2020: MIB’s regulatory interventions & their impact on media

Looking back at the year when the ministry initiated changes like bringing OTT under its ambit, capping FDI at 26%, amending CTN ACT of 1995, issuing advisory on gaming ads among others

e4m by Javed Farooqui
Published: Jan 8, 2021 8:29 AM  | 7 min read

2020 was a busy year for the ministry of information and broadcasting (MIB) on the regulatory front. With the regulatory framework for traditional mediums like TV, print, and FM radio firmly in place, the ministry turned its attention towards the digital medium.

After months of discussions and deliberations, the government of India finally brought digital news and over the top (OTT) platforms under the ministry’s ambit. While the technology side of digital news and OTT will continue to be governed by the ministry of electronics and information technology (MeitY), the content part will now come under the purview of the MIB.

Thus, the MIB is now the nodal ministry for TV, print, digital news, OTT, films and animation.

OTT regulation

The OTT players are concerned that the move to bring OTT content under MIB is the first step towards regulating a segment that till recently enjoyed immunity from regulations.

The MIB’s refusal to support the Internet and Mobile Association of India's (IAMAI) self-regulatory model for OTT platforms only lent credence to the theory that an OTT content regulation code was on its way. The code supported by 15 OTT platforms had suggested two-tier internal complaints system.

In a letter to the IAMAI, the ministry had advised it to look at the structures of BCCC and NBSA as guiding principles for developing a credible self-regulatory and grievance redressal mechanism for Online Curated Content Providers (OCCPs).

The ministry has tried to allay the fears of the industry by stating that the government wants a level playing field and protect the interests of the viewers, particularly children.

The OTT players are hopeful that the ministry will try to strike a balance by encouraging creative freedom while keeping errant platforms under a tight leash.

FDI cap in digital news

Another key issue which had major ramifications for the digital news sector was the capping of foreign direct investment (FDI) limit at 26%. Earlier, there was no FDI cap and digital news platforms had the liberty to bring in 100% foreign investment.

During the year, the ministry issued an order asking digital media entities to comply with the new FDI norms by furnishing details like shareholding pattern, directors/shareholders, foreign investment and balance sheet.

It had also asked digital news entities that have FDI in excess of 26% to take necessary steps to bring down the foreign investment level to 26% by 15th October 2021 and seek approval of the MIB.

Close on the heels of the MIB order, Huffington Post India closed down with FDI restriction being cited as one of the factors in its closure. News aggregator Dailyhunt was also seen restructuring its operations to comply with the FDI norms.

The 26% FDI restriction coupled with the digital news coming under the ambit of MIB was seen as the government’s attempt to muzzle media freedom.

The government, on its part, has reasoned that the FDI in other segments like print and TV news also have FDI caps. It also pointed out that other mediums also have to follow certain guidelines as part of their licencing and registration process.

While digital news and OTT coming under MIB grabbed most of the headlines there were other important business matters that were overseen by the ministry.

Overhauling of CTN Act 1995

The ministry is also making a slew of amendments to the Cable Television Networks (Regulation) Act, 1995 in order to bring it in tune with the changing times. It has issued Cable Television Networks (Regulation) Amendment Bill, 2020 seeking feedback from general public/stakeholders.

One of the key amendments being brought by the ministry is to disallow state governments or their entities as well as religious and political parties from entering the TV distribution space.

In clause 4(1), the ministry has inserted a negative list for registration as a cable operator.

The proposed clause reads as “Provided that such a registration or renewal of registration shall not be granted to the State Governments, urban and local bodies, political and religious bodies, State Government Departments, State Government-owned companies, State Government undertakings, Joint ventures of the State Government and the private sector and State Government funded entities.”

Once the bill becomes an act, it will bring the curtains down on Tamil Nadu government-owned Arasu Cable TV Corporation. The MIB has awarded a provisional licence to Arasu. However, the provisional registration does not confer any right to Arasu to claim regular registration, which is valid for 10 years.

New DTH guidelines see the light of the day

After years of delay, the government finally approved the new guidelines for direct to home (DTH) platforms that will ensure a stable regulatory environment for the sector. The DTH industry is left with four operators namely Dish TV-d2h, Tata Sky, Airtel Digital TV and Sun Direct.

Following the cabinet nod, the ministry promptly published the revised DTH guidelines with consolidated operational guidelines along with the amendments expected to be published in due course.

The ministry has directed DTH operators to clear their dues in order to receive a fresh licence. The guidelines also state that a vertically integrated entity will not reserve more than 15% of the operational channel capacity for its vertically integrated operator.

The DTH licence fee will be charged at 8% of its Adjusted Gross Revenue (AGR) while the licence will be valid for a period of 20 years with an option to extend it for another 10 years. The licence fee will be payable on a quarterly basis.

However, the government’s decision to retain 20% cross-media holding restriction has not gone down well with the industry.

Committee to review TV rating agency guidelines

Another major industry issue that the ministry has taken cognisance of is that of the TV measurement system, which has been in the news recently for all the wrong reasons. The ministry has formed a committee to review the guidelines on television rating agencies in India.

The committee was formed in the backdrop of the Telecom Regulatory Authority of India’s (TRAI) recommendations on the review of TV audience measurement and rating system.

The four-member committee comprising Prasar Bharati CEO Shashi Vempati, IIT Kanpur Professor of Statistics, Department of Mathematics and Statistics Dr Shalabh, C-DOT Executive Director Dr Rajkumar Upadhyay and Professor Pulak Ghosh of Centre for Public Policy (CPP) have been tasked to carry out an appraisal of the existing measurement system and make recommendations on the way forward.

The MIB decision was seen as government interference in the TV measurement space and an intrusion in the functioning of BARC. The industry’s request for non-interference in the audience measurement system has gone unheeded by the ministry.

Infra sharing between Cable and HITS platforms

The ministry also allowed voluntary infrastructure sharing between headend in the sky (HITS) operators and multi-system operators (MSOs).

As per the new clauses added to the HITS guidelines, a HITS operator may share the platform infrastructure on a voluntary basis, in flexible ways, for distribution of TV channels provided that the signals of the HITS platform are distributed to subscribers through Cable operator only and the encryption of signals, addressability and liabilities are not compromised.

The decision is expected to benefit small and medium MSOs as they can use an existing HITS service provider’s infrastructure to expand or to service their existing customers. It will also help smaller MSOs to reduce their operating expenses particularly in light of the new tariff order (NTO), which requires a lot of regulatory compliances from the distribution platforms.

The transparency in the pricing of channels thanks to NTO is expected to act as a catalyst in encouraging distribution platforms to share infrastructure.

Advisory on online gaming ads

As part of its efforts to protect the consumer interest, the ministry played a key role in getting the Advertisers Standards Council of India (ASCI) to issue guidelines for ads pertaining to online gaming for real money winnings.

It also issued an advisory directing all private satellite TV channels to follow the ASCI’s advisory regarding ads on online gaming and fantasy sports.

The move to have oversight on online gaming ads was welcomed by the industry. Considering the surge in the popularity of online gaming platforms, this move was as a step in the right direction.

According to industry players, bold disclaimers are expected to increase player awareness and help them make an informed judgment.

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