TRAI: Broadcasters cant be distributors

Televisionpoint.com Correspondent | New Delhi
Restrictions on vertical integration in the media and entertainment sector is in the offing. The Telecom Regulatory Authority of India (TRAI) has recommended that broadcasters should not be allowed to own more than 20 per cent in television distribution platforms such as cable, direct-to-home (DTH), multi-system operator, headend-in-the-sky (HITS) and mobile TV platforms.

TRAI also suggests that the broadcaster should have no control in the distribution and vice versa. The recommendations, to ensure plurality and diversity of views, will be examined by the Information and Broadcasting (I&B) Ministry.

If approved, companies such as the Essel Group, Star India, Sun TV Network, which are both TV broadcasters and distributors might have to wind down their holding in one of their businesses. The regulator has proposed that such companies are given three years to restructure their business.

TRAI says it would rather "put timely safeguards than look for corrective measures which become difficult for the industry to align in future."

The Essel Group, engaged in broadcasting, DTH, cable and HITS will have to ensure that common promoters of its cable business WWIL and Zee Entertainment do not own more than 20 per cent.

Star India owns about 23 per cent stake in Hathway and owns 20 per cent in the DTH business Tata Sky. Kalanidhi Maran, CMD, Sun Network, and his family own 80 per cent of Sun Direct.

TRAI's recommendations will apply to any "individual, a group of persons, a public or private body corporate, a firm, a trust, or any other organisation or body and also to include 'inter-connected undertakings' as defined in the Monopolies and Restrictive Trade Practices Act."

TRAI points out that certain developed countries have cross media ownership, some of which have been recently reviewed and retained, the industry has opposed the move. "It was clarified by the Ministry that looking at the increasing trend of the print media entering into broadcasting sector, the issue needs to be examined in its entirety." TRAI says.

TRAI hasn't recommended any restriction on horizontal integration, that is, a print player can also enter radio and TV sectors. The regulator has found "no emerging threat of market failure" in this.

In other words, there is enough competition in these sectors to rule out the emergence of monopolies. However, TRAI has stressed on the need for plurality and competition and has suggested to the I&B Ministry that it carry out a market survey to ensure plurality.