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June 25, 1997


N Vittal

Narrowing down on Broadcasting Bill

Industry sectors like telecommunications and broadcasting, which are traditionally monopolies of the government, are being privatised. This is happening partly because the nature of the technology itself and partly because of geopolitical developments.

India's Broadcasting Bill, 1997, is a major landmark in this respect. The origins of the Bill can be traced back to the Supreme Court's utterances in the Hero Cup cricket matches case. In 1995, the Board of Control for Cricket in India had challenged the right of the national television, Doordarshan, to not allow any other TV station to cover the game live.

Now the Bill is intending to take the process of liberalisation in the broadcasting sector one step further.

The new bill's statement of objects and reasons says: 'The Bill seeks to establish an autonomous Broadcasting Authority for the purposes of facilitating and regulating broadcasting services in India so that they become competitive in terms of quality of services, cost of services and use of new technologies, apart from becoming a catalyst for social change, promotion of values of Indian culture and shaping of modern vision. It will also curb monopolistic trends in this sensitive field so that people are provided with a wide range of news and views.'

The question now is whether some of the provisions in the Bill really help to achieve these objective or do they work in achieving the exact opposite of what's been intended.

Having been directly involved in the Hero Cup case in my capacity as the then director general of telecommunications, I would suggest that the Broadcasting Bill and the liberalisation in the broadcasting sector should avoid the pitfalls which face the telecom sector.

Some of the healthy initiatives taken in the telecom sector should be mutatis mutandis extended to the Broadcasting Authority.

Even though it may be late in the day, the first suggestion I would make is that why should we have two separate authorities - a Telecom Regulatory Authority of India for telecom and a Broadcasting Authority of India for broadcasting? After all, both involve management of the radio frequency spectrum.

I have been suggesting that the spectrum management be given to the TRAI. If this happens, the need for integrating the BAI with the TRAI will be obvious. As far as I am aware even the Federal Communications Commission of United States controls both telecommunications and broadcasting.

The TRAI and the BAI need to be merged because technologically, telecom and broadcasting are integrating more and more. And there should be no confusion in the management of either of the services.

If laws lag behind technology they may lead either to delay in introduction of new technology or result in less than optimal use of the technology.

However, as plans are being readied to set up the BAI anyway, let us look at its composition as specified by Section 3. I find that the BAI would have far too many members. As Section 3(4) points out, the chairperson will be selected by a committee comprising chairman of the Council of States, the minister for information and broadcasting and chairman of the Press Council. Other members will be appointed by the government as provided in Section 3(8).

It is desirable that the size of the BAI be kept small and compact by limiting the number of members to a maximum of say six or seven.

I would suggest that secretaries to the government of India be not associated at all with the BAI. This is a healthy principle followed by the TRAI and there is no reason why the BAI should not adopt the good practice. After all the BAI is to be an autonomous body and its composition should reflect the autonomy. If the secretaries of the various ministries are to be a part of the BAI, it will be reduced to just another department of the government of India.

While appointing BAI members, care must be taken to see that their objectivity is beyond question. As given in Section 3(8), 'The part-time members shall be from amongst the persons of eminence in public life having knowledge or experience in one of the fields of education, literature, sports, culture, art, film, music, dramatics, broadcast programme, information management, communication, law, finance, administration, journalism and business management.'

Particular care must be taken to ensure that such members' commercial interests, if any, do not clash with their functions as members of the BAI.

The next issue relates to the category of persons who shall be given the licence. Here it has been provided in Part I of the Schedule that '[a] a body (other than a local authority) which has in its last financial year received more than half its income from funds; [b] a body which is controlled by a body referred to in clause [a] or by two or more such bodies taken together; and [c] a body corporate in which a body referred to in clause [a] and [b] is participant with more than 5 per cent interest will be disqualified because they are publicly funded bodies.

I do not see why this restriction should be imposed. In many socially significant sectors, non-governmental organisations play an important role and they may be publicly funded bodies. Why should NGOs be prevented from getting a broadcasting licence because of this condition. In fact the use of radio could lead to many healthy activities. For example, there could be an NGO concerned with education; why should it not be permitted to have its own FM broadcasting station? The same could be true with NGOs connected with environmental protection or public health among other such causes.

Again, advertising agencies have been disqualified from having broadcasting licenses. I am not able to appreciate the rationale here. The advertising business is also a communications business. An advertising agency is perhaps more likely to be effective and persuasive in its programmes. There is no reason why advertising agencies should not be permitted to have a licence.

That brings me directly to restrictions on ownership as given in Part III of the Schedule and referred to Section 12(4). If we look at the world trends, we find that there is a tendency not only for the technologies to merge but also large companies in different areas of the media, either print or electronic, to come together. Time Warner is a case in point. Why should we prevent such developments from taking place in India?

We should think of Indian companies becoming multinationals and powerful media companies. By putting such restrictions on cross-holdings we are permanently creating a battalion of pygmies in the media and losing an opportunity to develop strong Indian media MNCs.

As far as media software is concerned, India perhaps produces the largest number of films and with the exploding number of television channels we have seen the blossoming of talents. But cross-holding restrictions are preventing the advantage of synergies and also optimum use of the financial resources of those who will be investing in the sector.

Consider the explosive growth of the Reliance Group. We find that backward and vertical integration have played a significant role in the success story. Why should we, in the name of checking monopoly, place such restrictions?

Let us go back to the Broadcasting Bill's statement of objects and reasons which mentions about broadcasting services becoming competitive in terms of quality and cost of services and use of new technologies.

When we have a separate legislation for checking monopoly through the Monopolies and Restrictive Trade Practices Act and the MRTP Commission, why should we further indulge in ideological legislative overkill by bringing in this concept of monopoly control in the Broadcasting Bill.

In fact, the Bill, by focusing on control and restrictions, seem to go against the fundamental spirit of a Supreme Court judgement. In the Hero Cup case the apex court of law had directed the government to come up with a legislation regarding broadcasting liberalisation, arising from Article 19 of the Constitution. What we have now is more dominated by the control and licence mindset. The path to hell is paved with good intentions.

Section 12(3) mentions that no person shall be granted licence for more than one category of services specified in Part II of the Schedule. What is the rationale for such a restriction? The core competence in broadcasting will improve if opportunity is given for any service provider to use different means of broadcasting so that there will be advantages of economies of scale and also better competition.

When the global trend is for larger companies to emerge, we should take care not to provide in our BAI Bill provisions to cripple our Indian broadcasting companies permanently and ensure that they remain only bonsai companies. We must not kill the possibility of the emergence of Indian multinational media companies.

The same restrictive mentality is reflected in Section 17 where the Bill says that 'The authority shall grant two licences for local delivery service for each telecom circle as identified for the purposes of this subsection provided that the authority on technical or administrative grounds may restrict or widen a telecom circle for the purposes of this subsection.'

The fundamental difference between telecommunication and broadcasting is that broadcasting is one-way and it is done far more economically throughout the country than telecom which means two-way communication.

The corresponding investment and infrastructure needed are different for broadcasting and telecom. To import the telecom circle concept in broadcasting would mean that we are not appreciating the fundamental nature of difference between telecommunication and broadcasting.

In fact, when I became chairman of the Telecom Commission one of the issues I raised while provoking people to think was to ask why we could not have telecommunication on demand?

I recalled the success we had in television coverage in 1984. There was a tremendous boost given to the area under coverage in television in India by going in for low-power transmitters which were installed at the rate of one per day. I was told by the Department of Telecommunications technocrats that broadcasting was easier as it was a one-way effort and that telecom will be difficult as it is a two-way street.

I am afraid the introduction of the telecom circles concept may ultimately result in a broadcasting scam of the type we saw in telecom unless we take special care to avoid it. I find no technological justification for the telecom circle concept at all.

Another issue I would like to raise is why restrict the licences to only two? Why not have more players especially when the statement of object and reasons says that the object of the bill is to promote competition?

I am afraid, the provisions of the Broadcasting Bill, as of now, are designed to achieve the opposite of its very own statement of objects and reasons.

Learning from our telecom experience we should see that the BAI also does not fall into the tender trap. Every aspect of broadcasting should be gone into to see whether there is need for going in for tender for issuing licences or whether entry conditions can be defined and the market forces allowed to operate.

The more I see the way tenders are organised in our country, the more I feel that if we want real liberalisation and healthy practices, we should lay down the entry conditions and allow the market dynamics to do the rest.

It is an excellent development that the government has made the Broadcasting Bill the subject of a wide ranging debate. I am sure a healthy consensus will emerge at the end of this debate and the final Broadcasting Act will give the industry the desired boost.

N Vittal is chairman of the Public Enterprises Selection Board. However, he is best known for his tenure as the secretary of the Telecom Commission and the many revolutionary policies he introduced.

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