Friday, 28 December 2012

TRAI Disallows Centre Or State Government Entity In Broadcast Or Distribution Business

In its recommendations on the “Issues related to entry of certain entities in to the business of broadcasting and/or distribution of TV channels”, TRAI has said that these entities should not be allowed to enter in to the business of broadcasting and or distribution of TV channels.
These recommendations have a long term effect on the industry including the ongoing process of digitisation where the first Phase has already been completed in the four metros in a haphazard manner by the government and the second phase involving 38 cities has already been announced to be completed by 31st March 2013.

It may be recalled that only Mumbai and Delhi had completed seeding of STBs to a respectable level by 31st October 2012. Kolkata cable operators are stuck between the Ministry and the State Government as the later does not want analogue to be switched off unless all subscribers can get their STBs installed while the I&B Ministry has already threatened the MSOs that if they don’t switch off analogue by 27 December 2012, they may lose their licences.
Chennai is the most affected by the present recommendations as the State run MSO ARASU is still waiting for its DAS licence to be issued by the Ministry. Since the broadcasting business in the state is completely under the control of the two rival political parties, one running the government and the other in opposition is a partner in UPA running the country, cable operators are worried about their future. Outside the Chennai metropolitan area all networks (23000 LCOs as claimed by the state government) were forced to join the state MSO ARASU. In Chennai however, the ground was being held by Sumangali cable run by the Marans of Sun TV Group who have the support of DMK, a partner in UPA Government at the Centre. Many cable operators were against joining Sumangali because of their monopolistic methods and thought the State owned ARASU would be a safe bet. Many of them have collected Rs 500 from subscribers and deposited in the ARASU account to get STBs.
TRAI recommendations have put them in dire straits as they will be forced to join a company whom they had hated all along and would cost them heavy, both business wise and money wise.
I&B Ministry’s late reaction and timing of their reference to TRAI on this issue second time is also questionable as first phase of digitisation is already completed and earlier recommendations on the subject were lying with the Ministry since 2008 without any decision. People in the industry feel it is a political move to suppress the voice of the opposition, year before the General elections in 2014. Also, one wonders how the government will stop the monopoly of political party supported ventures in many states like Punjab and Odisha and Chhatisgarh.
The present recommendations come as a result of a reference dated 30th November 2012 received by TRAI from the Ministry of Information and Broadcasting (MIB) on the issue of whether Central Government Ministries, Central/State Government Departments, Central/State Government owned companies, Central/State Government undertakings, joint venture of the Central/State Governments and the private sector and Central/State Government funded entities may be allowed to enter in to the business of broadcasting and/or distribution of TV channels.
Earlier in December 2007, the MIB had sought recommendations of TRAI on the issue whether entities such as State Governments and political bodies should be permitted to enter into broadcasting and distribution activities. Following an exhaustive consultation process, the Authority had forwarded its recommendations on 12th November 2008 stating that no government owned entity should own a broadcasting channel or distribution network.
The present recommendations are in continuation of the earlier ones and recommend that the Central Government should provide an appropriate exit route if any such entity already owns a broadcasting channel or distribution network.


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