TRAI to Make Recommendations On Various Issues

Telecom Market In India

In a bid to push reforms in the broadcasting sector, the Telecom Regulatory Authority of India (TRAI) has decided to approach the information and broadcasting (I&B) ministry to take a call on a range of recommendations pending with the latter since 2013. The regulator will write to the ministry as well as meet the new I&B minister Smriti Irani with a request to consider the proposals, two people familiar with the development said. “We are planning to make a formal request to the ministry to consider the recommendations submitted by TRAI on multiple issues across the broadcasting sector and take a call. The reforms have been stuck for so long; it is like a black hole,” said one of two people cited above, on the condition of anonymity.

Also from licensing framework, multi-stage application process, delay in security clearance to satellite permissions to many others- all bottlenecks that worry the broadcasters were discusses in perhaps the first of its kind discussion held by The Telecom Regulatory Authority of India (TRAI) on ‘Ease of doing business in broadcasting sector,’ held on November 1, 2017. At present, India is the fifth largest Media and Entertainment market and stood at Rs 1262.1 billion at the end of 2016. It is also estimated that the market will grow at a CAGR (compound annual growth rate) of 13.9% to Rs 2419.4 billion by 2021. However, if a more conducive environment is not created by removing entry barriers and simplifying existing procedures and processes, the trajectory of growth could be affected. “We all know how India has improved its rank in the “Ease of doing business”. Even Prime Minister Narendra Modi is very focused on simplifying the process and removing redundancy,” RS Sharma, Chairman, TRAI said.

As mentioned in the submissions many stakeholders pointed out the issue of multi-stage application process and delay in security clearances. “Translating the manual procedures to the internet is what many think is e-governance but it is actually “transforming the whole procedure” and therefore, a relook in the existing procedures is required. Sharma further went on to say, “ease of business is essentially changing the processes so as to achieve the most from the existing policies with a simplified process which is convenient for all stakeholders.”

Recommendations

Before making recommendations on various issues, TRAI holds consultations with all the stakeholders, analyses their responses and then submits the conclusion (as recommendations) to the ministry for approval, as per the regulator’s mandate. At present, there are nine sets of recommendations pending for approval with the ministry on multiple issues, including media ownership norms, monopoly in cable TV sector, direct-to-home (DTH) licensing guidelines, restrictions on ownership of TV channels and DTH platforms by certain government entities, radio audience measurement, digital terrestrial transmission and infrastructure sharing.

In one of the recommendations, the regulator has proposed barring Central and state government-funded entities from entering the business of broadcasting or distribution of TV channels. In another, it has recommended regulatory framework for radio audience measurement. “Among the most important ones right now are the media-ownership norms, DTH licensing guidelines and digital terrestrial transmission. DTH firms are running on interim licences; there are no guidelines,” said one of the two people mentioned above.

In 2014, the regulator had submitted recommendations on media ownership rules across television, radio and print mediums and internal plurality of news. In 2015, TRAI had proposed increasing the licence duration of DTH firms to 20 years and reducing their annual fee to 8% of adjusted gross revenue (AGR) from 10% of gross revenue. As for digital terrestrial transmission, the regulator had proposed a road map for the process by opening the space to private broadcasters, earlier this year. I&B ministry did not respond to an e-mailed query seeking comment on pending TRAI recommendations.

Media industry executives believe that the sector has suffered enough and it is time to take action regarding the recommendations. “The reforms have been stuck and this is hurting the sector. The sector has not been able to attract FDI (foreign direct investment). There is nobody to keep a check on quality of services and small cable operators are being dominated by big multi-system operators. There is no transparency in the sector. It is high time that the ministry takes a call on the pending regulation,” said an executive at one of the leading broadcasters, who declined to be named.

Permission

According to the extant policy of Department of Space (DoS), Broadcasters/Teleport operators and HITS operators are permitted to use C-band frequencies. And, after the C-Band satellite capacity was fully liberalized, the service providers could directly enter into agreements with foreign satellite owners after some clearances from the DoS.

However, Amitabh Kumar representing Zee Networks claimed, “For channel permission, a reference in required to be made to ISRO by the MIB (Ministry of Information & Broadcasting)…and in many cases the permission is being denied.” To this obvious question of what is the issue in using Indian satellites, Star TV said, “we already have long term contracts with foreign satellites…ISRO acts like a company regulator as well as jury.” Other broadcasters/Teleport operators also had similar worries. “ISRO doesn’t give bandwidth on foreign satellites to new channels,” Ankit Singh, who was representing Network 18 said. He further told TRAI that ISRO insists them to use Indian satellites.

Presently, broadcaster is required to take prior permission from MIB which further takes security clearance for MHA (Ministry of Home Affairs) before granting permission. The delay in approval from MHA leads to a scenario where broadcasting companies fail to comply with other statutory requirements pressed by other laws governing the companies. This issue was almost unanimously raised by all broadcasting companies. Some broadcasting companies were of the view that it should be done away with. However, the Dish TV representative felt that need of seeking permission is definitely required buy, the govt needs to relook at the procedure.

“Some states are trying to levy LBT, Local Body Tax, which was earlier levied as an entertainment tax…this is a politically motivated move,” Dish TV representative, Ranjit said. In July, local bodies department, in Punjab had decided to impose Rs 50 as entertainment tax per TV for cable/dish connection which could have given the department a revenue of around Rs 400 crore annually. However, recently, the Punjab government had proposed to drastically cut it. Ranjit who believes that it is politically motivated move, further said that it is easy for a government to raise and scrap taxes but as a DTH operator, “it will be a night mare for us.”

Broadcasters, who are required to seek MIB’s permission for change in the name of the channel, language, logos etc, are of the view that it is part of the business plan. The elaborate documentation required to seek permission is a time-consuming process and interferes with the business plan. However, the other side of the picture is the broadcasting companies launching a new channel of a different genre. “Can a channel for which licence has been issued to be a movie channel be converted into a music channel?” “It is not a replacement of channel, it is a new channel launched being done on the old satellite permission by the MIB. The downlinking permission requires the genre of the channel.”

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