Down-sizing foreign equity

By restricting the foreign equity component of news channels to 26 per cent the government has put a spanner in the works of many ventures eager to rule the airwaves, especially the Rupert Murdoch-owned Star News channel.

RUPERT MURDOCH's media empire, which girdles the globe, has received a definite setback from the revised uplinking policy formulated by an increasingly vigilant government. Ending months of speculation, the Union Cabinet decided to impose a cap of 26 per cent on foreign investment in news channels that seek to uplink from India, putting television news on the same footing as print media. This move effectively derails the Murdoch-owned Star TV's attempt to break into the 24 hours news segment on its own.

Until now, there was no separate uplinking policy for channels in the news and current affairs category. Since Gujarat and the perceived lack of regulation in television news, administering the airwaves has become something of a priority with the government. Announcing the new guidelines, Ravi Shankar Prasad, Union Minister of State for Information and Broadcasting, said that 47 out of about 100 currently available channels are news channels and 16 are 24-hour networks, and eight applications by news channels are pending. Significantly, the news and current affairs category includes all channels that have any kind of news component, like a daily bulletin.

Satellite uplinking facility was opened to private players a couple of years ago and the policy was gradually eased to accommodate all broadcasters, irrespective of ownership or content of broadcast. By 1999, all Indian companies were allowed to uplink through their own earth stations, and in July 2000 this right was extended to foreign companies as well, without formulating different sets of rules for news and entertainment. However, the Star News application in October 2002 was the first time that a foreign-owned all-news network applied for an uplinking licence. Almost at the end of their contract with the Indian-owned New Delhi Television (NDTV), which had editorial control of the channel, Star sought permission to uplink its own directly controlled news channel starting on April 1. Considering the delicacy of the situation, the Information and Broadcasting (I&B) Ministry referred the issue to the Union Cabinet. "News channels are a sensitive area," said Parliamentary Affairs Minister Sushma Swaraj who was then in charge of the I&B Ministry. Later, CNBC India and the British Broadcasting Corporation (BBC) also applied for permission to uplink from India.

While the Home Ministry favoured granting uplinking licences to companies with foreign equity holding up to 49 per cent, the Telecommunications Ministry was of the opinion that foreign news channels should be allowed to uplink freely from India, and there was no need for a separate set of rules. However, the Ministry of External Affairs finally won out, pushing for a 26 per cent cap on foreign equity holding, including that of foreign institutional investors, overseas corporate bodies and non-resident Indians. In addition, to make the restrictions meaningful, the Cabinet asked the Communications Ministry to toe the policy line while granting VSAT clearances for broadcasting. "Earlier, channels that were denied permission by the I&B Ministry were getting it for point-to-point transmission via VSATs through the Communications Ministry," Sushma Swaraj pointed out.

Facilities for live news coverage, footage collection and transmission will only be given to channels uplinking from India. Eligibility conditions state that the company has to be registered under the Indian Companies Act, the chief executive officer (CEO) and the channel head have to be resident Indians, and editorial control should securely rest in Indian hands. Also, in order to squelch local content provider fronts, channels that seek such an arrangement have to ensure that these are accredited with the Press Information Bureau before they are granted the right to collect and transmit footage. However, commentators note that unlike the restrictions on the print media, in whose case an individual Indian partner has to own 51 per cent, this policy does not conclusively rule out foreign control.

Channels like BBC and CNN have been kept out of the policy's ambit, and will get permission to cover live events in India on a case-to-case basis. Along with Star News, channels like CNBC, which currently uplink from outside India, say Hong Kong or Singapore, have been granted a three-month period to figure out a suitable shareholding pattern, while existing news networks like Zee News will be given a year's time to divest themselves of their foreign stake to comply with the new norms. The Ministry denied that this transitory arrangement was aimed at any specific channel, but that it intended to give Indian companies an edge in newsgathering and broadcasting. News channels that were awaiting uplinking rights included the TV Today Network (proposing to launch an English news channel), NDTV World for a Hindi news channel, and Independent News Service (INS). A cap of 26 per cent, of course, means sweeping changes in the existing shareholding pattern for almost all existing news channels, noted a media analyst. Zee News, for example, will have to bring its foreign equity level to 26 per cent from the current 55 per cent. CNBC India, a joint venture between Television Eighteen Ltd. and CNBC Asia, will also have to reduce its foreign equity level. According to senior partner Sanjay Roy Chowdhury, they were expecting this decision. "It was a toss-up between 26 per cent and 49 per cent, and we were prepared for this announcement," he said, adding that they were working out a comprehensive corporate restructuring plan.

For Star News, this is definitely a dispiriting turn of events. However, with only three months to dilute its foreign stake to acceptable levels, the star-crossed channel chose to remain upbeat and go ahead with its April 1 launch. It had already put in place a news team and other infrastructure. Industry sources add that Star India teams have been making presentations to advertisers with demo tapes on the look and feel of the new Star News channel. Whatever the decision on the uplinking guidelines, they maintain that on April 1 they were prepared to have Star News beaming programmes into Indian homes, even if it means having to uplink out of Hong Kong as a stop-gap arrangement. Ravina Raj Kohli, president of Star News, was tightlipped about any joint-venture partnership plans, saying that Star News welcomed the guidelines and would abide by them, as it sought a fresh uplink permission. When asked if this development would affect the control and content of Star News, she replied with an emphatic no. "Star News is committed to unbiased and credible news coverage for the Indian public. We plan to continue our uninterrupted news service for our audiences," she said. Uplinking from India means, news transmission is a matter of instants. However, uplinking from Hong Kong would cause a delay of a couple of hours and make it difficult to telecast breaking news and make live coverage impossible. In a medium where immediacy is everything, that is a situation it could have done without.

WITH the launch of several new channels, the broadcasting industry has been preparing for a major upheaval. In the last few months, channel-surfing acquired a whole new meaning as top anchors, reporters and producers shifted between networks with dizzying rapidity. For the first time, Indian audiences will be offered a choice of more news channels than general entertainment channels. With an already shrinking advertisement revenue to be shared among seven national news networks, the industry is set to witness a large-scale shakeout. According to Sandeep Vij, a media analyst with Optimum Media Solutions, Star News enjoys "the biggest advantage in terms of the promotional and distribution support of Star Network". However, he felt that Aaj Tak, being a mass Hindi channel, would be difficult to dislodge. He added that the "strong experience and learning" that backed NDTV would ensure its place in the English language segment, despite initial distribution glitches, but that Aaj Tak (English) could pose a serious challenge. To sum up the shakeout, he made the point that their coverage of big events in the next two or three months "would clearly showcase the edge of one channel over the other".

Explaining the new guidelines, the I&B Minister stressed that the Indian policy remained one of the most liberal. Even Murdoch strongholds like Australia and the United States restrict foreign participation at 20 and 25 per cent respectively. If Star News had been granted unrestricted entry into India, it would have fitted in nicely with Rupert Murdoch's best-laid plans. Known to be a conservative, he combines his right-wing politics with a tabloid mentality, and this lethal combination is faithfully reflected in all his media holdings. The Fox News network and the newspaper The New York Post in the U.S., The Times and The Sunday Times newspapers and Sky Broadcasting in Britain, Star News in Asia, and many more companies, which together constitute the media behemoth called Newscorp, ensure that the sun never sets on the Murdoch empire.

So, while a frighteningly huge proportion of what the world sees and hears is controlled by one family, globalisation is still pitched as a heady communications revolution promising freedom instead of monopolisation and control. Of course, it is undeniable that a medium like the Internet, with minimal entry barriers, connects the world on a largely level platform. However, instead of democratised information and communication, the broadcast industry is a one-way street, run by oversized media conglomerates swamping a largely passive audience. This becomes a doubly damaging fact in the case of the news and current affairs sector, which structures public opinion.