Govt considering revision of FDI limit for broadcast sector


    MUMBAI: The Government is considering revising the foreign direct investment (FDI) limits in various subsectors of Broadcasting.

    In the keynote address at CASBAA India Satellite Forum, Secretary (I&B) Asha Swarup said, "We are of the opinion that the composite limits for FDI and FII, both direct and indirect can be kept at 74 per cent in the case of infrastructure and platform services like teleports, DTH, HITS and satellite radio. Already 100 per cent foreign investment is allowed in the case of non-news and current affairs channels and channels permitted under the Downlinking Policy. No changes are proposed in the 26 per cent limit for News and current affairs channels and 49 per cent for cable operators.

    On Conditional Access System (CAS), the Secretary said that the Government at present is in the process of analyzing the impact and success of the CAS implementation in the four metros so that appropriate lessons can be drawn for its further extension and if need be suitable improvements can be made in the present regime to make it more acceptable to stakeholders. "The Government has since received three survey and evaluation reports on CAS. These studies were conducted by BECIL, IIMC and a consumer organization VOICE," she said.

    Swarup added, "There is need for a better enforcement mechanism at the local level to ensure that pay channels are made available only in an encrypted format and violations if any at the level of MSOs and cable operators are punished and dealt with severely. The Government will welcome any suggestions on this issue. For improved penetration, the cost of set top boxes needs to be brought down and it has to be ensured that MSOs and cable operators ensure compliance to the quality of service regulations laid down by TRAI."

    The secretary also remarked that the group on digitalization and introduction of CAS has selected 55 cities, which include all the cities with a million plus population, some cities located in the proximity of the cities to the existing CAS cities. It has also included all the State capitals, which would not come under any of the above criteria. The Group has also suggested a three-year roll out plan ending September 2011, for these fifty five cities. A sunset period for regulation especially w.r.t tariff regulation is also proposed by the group. The Government is actively considering the recommendation and has started in the action with stakeholders at its level. However it will take some time before a final view is taken on its applicability.

    "Price cap in the CAS areas are not forever and can be reviewed at an appropriate time. The fact that there has been a substantial growth in the number of both free to air and pay channels with over 300 private channels now and about 80 more applications under consideration with applications not only from the existing but also new players is an indication that despite the tariff regime the business of broadcasting is lucrative. TRAI has also indicated that the need for regulation will go once effective competition develops with alternative modes of content availability so that consumer interest remains protected. The attempt of the Government is to introduce new service providers to ensure effective competition and to create new avenues for investment and growth of the industry," she said.

    On digitalization, Swarup said that a national digitalization plan for India will have to be voluntary in all steps and will have to provide for simultaneous provision of analogue and digital service. "Broadly speaking our aim should be to phase out analogue transmission by the end of the Twelfth Plan i.e. 2017," she said.