Cross-media holding curbs in the works

Cross-media holding curbs in the works

Author | Source: Business Standard | Saturday, Jun 17,2006 7:58 AM

Cross-media holding curbs in the works

Media companies, including newspapers and TV and radio broadcasters, may have to reduce their equity holding in other media ventures, once a new set of norms proposing to usher in stiff cross-media holding restrictions in the Indian media sector are enacted.

A new Broadcasting Services Regulations Bill, 2006, has been proposed for Cabinet approval.

The draft Bill, finalised by the information and broadcasting ministry on June 7, also proposes the setting up of a content and carriage regulator for the broadcasting sector — the Broadcast Regulatory Authority of India.

Once the Cabinet approves the Bill, it will have to seek legislative approval in Parliament.

The proposed cross-media restrictions will apply to the broadcasting sector and will be extended to the print media later.

As per the draft Bill, no broadcasting company will be allowed to own more that 20 per cent in any other broadcasting company like radio or a television distribution company like a cable operator or a direct to home (DTH) operator.

In addition, broadcasters will also not be allowed to have any financial or commercial agreement with another media company, which will lead to management control.

Once implemented, companies like Zee, Star and NDTV, which have multiple broadcasting ventures as well as television distribution business, will have to rejig the equity structure in ancillary business to bring down the equity in them to below 20 per cent.

Another option before the companies will be to spin off business divisions into separate companies and reduce their holding in them or park them in different companies.

Similar conditions will be applicable to companies, which operate multiple media businesses as divisions. Similar cross holding restrictions are there in the direct to home (DTH) broadcasting, wherein a broadcaster can hold only up to 20 per cent in a DTH company.

Similarly, a cable network company or a DTH operator will not be allowed to own more that 20 per cent in a broadcaster.

The policy also puts in another stiff condition on the number of channels a broadcaster or a radio station operator can launch.

As per the policy, the number of channels run by a broadcaster cannot be more than 15 per cent of the total number of channels in the country.

For cable operators and DTH service providers, the policy stipulates that, the number of subscribers of a broadcast network provider cannot be more than 15 per cent of the total subscriber of such service in the country.

This is the second attempt by the government to usher in cross media holding restrictions in the country citing an intent to prevent monopoly in the media sector to ensure diversity of news and views.

In 1998 the proposal to impose strict cross media holding restrictions was withdrawn after media companies resented it. Similar policies are there in countries like UK, which prevents companies to own different media business entirely.

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