Cross holding restrictions in DTH to continue till a holistic decision on cross-media is taken: Rathore

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MUMBAI: The ministry of information and broadcasting (MIB) has accepted the Inter Ministerial Committee’s (IMC) recommendation to continue with the existing cross holding restriction in the guidelines for direct to home (DTH) operators.

While discussing the Telecom Regulatory Authority of India’s (TRAI) recommendations on consultation paper related to ‘Issues related to New DTH License’, the IMC noted that the matter of cross-holding in DTH has to be taken into consideration in the larger context of other TRAI recommendations on cross-media holdings.

In the existing DTH licence guidelines, the authority has imposed a restriction of 20% on cross-media holdings. A broadcasting or a cable TV company cannot hold more than 20% stake in a DTH company. Similarly, a DTH company cannot own more than 20% in a broadcasting or a cable TV company.

The TRAI had furnished its recommendations on “Issues relating to Media Ownerships” to the ministry on 12 August 2014 while the one related to ‘Issues related to New DTH License’ was issued on 23 July 2014.

The MIB has constituted an IMC to process the recommendations received from TRAI. The IMC examines the recommendations of TRAI and provides its comments/recommendations for approval of the ministry.

“IMC while discussing the TRAI’s recommendations dated 23.07.2014 on ‘Issues related to New DTH License’ has observed that the matter of cross-holding in DTH has to be taken into consideration in the larger context of other TRAI recommendations on cross-media holdings,” minister of state in the ministry of information and broadcasting Rajyavardhan Rathore said in the Rajya Sabha.

“Hence, the IMC recommended that the restrictions in the existing guidelines may continue till the matter is holistically resolved. The recommendations of IMC on the issue have been accepted by this Ministry,” he further.

Rathore also said that the ministry is weighing in on the TRAI recommendations on cross-media holdings.

“Further, this Ministry is also concerned about the recommendation of TRAI regarding cross-media holdings with an objective to ensure plurality of news and views and availability of quality services at reasonable prices to the consumers,” he stated.

In its recommendations on ‘Issues related to New DTH License’, the authority had liberalised the cross holding restrictions by allowing broadcasters to own a distribution platform (DPO). However, no broadcaster can own more than one DPO.

The recommendations have implications for broadcasters Star India, ZEEL, and Sun TV Network. For Star, it will be a positive move as it can increase its stake in Tata Sky. ZEEL and Sun TV, whose promoters have interests in both cable TV and DTH, will have to choose between one of the two platforms.

However, the authority in its recommendations has imposed several restrictions on vertically integrated companies to ensure a level playing field.

One is that vertically integrated DPOs cannot exceed 33% market share. The relevant market for DTH is the whole country while in case of cable it is a state. Further, vertically integrated entities cannot do fixed fee deals. The deals can only be on a cost per subscriber (CPS), which has to be non-discriminatory.

In the recommendations on ‘Issues related to Media Ownership’, the regulator had suggested keeping government out of TV broadcasting sector. It had also sought a ban on private treaties between media companies and business houses.

It had also recommended imposing restrictions on media companies that have a market share of 32% in TV news and print segment. If any company crosses the threshold then it will have to dilute its control in one of the two segments.

Defining control, the authority said that an entity is said to ‘control’ another entity if it directly or indirectly through associate companies or subsidiaries owns at least 20% of total share capital.

The TRAI had even sought ownership restrictions on corporates entering media. It had also batted for a common media regulator for TV and print.


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