Broadbandindia Magazine

Telecom Regulatory Authority of India (TRAI), the broad casting regulator for the Indian sub-continent has be gun to work on the recommendations by the Ministry of Information & Broadcasting (MIB). The Authority has invited views form different stakeholders to opine over raising limits on foreign direct investment and on whether there is need for modifications in uplinking and downlinking guidelines for television channels.

This step comes in after the MIB made recommendation to revise the norms on the aforesaid issues with the changing trend of the Indian Broadcasting sector. According to a statement released by the regulator states that the I&B Secretary Raghu Menon had written to TRAI chairman J S Sarma on two separate occasions recently on both the issues. In the first letter, the Ministry has asked Trai to revisit its recommendations of 26 April 2008 relating to FDI limits in the media. In the second letter, the Ministry has said that Trai should consider the policy of permitting Uplinking or Downlinking permission to television channels as “the spectrum and transponder capacities for satellite TV channels are not unlimited.”

In the light of the uplinking and downlinking guidelines MIB says that the need to revise the norms emerges with the growing number of channels in the broadcasting ecosystem against a limited availability of spectrum. There lies a possibility in future that this increase could lead to jamming of airwaves, creating problems in spectrum allocation. MIB has thus requested TRAI to look into the possibility of revising guidelines so that entry of too many TV channels can be regulated. The MIB has provided permission to around 423 channels under uplinking guidelines, 230 belong to the news and current affairs category. In addition, about 170 fresh applications are pending approval. Menon says that several issues such as licensing regulations, security conditions, and other factors may also have to be considered while arriving at a report. The issues include putting a cap on the number of channels that can be permitted downlinking or uplinking permission, the maximum that can be allowed in the present available spectrum, whether channels should give assurance of a minimum five years regular telecast to ensure there are no premature closures and cancellation of licences if this happens. The license of ten years given at present should also be examined to see if it should be lesser or higher. In addition, Trai has been asked to explore the possibility of using India as a television hub for uplinking for telecast in foreign countries as being down in Hong Kong and Singapore.

As for the foreign direct investments (FDI) ceiling, I&B secretary mentions about the DIPP’s recommendations. Earlier this year, the Department of Industrial Policy and Promotion (DIPP) had proposed that FDI ceiling for FM broadcasting to be raised to 24% from the existing 20%. It had also suggested that the FDI cap in the DTH sector be raised from the existing 49% to 74%. In light of these recommendations, Menon has sought to know whether the telecom regulator would revise its earlier recommendations on the matter. In regard to the issues TRAI has requested stakeholders to submit their views by November 2, 2009. Many Indian media houses, both in print and electronic, have expressed concern to the government over its proposal to allow higher foreign investment in the broadcasting sector, pointing out that such a move would be totally inconsistent with the established media policy of the country, it is learnt.

They have drawn the attention of various ministries to the anti-FDI stand taken by the government more than 10 years ago in the case of the media and broadcasting sector. According to some media barons, the need to safeguard the media sector from foreign control is even more necessary at this point as technology is advancing by leaps and bounds. Replying to a civil writ petition, the government had submitted an affidavit to the Delhi High Court in 1997, pointing out that the “the government is anxious to see that powerful foreigners or foreign companies do not take over and monopolise the broadcasting in the country, which is so crucial for effective functioning of our democracy”. The government had stated in its affidavit that control of powerful distribution platforms and infrastructure by foreign companies and foreigners “will be detrimental to our (India’s) sovereignty apart from influencing and corrupting the Indian values and culture”.

Carrying the point forward, a top industry representative had recently written to I&B minister Ambika Soni and home minister P Chidambaram, indicating that the government proposal to hike the foreign investment limit in direct-to-home (DTH), cable and headend in the sky (HITS) services from 49% to 74% was “detrimental to the growth of the Indian media industry and is fraught with danger as media is a sensitive sector and DTH, cable TV, HITS being the media content carriers, are integral part of media establishments.”

The letter reiterated that “the existing restrictions of foreign investments in these platforms was a well-considered and carefully thought out decision on the part of the government…” It added that “giving controlling stake in a media business whether in content or in distribution platform to the foreigners may lead to the danger of gradual manipulation of the public views and ultimately can destroy the delicate fabric of composite culture, value system and secular nature of the country.” On the comparison between the media and telecom sectors, a source pointed out that media is a very sensitive sector and “therefore it has been recognised that a differential treatment is needed as is done in various other countries as well.”

Even in some advanced economies like the US, where 100% FDI in telecom is allowed, they continue to maintain a differential policy on ownership of media sectors. Touching upon the recent Press Notes 2, 3 and 4, issued by the department of industrial policy and promotion, in the commerce ministry, officials in some media companies have said that the new methodology to calculate FDI would enable foreign companies to easily control Indian entities.

This applies to the media sector also, “as recently many news channels have successfully used this route to circumvent the FDI licensing condition,” a source said. The FDI cap in news channels is 26%. A section of the media business believes that “under these circumstances, there is no need to for further increase in FDI limit in the media sector.” Last year, Trai had recommended allowing higher FDI in many of the media and broadcasting segments, following which, a Cabinet paper was prepared incorporating some of the regulator’s suggestions. Several top industry representatives have opposed the move ever since.