DTH and some issues

The guidelines for direct-to-home broadcasts dilute the anti-monopoly restrictions on cross-media and intra-media holdings as envisaged by the Broadcast Bill that lapsed in 1997.

MUCH of the growth of the electronic media in India over the last decade occurred in a regulatory vacuum. With the government's broadcasting monopoly in headlong retreat against the insurgent entry of cable television, the only significant assertion of r egulatory authority came in late-1996, when direct-to-home (or DTH) broadcasts on the Ku-Band were firmly prohibited.

Following the recommendations of a Group of Ministers (GoM), the Union Cabinet in October decided that the ban had outlived its usefulness. DTH broadcasting has been opened up with immediate effect to all entrants who can demonstrate the necessary resour ces to qualify for a licence. The 1996 ban was decreed as a direct response to the Rupert Murdoch-owned Star TV network's effort to work its way through a lacuna in the regulatory framework and start DTH broadcasts in India. It was rightly perceived that Murdoch was attempting to run away with the ball and disrupt the entire process of framing a comprehensive law for the broadcast sector. The Union Cabinet's decision on November 2 to revoke the ban on DTH, though, is not quite so clear in its intentions , since a comprehensive broadcasting law - subsumed under the new technological mantra of "convergence" - is believed to be imminent.

Sources in the Ministry of Information and Broadcasting reject the notion that undue haste may have been shown in opening up the DTH sector. A senior official told Frontline that the decision was pending for long. And though the Broadcast Bill or Convergence Bill is likely to be passed into law within the next year, there was no need to hold DTH broadcasting hostage to the more complex process involved in formulating a comprehensive law.

The difficulties inherent in this attitude were pointed out by S. Jaipal Reddy, Congress(I) member of the Lok Sabha and former Minister for Information and Broadcasting. He argues that the guidelines issued by the government now constitute only a framewo rk for investment, not a policy. And one of the principal deficiencies of the prevalent situation is the absence of an autonomous licensing and regulatory authority. The government today is caught up in a situation rife with the potential for conflict of interest. Till a statutory broadcasting (or convergence) authority is set up with the requisite autonomy, the government would have to function as a licensing authority, in addition to being a broadcaster and a content provider. Experience from the tele com sector, Jaipal Reddy suggests, indicates that this does not make for a very smooth execution of policy.

In its specific provisions, the DTH guidelines that have been issued by the Ministry dilute some of the restrictions on cross-media and intra-media holdings that were conceived in the Broadcast Bill presented to Parliament in 1997. That Bill was referred to a Select Committee and only lapsed when the Lok Sabha was prematurely dissolved in December 1997. But clearly, in diluting the anti-monopoly spirit of the 1997 Bill the government today seems to have accorded higher priority to the pragmatic consider ation of attracting investment into the DTH sector. Information and Broadcasting Ministry officials say that DTH involves substantial volumes of investment which may not be within the reach of many companies. To impose a larger number of restraints in th e very beginning would only hobble the potential of the policy from the moment of its introduction.

Under the 1997 proposals, a satellite television broadcaster would not be entitled to bid for a DTH licence. Neither would a cable networking company be allowed entry into DTH or satellite television broadcasting. The policy now announced removes these b road restrictions, but holds down to 20 per cent the equity stake that a broadcast or networking company can have in a DTH entity.

Certain critics feel that this is not sufficient protection against monopolistic tendencies. The satellite TV broadcaster Zee Telefilms, for instance, has a substantial interest in the networking company Siticable. Under the 1997 proposals it would have been obliged to retrench its interests in one of the two enterprises. But the new DTH guidelines would not only enable it to retain its position in these two segments, but also enter DTH broadcasting.

Cross-media holdings constitute another area of concern. The 1997 Bill had laid down clear restrictions in this respect. A print media enterprise could not hold a stake in excess of 20 per cent in a company with a broadcasting licence. Nor could a broadc aster hold more than 20 per cent stake in a newspaper publishing company. The DTH guidelines now remove this category of restraints in their entirety.

The dilution of the anti-monopoly spirit of the earlier bill is, by all accounts, contrary to the ongoing deliberations of the advisory group on convergence law. In an interim report submitted earlier this year, the group on convergence had affirmed that the constitutional provisions on freedom of expression demanded that transmission media and content provision be treated separately. This led the group to advocate a "horizontal" form of regulation that would ensure that there would be no overlapping co mmercial interests at successive stages in the transmission of content to the audience. This notion of regulation was inherent in the 1997 Broadcast Bill, as typified by its restrictions on intra-media holdings.

A "vertical" notion of regulation was also similarly at work in the 1997 Bill, as embodied in its restrictions on cross-media holdings. The DTH rules now issued effectively blur the lines of both these categories of regulatory measures.

For the rest, the new guidelines stipulate that a DTH licensee should be an Indian company registered under the Companies Act and that the total foreign investment in it, inclusive of both debt and equity, cannot be more than 49 per cent. The equity comp onent itself would be limited to 20 per cent. Management control would be exercised by a board with a majority of representation being Indian. The chief executive too would necessarily have to be a resident Indian citizen. Though the broadcaster would be free to use a satellite of his choice, proposals involving the use of Indian satellite capacity would be given preference in the grant of licences.

An entry fee of Rs.10 crores would be paid by the licensee, who would then be liable to pay as annual fee to the Government 10 per cent of the total revenues earned. In contrast with the earlier ambiguity about satellite uplinking, the DTH guidelines obl ige the broadcaster to establish an earth station inside the country within a year of obtaining a licence.

The global audience for DTH services is today estimated at no more than 30 million. An assessment made by the I&B Ministry indicates that the audience within India could perhaps grow to about five million within five years of the start of DTH broadcasts. This leaves the core interests of the cable television segment relatively unharmed.

There have been proposals from advocates of the educational media that DTH could be used to ensure community television access in remote and rural areas. Despite the higher costs, they argue that the large bandwidth offered by DTH would enable the transm ission of much useful content to otherwise inaccessible areas. Admittedly though, this would require a degree of commitment from the regulatory authority to ensure that the appropriate kind of content is transmitted. Under the DTH guidelines, there are n o such stipulations, except the broad requirement that the broadcaster should conform to the programme code and advertisement code laid down by the I&B Ministry.

Licensees are obliged under the guidelines to provide access to various content providers and channels without discrimination. But with the overlapping of interests between satellite channels and DTH broadcasters, it is not clear how this clause will be enforced. Hardware could constitute another technique of curtailing access. The I&B Ministry proposes to discourage the use of proprietary hardware which would lock a subscriber into a narrow range of options, in favour of open architecture hardware whic h would allow him or her wide access. This would of course require the evolution of appropriate standards by the DTH service providers, and their agreement on ensuring mutual compatibility over time.