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FICCI suggests modifications in policy for private FM radio channels

FICCI suggests modifications in policy for private FM radio channels

Author | exchange4media News Service | Friday, Aug 19,2005 8:08 AM

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FICCI suggests modifications in policy for private FM radio channels

In an effort to ease operations of private FM radio channels, the Federation of Indian Chambers of Commerce and Industry (FICCI) has suggested removal of anomalies and glitches in the policy for FM radio broadcasting through private channels.

The suggestions include modifications in the eligibility criteria, norms for calculation of revenues, time frame for transfer of shares and co-location of transmission facilities.

FICCI has pointed out that the norms for bidding for FM radio channels under Clause 3.1 of the eligibility criteria imply that for a particular group of companies, only one company is allowed to bid for the available frequencies all over India. This would result in difficulties in implementation.

Therefore, the apex chamber has suggested that the criteria should be applicable for a group and not on individual companies in the group. However, the group as a whole should not be allowed to hold more than one licence per city and/or more than 15 per cent of the total available frequencies.

It has also pointed out that the net worth requirement should be changed to paid-up capital requirement.

In the case of Reserve One Time Entry Fee (OTEF), FICCI said that since the market would decide the value of the licence, along with the envisaged business plan of the operator, it was not practical to have 25 per cent as the reserve limit. Also, since the annual fee was based on 10 per cent of the reserve limit, the scheme could once again become unviable for radio operators.

The Reserve OTEF and subsequent minimum licence fee will also possibly keep out smaller players who may have the ability to mount interesting programming, but will be kept out due to the high fee. Hence, FICCI has suggested that the Reserve OTEF could be calculated on the basis of 25 per cent of the average of the top bidders as per the number of frequencies available and not 25 per cent of the highest bidder.

It also pointed out that the growth of a robust radio industry would depend on mergers, acquisitions and strategic tie-ups. The government should encourage this and the period of such events taking place should be three years from the date of operationalisation, instead of the proposed five years.

FICCI has also urged that the broadcast of news and current affairs be considered on a pilot basis in select areas for one year. Once the confidence had been built that the players were adhering to the code of conduct, the same could be extended nationwide, it added.

The chamber also strongly urged that the clause that disallowed the use of brand names or corporate group names be reconsidered. Such a clause is not insisted upon in any other media business, including new ones like DTH.

For co-location of transmission facilities, FICCI argued that co-location with AIR/ DD should not be mandatory.

As for migration to Phase II, it may not be possible for operationalised licenses of Phase I to exercise their initial option to migrate before the actual bidding process of Phase II. It will only be prudent for the operator to evaluate the bidding amounts of Phase II before he can take such a decision.

FICCI suggested that in the view the heavy losses incurred by Phase I operators and the fact that they supported the industry; the cut-off date as represented earlier should be April 1, 2004. Alternately, if the cut-off date was kept as April 1, 2005, then Phase I operators should get an automatic migration without being required to pay the one-time entry fee.

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