TRAI comes up with recommendations on media ownership

TRAI comes up with recommendations on media ownership

Author | Puneet Bedi Bahri | Monday, Mar 02,2009 6:53 AM

TRAI comes up with recommendations on media ownership

The Telecom Regulatory Authority of India (TRAI) has made certain recommendations relating to ownership restrictions and cross holding within the broadcasting sector. The accumulation of interest in the media can be regulated through different types of restrictions on ownership. There can be restrictions on cross-media ownership across different segments of media such as print, television, and radio; cross-holding restrictions to prevent consolidation and restrictions based on market share in a given geography within each media segment.

Recommendation on DTH:

According to the TRAI report, restrictions on consolidation, including ‘vertical integration’ within a media segment, have been placed only in the guidelines for obtaining license for providing direct-to-home (DTH) service in India, vis-à-vis broadcasters and cable operators.

The restrictions in the DTH guidelines place a ceiling of 20 per cent on the holding of total paid up equity in the DTH licensee by broadcasting companies and/or cable network companies and vice versa. However, there are no ownership restrictions between broadcasting companies and cable network companies. The licensee company is not to hold or own more than 20 per cent equity share in a broadcasting and/or cable network company. The licensee shall submit the details of investment made by the licensee company every year once within one month of start of that financial year.

Recommendations on radio:

Restrictions on market share in the city/ state /country within a media segment have been placed only in the case of private FM radio. The FM radio policy permitted the applicants to bid for only one channel per city. Further, a restriction on total number of channels that could be held by an applicant and its related entities was also put at 15 per cent of the total number of channels allocated in the country.

Must dos for cable television network:

As per the Cable Television Network (Regulation) Act, 1995, cable operators must carry two Doordarshan terrestrial channels and one regional channel of a state in the prime band. So far as DTH is concerned, ‘the licensee shall provide access to various content providers/ channels on a non-discriminatory basis’.

Stakeholders have argued that the freedom of speech cannot be restricted for the purpose of regulating the commercial aspect of the activities of the media and that cross-media holding restrictions curtail the right of publication, directly affecting the right of freedom of speech and expression.

Impact of the global crisis:

The current global financial crisis that has impacted almost every industry has not spared the Indian media industry. Both the print and electronic media are facing the impact of the global financial crisis.

With advertisement revenues diminishing, there are reports that media companies are closing regional offices, laying off employees and searching for investor bailouts. Some media reports indicate that the fall in advertising revenue of print media has been as sharp as 20-45 per cent during October-November 2008. The rising cost of newsprint has added to the print media industry’s woes. Representatives of the print media have approached the Government seeking an upward revision in rates of Government advertisements, abolishing customs duty on newsprint and withdrawal of fringe benefit tax levied on the non-core salary components of their employees. The media industry, particularly the print sector, has been hit sharply by the fall in advertisement revenue and rising cost of newsprint because of the global financial crisis.

The stakeholders associated with the print and television media are of the view that there is no requirement for any kind of restrictions. The arguments offered include: putting restrictions on cross-media control will not ensure plurality, but will stifle growth; the multiple mediums and distribution channels that are available prevents monopolisation. The Indian market is quite different from other world markets since we have so many dialects, the media industry in India is quite fragmented, cross-media restrictions in other countries were enacted when the media was at nascent stage, the presence of Prasar Bharati ensures plurality, other existing regulations also ensure plurality, etc.

Cross control/ ownership across telecom and media companies:

Currently, there are no restrictions in this regard in India. Also, as on date, the two industries/ sectors are quite distinct and do not have much in common. However, with convergence of telecom and media technologies like IPTV, mobile TV and 3G encompassing services like video, voice and data, there is likely to be an overlap in the telecom and broadcasting services as synergy between the two sectors exists.

The stakeholders are generally against any restrictions. Most of the stakeholders are of the view that the phenomenon of convergence through Internet and mobile telephony brings the newspaper, TV and radio channel on a single screen, thus making the very concept of specific media markets/ geographies irrelevant. The boundaries between telecommunications and broadcasting are blurring rapidly. It is necessary for the legal and regulatory framework to adapt to this convergence and actively promote such convergence. This will also help in facilitating competition.

Therefore, the Authority recommends that no restriction should be imposed on cross control/ ownership across telecom and media sectors at this point of time. The issue could be reviewed after two years.

(Additional inputs by Pallavi Goorha)

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