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TRAI releases consultation paper on round 2 FM licensing

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TRAI releases consultation paper on round 2 FM licensing

The Telecom Regulatory Authority of India released a consultation paper on the second round of opening of the FM radio sector to private players on April 14.

The objective of this Consultation Paper is to examine the various licensing, regulatory and level-playing-field issues in enabling the issue of the second phase of FM private radio licenses. The paper has been prepared to seek the views of stakeholders on the licensing terms and conditions for the second phase of FM licensing. It also calls for comments of stakeholders on the issue of migration for existing licensees.

The paper highlights various issues in FM broadcasting. Some of the main issues are: Type of License - whether there are needs to be any stipulation on the type of content to be carried on each license or the choice is to be left to licensee. Another issue for consultation is the extent of area covered by the license - whether the license should be city-wise or based on regional/national basis. According to the paper, the advantage of larger service area is two-fold. It provides the operator the flexibility to roll out in several areas at their convenience i.e. they do not have to wait for the licensing process. Such roll out would help them in increasing their advertising revenue potential. On the other side, it would meet the policy objective of roll out.

Thirdly, Duration of Licenses - The Radio Broadcast Policy Committee Report recommends that the licenses could be renewed for a further period of five years subject to satisfactory performance by the licensee and provided that no default has occurred during the period. The issue for consultations, however, is the need for change in the present license period, and also the need for license renewal.

On the roll out obligation for private FM players, the paper states expansion of the reach of FM radio to cover 60 per cent of the population by the end of the Tenth Plan. Private operators are to be encouraged to provide FM radio services in metros and small cities.

The paper also discusses on the funds for rural roll out and niche programming. It says there is a need to examine the demands for instituting a fund for improving roll out and promoting niche programmes. As for the licensing process, the consultation paper states adoption of an open and transparent licensing process that should meet the policy objectives of the Government. On the quantum of entry and license fees, how the entry fees should be set in case auction is not adopted or what should be the basis of reserve price, if auctions are held, have been put forth in the paper. The paper also highlights the issue of multiple licenses. The consultation is based on whether licensees be permitted to own multiple frequencies in the same city to provide flexibility to broadcast programmes in different languages or to provide diversity of content.

The present licensees are required to adhere to the AIR programme code. However, the issues for consultation are: Do the existing laws of the country impose sufficient self-restraint on the licensees or is there is a need to impose any program code? Secondly, are the existing guidelines on AIR sufficient or do they require any amendments?

The Consultation Paper dwells on the technical issues like specifying maximum or minimum transmitter power and height of the tower, specifying reasonable coverage requirements, permission to install antenna outside the premises etc.

With regard to networking, the paper asks whether networking should be allowed. And, if so, then should permission for networking between broadcasters in the same city be allowed, broadcast stations of the same entity in different cities, between broadcasters across the cities etc.

On the news current affairs, the paper refers to different issues for consultation. The paper discusses whether the restriction on news and current affairs should be lifted for the phase II licensees.

In view of the difficulties faced by licensees in co-location, it asks whether co-location be made mandatory. The paper also calls for comments on penalty that should be imposed for non-operationalisation of the awarded licenses and the manner in which the value of performance bank guarantee should be fixed for a revenue sharing mechanism

On FDI, the issue for consultation are penalty that should be imposed on non-operationalisation of the awarded licenses. Secondly, it refers to the manner in which the value of performance bank guarantee should be fixed for a revenue sharing mechanism. Also, whether FDI should be permitted in this sector and if so, what should be the limit of FDI.

Finally, on the migration of license, the paper asks whether licensees of Phase-I should be allowed to migrate to Phase II and if so, on what conditions. As is known, on February 11, 2004, five private FM broadcasters submitted a representation requesting for deferment of the annual FM license fee till the Government takes a decision on implementation of the FM Radio Task Force recommendations. This representation was referred to TRAI for its recommendations. Meanwhile, TRAI has begun examining various issues involved in the phase II licensing of FM Radio.


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