Private FM Broadcasting - Regulatory issues
-SPECIAL [BROADCASTING AND CABLE TV SERVICES]
Results, lessons and
recognition of problems from Phase I.
Open bid system, fixed annual fee with 15% escalation every year, no data
Permission for networking, data broadcasting .
Migration of phase- I licenses to phase-II
Close bid system, one time entry
Annual fee 4% of gross revenue or 10% of one time entry fee whichever is
20% FDI, 50% content to be produced in India, 50% broadcast equipment can
AIR’s Programme & Advertisement code to be followed.
Networking for ‘C’ & ‘D’ stations and data broadcasting
News and current affairs not allowed
108 FM channels were offered in 40
cities in May 2000.
Bids were received for 101 channels for Rs.425 crores against an estimate
of about Rs.80 crores.
Finally, Government could collect only about Rs.159 crores from 37
channels as bidders of 64 channels defaulted. Though the licenses were issued to
37 channels, only 22 channels are presently operational. Thus Phase-I results
were not encouraging as only about 20% of expected licenses could become
TRAI examined the issue in an
open and transparent manner.
Issued a Consultation Paper on 14th April 2004.
Organised Open House Discussions (OHDs) in Chennai, Delhi and Mumbai in
May 2004 as a part of TRAI’s Consultative Approach.
TRAI Recommendations were sent to Government on 11th August 2004.
provided Recommendations on the following aspects:
Method of Licensing, License fee
structure and period of license.
Ownership Issues (Monopoly Control, FDI and Cross Media Publicity).
Content, News and Current Affairs and Programme Code.
License conditions and default obligations.
Increase in Number of frequencies for FM Broadcasting.
Migration of Phase-I Licenses to the Phase-II Regime.
Ministry of I&B agreed under the
License agreement to grant license to the Licensor under Section–4 of the
Indian Telegraph Act, 1985 to establish, maintain and operate FM Radio
Ministry of I&B after execution of Grant of Permission agreement shall grant
permission to enable Permission Holder to install the radio station, obtain
wireless operating license and operationalize the channel.
bid tendering System has been adopted instead of open bid system of Phase I.
Highest financial bids which are equal to number of channels offered in a city
will be selected
the number of valid financial bids being more than the number of channels
offered in a city, the unsuccessful bidders have the option to remain in
the waiting list with certain conditions.
Annual fee will be 4% of Gross
Revenue of the Permission Holder or 10% of Reserve OTEF (One Time Entry Fee)
whichever is higher.
Gross Revenue will include gross inflow of cash, receivables, other
considerations, rent, interest, dividend, royalties, commission, income from
promotional events, Musical/ Film Star Nights, Sale of cassettes, CDs etc.
Gross revenue will be assessed before taxes, agency commission, net of
discounts to advertisers.
Barter advertising contracts will also be included.
Every permission holder will maintain separate financial account for each
A company controlled by a Trust, Society, Non-profit organization,
religious body, political party.
An advertising company or associate of an advertising company.
Defaulters of Phase-I who have gone to courts.
Every applicant cannot have more than one channel in a city.
Every applicant cannot have more than 15% of the total channels allocated
in India including Phase-I channels.
Licensees of Phase-I who have an operational FM channel in a city can not
bid for additional channel in the same city under Phase-II.
Direct Investment will not exceed 20% including FDI by OCBs/ NRIs/ PIOs/ etc.,
portfolio investments by FII.
production & lease of equipment
Not more than 25% of the total content shall be outsourced to a single
more than 50% of the total content would be outsourced.
more than 50% of broadcast equipment shall be hired or leased on long-term
least 50% of the programmes are to be produced in India.
Programme code and Advertisement code of All India Radio are to be
Public Interest Announcements of Central and State Governments are to be
broadcast for a maximum duration of one hour.
No brand names or owners names or Corporate Group names would be used to
identify the channels to gain commercial advantage over other permission
Networking of channels of a Permission Holder has been allowed in “C” and “D” category cities within a region.
Co-location mandatory for all cities
In 84 cities co-location will be on existing AIR/ DD towers
In remaining 7 cities (Delhi, Mumbai, Kolkata Chennai, Bangalore,
Hydrabad, Jaipur) Ministry of I&B will construct the towers for co-location
Pending construction of towers in these 7 cities for co-location
purposes, the successful bidders will be allowed to operationalise their
channels on stand alone basis for a period of 2 years
In Mumbai the existing Phase-I operators will be allowed to migrate to
Phase-II Regime only after they make agreements with BECIL and make payments
towards their share of common facilities of co-location
Period 10 years
Data Broadcasting Allowed
Period for keeping 3 months
Continuous Recordings of programmes
Permission will be revoked if Permission
Holder is unable to operationalise the channel within 18 months of signing of
Grant of Permission Agreement.
Permission Holder will also be debarred from allotment of another channel
in the same city for a period of 5 years.