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FM licence fee impasse: Govt mulls the way out

07-May-2004
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FM licence fee impasse: Govt mulls the way out

Pushed into a corner by a spate of court cases, government is contemplating ways to emerge victorious out of the FM radio licence fee imbroglio. There are several options before the government to penalise the defaulters, sources told eFE.

The options include sending notices to defaulting FM players for cancelling their licences and moving for vacation of ‘stay’ in various courts. In fact, it has already initiated legal action, which is likely to result in a long-drawn litigation in the radio sector. FM operators in the metros owe over Rs 100 crore to the government as annual licence fee. These players want the deadline for the payment of licence fee to be extended till a new FM radio policy is announced.

Although till Wednesday, officials in the information and broadcasting ministry were talking about encashing the bank guarantees of the FM radio defaulters, the situation has changed now.

Not only have most players moved court, but they have also obtained a stay against the government encashing their bank guarantees.

In Chennai and Delhi, for instance, licencees including Sun, Entertainment Network India Ltd and Radio Today have obtained a stay. In Mumbai, there’s no stay yet. And pure-play Kolkata players like Hitz, who had never made any representation for extension of fee payment deadline, have now joined others to seek a fee waiver.

Even as the government is defending itself in Mumbai and Delhi high courts, the interim order is understood to have gone against it in Delhi. That is, FM players in Delhi have got a stay against the government encashing their bank guarantees.

The FM radio companies, which failed to pay their dues by the deadline of April 29, include Entertainment Network, Radio Today, Music Broadcast Pvt Ltd, India FM Radio, Sun TV, Hitz FM, Radio Mid-day and Millenium Broadcast.

Of these, Millenium has already stopped operations, and Radio Mid-day West has given a notice to surrender its licence from June 28.

Private players are expecting a softer set of rules for the radio sector, as a committee headed by Ficci secretary general Amit Mitra had recently recommended a transition from a licence fee regime to that of revenue-sharing. But, there has been no policy change so far.

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