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‘Auditing problem in FM revenue share model’

14-July-2004
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‘Auditing problem in FM revenue share model’

With the regulator all set to submit the FM radio recommendations, the government is pointing at practical problems in the revenue-sharing model. According to sources in the government, assessment of revenue and auditing will be quite tough. The Telecom Regulatory Authority of India (Trai), which got the additional responsibility for monitoring the broadcasting sector a few months ago, has already been alerted on this front. The Trai recommendation on the second phase of FM radio is expected in a few days.

The Amit Mitra committee, which submitted its FM recommendations last year, had sought a revenue-sharing model between radio licencees and the government. Currently, a licence fee regime is in place. The Mitra committee was set up at the behest of the former information and broadcasting minister, Mr Ravi Shankar Prasad. Interestingly, the I&B ministry had not faulted the basic structure, including the shift to the revenue-sharing model, recommended by the Mitra committee, at that point.

The UPA government is, however, taking a fresh look at the FM radio scene and the policies governing it. According to sources, government is keen on a transparent system, but certainly not on a revenue-sharing model. “Trai is free to evolve an alternative system,” a government source said. To put things in perspective, FM players have been complaining of the steep licence fee, and the Mitra committee recommendations were aimed at relaxing the rules for the sector.

Besides the shift from licence fee to revenue-sharing model, FM players also want permission for FDI and news. However, according to indications, government could be conservative in granting FDI for the sector. “Increasing FDI in key sectors like telecom, insurance and aviation is one thing. But, allowing FDI in radio is unlikely,” according to a senior government official. Permission to broadcast news on FM stations is yet another area where government may play quite tough, it is learnt.

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