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Growth curbs on media firms

If the Bill is implemented, STAR would have to bring its holding in Hathway Cable to 20% from the current level of 26%, writes Gurbir Singh.

india Updated: Jul 04, 2006 02:54 IST

The new Broadcast Bill could give media companies a bad headache. Not only does it attempt to control the content of programming, but its anti-monopoly measures could also entail a restructuring of their share-holding pattern.

The bill seeks to cap cross media ownership, an area the government withdrew from hastily in 1997, at 20 per cent. It limits the stake of a broadcaster to a maximum of 20 per cent in another broadcasting network, a cable network or DTH or even a radio network.

The anti-monopoly measures are aimed at the electronic media, but caveats in the bill provide that the restrictions can be later extended to the print media.

If the provision is implemented, STAR would have to bring its holding in Hathway Cable to 20 per cent from the current level of 26 per cent. Mergers and equity transactions involving more than 20 per cent stake between two broadcasters like Sony and SAB TV or IBN and Channel 7 would also not be allowed. Though the checks on monopoly are laudable, the flip side is the squeeze on business options.

The Broadcast Bill is also expected to bail the Congress government out of the Conditional Access (CAS) mess. The Delhi High Court has directed it to implement CAS in four metros as provided under section 4 A of the Cable Network Act. But the Bill provides an escape hatch: the repeal of the Cable Network Act, 1995 with a provision for making conditional access 'voluntary'.

Also, television networks, like FM radio operators, will not be able to own more than 15 per cent of the total number of channels. With around 200 channels registered in India, 30 would be the maximum a group can own in the country. Zee Telefilms, that has the largest number of channels —more than 20 —could possibly feel the heat.

But the coup de grace is the provision that restricts the number of subscribers for cable and service providers to a maximum of 15 per cent. That means Siticable or Hindujas' INCablenet cannot have more than 9 million subscribers of the country's 60 million cable subscribers. Far more ludicrous is the situation for direct-to-home (DTH) broadcasting where there are just two operators —Zee's Dish TV and the STAR-Tata JV 'TataSky'. The two now face the mathematical nightmare of together being able to beam to a maximum of 30 per cent of the market.

The giants are already crying foul."These provisions will encourage the registration of multiple media companies as fronts to break up business operations. The restrictions on the number of channels and number of subscribers is like telling automobile companies how many cars they can sell," said STAR India's CEO Peter Mukerjea.

To encourage local or domestic programming, the Bill provides that television networks source at least 15 per cent of their content from Indian producers. Broadcasters will also have to give 10 per cent of their advertising time to public service messages and 10 per cent of the programming time to socially relevant programmes.  The local content whip is likely to hit English  channels, while the definition of what is 'socially relevant' will throw up a gaggle of disputes.