TV broadcasters can’t run cable, DTH: Regulator

New Delhi, Feb. 25 The Telecom Regulatory Authority of India (TRAI) has recommended that broadcasters should not be allowed to own more than 20 per cent in TV distribution platforms such as cable and DTH.

It also suggests that the broadcaster should have no control in the distribution and vice versa. The recommendations, to ensure plurality and diversity of views, will be examined by the Ministry of Information and Broadcasting. If approved, companies such as the Sun Group, the Essel Group, and Hathway will get three years to restructure their businesses.

Although no instance of “market failure” has been found, TRAI says it would rather “put timely safeguards than look for corrective measures which become difficult for the industry to align in future”.

“The sweeping nature of such recommendations is archaic and designed to perpetuate the current positions of certain players,” says Mr Uday Shankar, CEO, Star India, whose company owns about 23 per cent stake in the cable operator Hathway.

Mr Kalanidhi Maran, Chairman and MD of Sun Network, and his family own 80 per cent of Sun Direct. The Essel Group, engaged in broadcasting, DTH, cable and HITS will also have to ensure that common promoters of its cable business WWIL and Zee Entertainment do not own more than 20 per cent.

TRAI’s recommendations will apply to any “individual, a group of persons, a public or private body corporate, a firm, a trust, or any other organisation or body and also to include ‘inter-connected undertakings’ as defined in the Monopolies and Restrictive Trade Practices Act.”

Mr A. Mohan, Essel Group’s Executive Vice-President, says that the licensing requirement in DTH ensured that it would be compliant, if and when the recommendations are accepted.

Zee Entertainment has no stake in WWIL, and owns less than 20 per cent in Dish TV, says Mr Mohan. “The Government has to still bring in licensing in the cable sector, only then can you have compliance,” he adds.

He also points out that no restrictions were imposed on telecom players such as Bharti and Reliance ADAG who have launched DTH services and could aggregate content for their IPTV platforms. TRAI says it would review the matter of cross ownerships of telecom and media businesses in two years.

Reliance Entertainment is reported to have applied for more than 20 licences for channels, with plans to launch three initially. However, a company spokesperson points out that its DTH business Big TV was owned by the group’s Reliance Communications.

While the regulator points out that certain developed countries have cross media ownership, some of which have been recently reviewed and retained, the industry has opposed the move. “India is such a diverse country; I don’t think it is possible to build cross media empires in a large scale. The only thing that needs to be regulated is concentration in a geography,” said Star’s Mr Shankar.

Star owns 20 per cent in the DTH business Tata Sky.

TRAI says, “It was clarified by the Ministry that looking at the increasing trend of the print media entering into broadcasting sector, the issue needs to be examined in its entirety”.

Source: The Hindu Business Line