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TRAI seeks ownership restrictions on corporates entering media, bats for media regulator for TV and print
MUMBAI: The Telecom Regulatory Authority of India (TRAI) wants to clean up media outfits from the dirt of paid news and is in favour of a single media regulator for television and print.
Ownership restrictions on corporate bodies entering the media sector, banning private treaties, and disclaimer norms for advertorials are some of the recommendations that the TRAI has come out with.
Ownership restrictions on corporates
Taking into account the inherent conflict of interests, TRAI has recommended that ownership restrictions on corporates entering the media space should be seriously considered by the government and the regulator.
This may entail restricting the amount of equity holding/loans by a corporate house in a media company to comply with provisions relating to control.
If approved by the government, this regulation can shake up several media companies as they are owned by corporates having varied business interests. Reliance Industries Ltd (RIL), for instance, owns TV18 while Aditya Birla Group has a sizeable stake in Living Media, which owns the India Today Group of publications and has a majority stake in TV Today Network.
While noting that the majority of media companies are unlisted, and it is not easy to get their ownership details from the database of the Registrar of Companies, TRAI is of the view that detailed data on ownership is crucial to understand the extent of corporate and political ownership in the media.
As of now, given the lack of transparency on ownership information, there is no way to ascertain to what extent the news we receive is untainted, the authority pointed out.
In what can be a negative impact on The Times of India Group and HT Media, the TRAI wants private treaties to be banned. Though this practice is nascent in TV news media, it has the potential of growing to some size.
The practice of ‘private treaties’ (trading ads for equity) has raised quite a few eyebrows in the past. However, it is for the first time that there has been an outright censure and that, too, from a regulatory body like the TRAI.
The broadcast sector regulator, which was directed by the Ministry of Information & Broadcasting (MIB) to look into the issue of cross-media ownership, has observed that the practice of ‘private treaties’ should be banned immediately through orders of the Press Council of India (PCI) or through statutory rules and regulations ,given the inherent conflict of interests arising from such practices.
TRAI further stated that the ban would cover all forms of treaties including (i) advertising in exchange for the equity of the company advertised; (ii) advertising in exchange for favourable coverage/publicity; (iii) exclusive advertising rights in exchange for favourable coverage.
“To what extent the editorial is actually independent and how thin is the line between the newsroom and the boardroom? The second problem with media corporate ownership is this business of advertorials, private treaties. I am sorry to say it has reached a scandalous position. You cannot carry on by passing off advertisements as news,” TRAI chairman Rahul Khullar stated.
Private treaties is referred to as an agreement between the media company and another non-media company in which the latter transfers certain shares of the company to the former in lieu of advertisements, space and favourable coverage.
The authority noted that ‘private treaties’ could be in various forms, such as advertising in exchange for equity of the advertising company or in exchange for favourable coverage. They could also take the form of giving favourable coverage to companies in exchange for exclusive advertising rights. Other innovative forms of private treaties could also exist.
The authority noted that the Securities and Exchange Board of India (SEBI) has also put in place disclosure norms for media companies to disclose the following list of disclosures to the PCI to safeguard the interests of the investors.
Advertorials and paid news
On the issue of advertorials, TRAI recommended that a clear disclaimer should be mandated, to be printed in bold letters, stating that the succeeding content has been paid for. This should be for all paid content.
While making it absolutely clear that placing such a disclaimer in fine print will not suffice, the authority recommended that such action on advertorials and other material which is paid for may be taken up immediately.
On ‘paid news’, in addition to the above, the authority stated that it is imperative that liability reposes in both parties to the transaction if it is tried to be passed off as news.
For instance, if an MP/MLA sought favourable coverage in the media in exchange for payment and if such coverage was given in the guise of ‘news’, the responsibility would be that of both parties, not only the politician.
Single media regulator for TV and print
TRAI has also stated that there should a single ‘media regulator’ for television and print to entertain complaints on paid news, private treaties and issues related to editorial independence like investigating the complaints and having the power to impose and enforce an appropriate regime of penalties.
While asserting that the government should not regulate the media, the authority has also recommended that the media regulator should consist of eminent persons from different walks of life, including the media.
It should be manned predominantly by eminent non-media persons. The appointments to the regulatory body should be done through a just, fair, transparent and impartial process.
TRAI recommended that editorial independence must be ensured through a regulatory framework. It also noted that there is a need for a comprehensive evaluation of the legislative and legal framework in order to establish a robust institutional mechanism for the long term.
The authority, therefore, recommends that a commission, perhaps headed by a retired Supreme Court Judge, be set up to comprehensively examine the various issues relating to the media, including the role and performance of various existing institutions, and the way forward.
It also pointed out that more than five years have elapsed since the release of its ‘Recommendations on Media Ownership’ on 25 February 2009. The situation has become graver. Clear timelines may, therefore, be indicated to the commission so appointed.
Regarding privacy issues in the media, the authority is acutely conscious of the structural imbalance that places unbridled power in the hands of the media and offers almost no protection to the individual who values her privacy. The rampant trampling of individual privacy by the media needs both strict and updated laws and also strong, enforceable guidelines on ethical behaviour.
The above recommendations, once implemented, will address the immediate objective of curbing unhealthy media practices, TRAI said.