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MIB moves a step closer to FM Phase III auctions, releases GOPA

MUMBAI: The Ministry of Information & Broadcasting (MIB) has finally released the migration grant of permission agreement (GOPA) for FM radio broadcasters, fuelling hope that the Sun TV issue would be resolved by next week, paving the way for the Phase III auctions.

The MIB has released the GOPA for new Phase III entrants, as well as for players operating FM radio service in Phase III on migration from Phase II.

A source informed TelevisionPost.com that since the auctions are to be completed by August–September and the MIB would need a month to calculate the migration fee and other rates for the auctions, the GOPA is an indication of the MIB’s willingness to commence the process of auctions.

The two GOPA’s will be signed by the respective players once the auctioning process is over and the migration fees for Phase III is determined as per the calculation formula suggested earlier.

The GOPA will require the new entrants to pay a non-refundable one-time entry fee (NOTEF) for the auction. Existing players migrating to Phase III will pay a non-refundable one-time migration fee (NOTMF) and the move to Phase III will come into effect from 1 April 2015.

As per the agreement, the permission-holder will have to pay an annual fee to the grantor every year, charged at 4 per cent of gross revenue of its FM radio channel for the financial year, or 2.5 per cent of the NOTEF for the city, whichever is higher.

The annual fee must be paid in advance on quarterly basis in four equal instalments within the first fortnight of each quarter of a financial year. For this purpose, the four quarters will be tri-monthly periods beginning 1 April, 1 July, 1 October, and 1 January.

For the existing players, the first year’s fee for 2015–16 will become payable in one lump sum within 15 days of signing of the agreement based on the gross revenue for the previous financial year, or the last year for which the gross revenue has been determined, or the NOTEF formula, whichever is higher.

Meanwhile, for the new entrants, the first year’s fee will become payable with effect from the date of operationalisation of the channel. The permission-holder will be required to initially pay advance quarterly instalments calculated on the basis of the minimum prescribed percentage of the NOTEF till the end of the financial year and even beyond till the determination of the first year’s gross revenues.

In the event of the permission-holder’s failure/inability to operationalise the channel within the prescribed time, the grantor will have the right to recover the annual fee for the first year and all the years of such failure/inability as a lump-sum payment. In the event of default by the permission-holder, the grantor will be free to invoke the performance bank guarantee furnished by it.

The GOPA further states that the permission-holder may resort to outsourcing of content production as well as leasing of content development equipment as long as it does not impact the permission-holder’s right as FM broadcaster.

Moreover, the permission-holder will be required to fix or modify the ‘channel identity’, which is the brand name of the FM radio channel, only after prior approval of the grantor.

The permission-holder must obtain security clearance of all foreign personnel likely to be deployed for over 60 days in a year by way of appointment, contract, consultancy, or in any other capacity for installation, maintenance, operation, or any other services prior to their deployment. The permission will be subject to permission-holder remaining security cleared throughout the currency of permission. In case the security clearance is withdrawn, the permission granted will be liable for immediate termination.

For new players, the permission-holder will be liable to install the radio station and take action to obtain wireless operating licence (WOL) and operationalise the channel within a period of 12 months from issue of the letter of intent (LOI).

A channel will be regarded operational from the date of launch of its commercial transmission (with or without advertisement) on a fixed /regular transmission schedule after the test transmission, if any, which must not normally exceed 10 days, is over.

The radio players will also broadcast public interest announcements as may be required by the Central/state government concerned for maximum of one hour per day. Moreover, the radio operators must ensure that at least 50 per cent of the programmes broadcast by it are produced in India.

The radio operators will be permitted to carry the news bulletins of All India Radio in an unaltered format on terms and conditions as may be mutually agreed with Prasar Bharati.

An entity will be permitted to network its channels on its own network within the country. However, it is also to be ensured that at least 20 per cent of the total broadcast in a day (from 0000 to 2400 hours) is in the local language of that city and promotes local content.

The players will be required to submit details on their FM broadcast facility, including permission and installation.

The GOPA’s also require the radio operators to submit the complete address, details of programme content, public complaints, details of equity, final accounts, and audit certificates.