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India – Media Updates.

23 October, 2014

 

  • The Telecom Regulatory Authority of India (‘TRAI’) has, on July 23, 2014 issued significant recommendations to the Ministry of Information and Broadcasting (‘MIB’) on a new Direct-To-Home (‘DTH’) licensing regime such as:

 

i. Period of DTH License be increased from 10 to 20 years, renewable by 10 years. One
time entry fee be retained at ¤ 100 million and the existing license fee be reduced from
10% of gross revenue to 8% of the adjusted gross revenue.

 

ii. Set top box offered by DTH service providers to comply with the specifications issued by the Bureau of Indian Standards.

 

iii. Broadcasters and Distribution Platform Operators (‘DPOs’) to be separate legal entities.

 

iv. In respect of vertically integrated entities: (a) the entity that controls a broadcaster may control only 1 DPO of any category and vice versa; (b) the entity that controls vertically integrated DPO may not control any DPO of another category; (c) If a vertically integrated DPO acquires a market share of more than 33% in a relevant market, then such vertically integrated entity is required to restructure to ensure that the DPO and broadcaster are no longer vertically integrated; (d) a vertically integrated broadcaster can have only charge per subscriber basis agreements with various DPOs; (e) a vertically integrated DPO should not reserve more than 15% of channel carrying capacity for its vertically integrated broadcaster(s).

 

v. In respect of horizontally integrated entities: The entity controlling the DPO should not control any DPO of another category.

 

  • TRAI has, on August 12, 2014, issued recommendations to MIB inter alia on the issues relating to media ownership and control including inter alia the following:

 

i. Entity (E1) should be said to be in ‘Control’ of another entity (E2), if E1: (a) owns at least 20% of the share capital of E2 (directly or indirectly); (b) has not less than 50% of the voting rights in E2, appointing more than 50% of the members on the board of E2 or controlling management through decision making in strategic affairs and appointment of key managerial personnel; or (c) is a party to arrangements that enable E1 to control business decisions taken in E2.

 

ii. Cross media ownership: (a) ‘News and Current Affairs’ should be considered a relevant genre, and television and ‘print’ should be considered as relevant segments in the product market for formulating cross-media ownership rules; and (b) a ‘relevant geographic market’ should be defined in terms of the language and the State(s) in which that language is spoken in the majority.

 

iii. Internal plurality: (a) Political bodies, religious entities, publicly funded bodies, governments etc. and their surrogates are to be barred from entry into broadcasting and distribution sectors; (b) private treaties such as advertising in exchange for equity etc., are to be prescribed and restricted; (c) a clear disclaimer should be mandated in advertorials; and (d) on “paid news” the liability will be on the broadcaster and media entities.

 

AZB

 

For further information, please contact:

 

Zia Mody, AZB & Partners
zia.mody@azbpartners.com

 

Abhijit Joshi, AZB & Partners 
abhijit.joshi@azbpartners.com


Shuva Mandal, AZB & Partners 
shuva.mandal@azbpartners.com

 

Samir Gandhi, AZB & Partners
samir.gandhi@azbpartners.com


Percy Billimoria, AZB & Partners 
percy.billimoria@azbpartners.com

 

Aditya Bhat, AZB & Partners 
aditya.bhat@azbpartners.com

 

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