news channel, before leaving there because of internal disputes.

In her second coming to TVRI she has been accused of being involved in corruption, appointing a non-employee of TVRI to lead a project valued at Rp100 billion, and a host of other such sins.

The leading lady suspended marketing director Sutrimo, administration and finance director Badaruddin, and a couple of other directors after accusations by them that her grip of iron left them on the sidelines.

By last November the government's game plan had changed. During the protracted debate over the new Broadcasting Bill, legislators succeeded in ensuring that the bill allowed for TVRI, as a national asset, to remain under the government's control.

The "keep it public" lobby argued that change of ownership would transform the state television station into a purely profit-oriented enterprise and said the government should do everything to maintain TVRI as a state-owned entity to maintain its social mission.

Funding for this social mission was never debated. Last month Sumita sent out circulars advising all TVRI regional stations to tout for loans in order to cover operational costs.

The mid-1990s saw most of the action in media empire-building. The regionally based network system of the time allowed some television stations, ostensibly with limited licenses to operate only in certain regions, gradually win permission to transmit across the country after large investments, lobbying and deals with the Cendana (Suharto) clan. The Jakarta media barons who currently control what is screened to 220 million people are mostly still relatives and associates of former president Suharto.

Other stations came on to the scene and raced to build relay stations in a bid to grab as wide an audience as possible. RCTI set up no fewer than 47 stations, and other channels built tower after tower to beef up their relay stations, despite only having preliminary licenses.

Thus, a television station with only one broadcasting permit was able to transmit nationally. Those halcyon days are now over.

The House of Representatives (DPR) passed the new Broadcasting Law last November 28 and thereby in effect ended the stranglehold of the Jakarta-based conglomerates and media magnates on television screens across the nation. Officials admitted openly that the purpose of the Broadcasting Law is to democratize the airwaves by breaking up the oligopoly of the Jakarta-focused stations.

Under the new law, the 10 major private television channels in Jakarta will no longer be allowed to broadcast their programs nationally. If a television station in Jakarta, for example, wants to expand its coverage to Surabaya (East Java), it must set up a joint venture with a local Surabaya station, which will then relay or rebroadcast the Jakarta-based station's programs via its frequency.

Conversely, a station based in the provinces must find a counterpart in Jakarta willing to relay its programs if it wishes to reach viewers in the capital.

This is how Indonesian radio stations operate, some of which have a network of 200 relay stations nationwide, and who are obviously under no threat from the new regulations.

The law grants existing private television stations that are already broadcasting nationally a grace period of five years, before having to fall into line.

Under the new law, local provincial or regional administrations, or their city-owned companies, can also set up their own public television and radio stations using money appropriated from the local budget. The establishment of these public stations is subject to the approval of the local council.

Even though no formal permits have been issued by the central government, there are already about a dozen locally based stations on the air in various provinces around the country and some 35 new regional TV stations outside of Jakarta are set to begin operation, posing a further challenge to TVRI, which has so far dominated the airwaves in remote areas of Indonesia.

Initial fears that some regional governments would try to lay claim to the state broadcaster's assets within their jurisdictions have proved to be unfounded.

The idea is that, with regional autonomy and the allocation of broadcasting frequencies to local communities, the provinces will no longer have Jakarta's broadcasts and views pressed upon them.

The law also provides opportunities for foreigners to invest. However, non-Indonesians can only invest in a TV station once it has gone public, and even then are only permitted to own a maximum of 20 percent, hardly likely to entice the foreign media barons.

Aside from the ominous dangers posed by the restriction of foreign news coverage and handing back ultimate control of the airwaves to the state, the bill has clearly been designed with the new post-Suharto political realities in mind.

After all, the strategic importance of television can hardly be underestimated given that, with voters able to choose a president directly in next year's elections, the reach of the Jakarta-based stations and their impact on the 120 million voters can be very powerful.

It is against this backdrop that the government is playing brinkmanship with TVRI. Ownership of a private television station will confer substantial political and financial benefits, but being financed by the government means an increased chance of TVRI being controlled by its political masters.

Industry experts point out that there are only two choices for the government – either privatize TVRI or liquidate it. Sumita is all for privatizing the station, saying lack of professionalism of its personnel as well as poor efficiency have helped hasten its imminent demise.

She blames the mounting debts on years of poor and non-transparent management as well as corruption and "civil servant mentality". She says TVRI will never be able to improve its professionalism as long as civil servants run it and that once it becomes a limited-liability company, it will be rid of bureaucracy.

Gearing up for privatization would mean a purge of all the rent seekers and corrupt management and lead to a massive retrenchment program among its employees. The government is unlikely to risk yet another privatization pitched battle in the run-up to the 2004 elections. The short-term financial future for TVRI is likely to depend on the persuasive powers of the new management team rather than any strategic planning.

Sumita wants Minister for SOEs Laksamana Sukardi immediately to legalize TVRI's corporate charter as a Persero and appoint new executive directors and board members to replace the old leadership.

TVRI may obtain funds through Sukardi's ministry but these will only be forthcoming after it has completed the change to a limited-liability company.

Some idea of the government's attitude and the enormity of the dilemma for TVRI can be gleaned from Sukardi's comments. Questioned by reporters, he admitted that he already has the names of the new nominees to head up his new acquisition. "But I haven't opened the envelope," he said glibly.