Broadcasters at war

As several Indian satellite channels join the turf war against Star News on the uplinking licence issue, the government, armed with a policy full of loopholes, watches helplessly.

Some people are saying that Star is making a monkey of the law. I say that they are making a monkey of a law that is already an ass.

- Sashi Kumar, chairman, Media Development Foundation.

THE controversy over the Rupert Murdoch-controlled Star News' compliance with Indian regulations setting limits on the extent of foreign ownership of satellite news channels uplinking from India appears to be dissolving into a soap. The government has egg on its face, having to rescue a policy that is hopelessly mired in contradictions. Star's rivals in the media business, gathered in a grand alliance, have raised the pitch, demanding that the government prevent foreign media companies (read Star) from using the device of shell companies to violate, in letter and spirit, the regulations issued on March 26. Those with less interest in the turf battles of the media companies have articulated a more nuanced set of objections, focussing on the manner in which the government has allowed its media policy, or whatever else it may be called, to be crafted under pressure from big money in the media business.

The government, besieged from all sides for having established a policy that leaks like a sieve because of its multiple loopholes, has deployed its senior Cabinet Ministers to rescue whatever remains of it.

Whether Star News, structured as it is now, should or should not get the licence to uplink is not the crucial issue. Instead, at stake is the fundamental question whether foreigners can own and control media outlets - in whatever medium - in India. The issue gained media attention in late June when the "grace period" given by the Information and Broadcasting (I&B) Ministry to Star, to dilute foreign stake in MCCS, the company which applied for the uplinking licence, was about to end. The crux of Star's restructuring exercise, a common occurrence in the corporate world, was the formation of MCCS as a holding company in which Star's promoter's stake was reduced to 26 per cent, while transferring the remaining stake to "friendly" partners (Frontline, August 1). The result of the restructuring exercise meant that Suhel Seth, the CEO of an advertising company, came to hold a stake of 30 per cent in the company, the highest by any single entity.

The I&B Ministry, clearly under pressure from Star's adversaries, sent Star a long list of questions on which it wanted "clarifications". The queries centred on how the companies were structured, how the shareholding was dispersed, and on what terms they were issued. In particular, Star's response would have enabled the government to determine whether foreign entities controlled Star News. Star is reported to have sent a 600-page docket to the Ministry on July 22. Meanwhile, the channel received several temporary extensions of its broadcasting licence. Star also obtained an anticipatory stay from the Bombay High Court, restraining Videsh Sanchar Nigam Ltd (VSNL) from disconnecting its uplinking facility if the government directed it to do so.

Meanwhile, Star also hit back at its business rivals. It focussed its ire on two groups, The Times of India and India Today, both of which had been critical of Star News' violation of the norms governing the uplinking of news channels. In an "open letter", issued as a full-page advertisement and published in several leading Indian dailies on July 21, Star pointed out that the two publications had refused to publish its version on the issue. Moreover, it pointed out the conflict of interest the two groups had in the matter.

Regarding The Times of India's allegation that Star controlled the FM broadcaster Radio City, Star pointed out that The Times group, by virtue of owning Radio Mirchi, was competing with it in the radio broadcasting business. In its letter to The Times of India, which Star claimed was not published by the newspaper, Star pointed out that since The Times of India was in both the print and radio broadcasting segments of the media business, it had a "vested interest" in the way it articulated its position on foreign direct investment (FDI) in the radio broadcasting business. Star also poured scorn on India Today, which controls the Aaj Tak Hindi news broadcasting channel, pointing to the obvious conflict of interest that the magazine had in criticising Star on the uplinking issue. Star pointed out that Aaj Tak had been losing its market share to Star News in recent weeks. It also pointed to the India Today group's obvious conflict of interest in the subject because of its radio operations, through Red FM.

On July 25, the 18 media barons, representing several prominent media groups, announced the formation of Indian Media Group (IMG), aimed at lobbying the government to "make policy guidelines more stringent and rugged to prevent any manoeuvring and manipulation". Among the participants were of course representatives of both The Times of India and the India Today group. The chairman of the Zee group, Subhash Chandra, considered a bitter rival of Star TV, was also present in New Delhi on the occasion.

The IMG demanded a "uniform and comprehensive" policy on foreign investment in all segments of the media - print, TV and radio - setting a uniform cap of 26 per cent on foreign holdings. The IMG also demanded that 51 per cent ownership - effectively meaning full control - be in the hands of "one Indian family or Indian group". It also sought controls ensuring that "content creation, distribution and overall management" be in the hands of a single entity holding the licence for operations in any medium. Although Star was never mentioned by name, the IMG demanded that the government "probe the source of funding" so that "proxy control by Indians acting as decoy shareholders for foreigners" did not happen in the media business. The IMG also sought the forthwith implementation of Conditional Access System (CAS) for cable TV in the country.

Meanwhile, the government changed tack, realising that Star's corporate structure, as governed by the provisions of the Companies Act, could not be really found to be amiss. On July 26, the Inter-Ministerial group comprising representatives of various Ministries involved with Star's application for uplinking reportedly examined the agreements which MCCS had entered into with various companies and entities to source content. This exercise is said to have been undertaken to examine who exerts control over the editorial operations of Star News. The logic is that this would determine whether Star News' structure is in line with the spirit of the March 26 regulations, which were meant to prohibit foreigners from exercising controlling interest in news operations of TV channels. Meanwhile, the Group of Ministers (GoM) - comprising the Minister of State with independent charge of the I&B Ministry Ravishankar Prasad, Finance Minister Jaswant Singh, and Law Minister Arun Jaitley - is said to be discussing the broad contours of a comprehensive media policy and reworking the Convergence Bill whose passage has been pending for a long time. Meanwhile, as Star News' fate hangs in balance, the government is buffeted by a fresh bout of lobbying from Indian media players.

IRONICALLY, the controversy has little to offer to those who have consistently opposed the phenomenon of "Murdochism", as opposed to a specific anti-Murdoch stance aimed at turf-protection of those in the media business. As Sashi Kumar, a perceptive media critic, who has had a long stint in the TV medium, pointed out to Frontline: "Murdochism, apart from the fact that it dumbs down and tabloidises the media, also exemplifies the concentration and monopolisation of media power." Over almost 50 years the contours of the debate whether foreign owners should control the levers of the print medium, have been determined by a few propositions, which recognise it not merely as a commercial activity. Whenever the issue came up, as it did at several points in the history of the medium since Independence, it has always been decided in favour of "protection".

The reasons for upholding the Cabinet media policy decision of 1956, which still determines the official Indian line on the issue, was based on several considerations. For one, the freedom of the press, a concept that flows out of the democratic notion of freedom of speech, while being a cardinal principle governing the functioning of free media, is simply not available to foreign nationals. Thus, foreigners operating the levers of the media would simply be unable to enjoy the most basic of freedoms. In effect, the adversarial function of free media, which is what any self-respecting media house would stand up for, would simply not be available to a foreigner. Of course, if commerce is the guiding factor, the issue would matter little to foreign media houses.

The Star News' CEO Peter Mukherjea, in a recent interview to a business daily, criticised its former content provider, New Delhi Television (NDTV), for having been "one-sided" in the coverage of "certain issues". It is common knowledge in media circles that Star News' coverage of the organised mass killings in Gujarat provoked the government. Peter Mukherjea's comments now indicate that the news channel is willing to make amends and refrain from playing an adversarial role in crucial national issues. The point here is that a foreigner-controlled news organisation may be more easily persuaded from playing the adversarial role, particularly because it has no moorings in the national ethos anyway.

Referring to those who welcome foreign investment in the print media but oppose it when it is in the electronic media, Sashi Kumar terms it "a Janus-faced approach to the whole issue". There is also criticism that those opposed to Star also avoid the issue of whether regulatory authorities should also impose restrictions on cross-media controls. Says Sashi Kumar: "This would be one of the major issues that the regulatory authority will examine. For example, can a person with a critical reach in print be allowed to get into the broadcast or cable or other media? The trend seems to be to dismantle all of this. For example, what the Federal Communications Commission (FCC) has done in the U.S. But even there opposition to this has been seriously challenged."

Sashi Kumar also points out that the evolutionary tracks of the print and electronic media have been very different. "Unlike the print media, the satellite revolution in India was actually led by the foreign media." After all, the cable revolution in India was led by CNN's coverage of the Gulf War of the early 1990s. Star was one of the first players in the field, ironically in partnership with Zee, which is now a bitter rival. Sashi Kumar points out that the foreign broadcasters played a major role "in prising open the Doordarshan-dominated market in India". "In effect," Sashi Kumar points out, "TV broadcasting experienced a different evolutionary path. It was unlike the case of the print media, where the process has travelled through time and space involving a learning curve."

While Indian media firms may be tempted to play the swadeshi card to protect one's own turf, it is important to recognise that a significant section of the Indian media has uncritically welcomed the liberalisation programme of the government, elements of which are now likely to hit it just as hard. Meanwhile, the retrogression is best epitomised by a media czar's comment some years ago that "news is what appears between advertisements".

Sashi Kumar argues that a cohesive and logical media policy ought to take into account not only India's tradition as an evolving democracy, but also concepts of social justice, while being legally sound. Instead, what passes off for media policy are a string of policy announcements, which increasingly suggest that the government's policies are crafted under pressure from a range of vested interests. Thus, in the hurry to open the doors to the entry of foreign-owned media houses, other issues have been relegated to the background. For instance, there is nothing in official policy that prevents concentration of media power in the hands of a few players. There are also no mechanisms in place to check the growing clout of cross-media holdings covering various media forms.

Regulations are expected to reflect a stated policy; the policy, in turn, is expected to reflect a stated political objective. But in this case, the government does not want to state, in political terms, what it is perhaps willing to allow through a flawed regulation. That, in any situation, would be interpreted as subterfuge.