Govt entities may not get to hold cable TV licences

I&B ministry veering towards not giving licences to state-owned firms as recommended in 2008 by Trai
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First Published: Thu, Nov 15 2012. 11 16 PM IST
Since its re-launch in September 2011, Arasu has built a network that covers 31 districts in the state (but not Chennai) and reaches 4.9 million households. Photo: Indranil Bhoumik/Mint
Since its re-launch in September 2011, Arasu has built a network that covers 31 districts in the state (but not Chennai) and reaches 4.9 million households. Photo: Indranil Bhoumik/Mint
Updated: Fri, Nov 16 2012. 02 26 PM IST
New Delhi/Chennai: Tamil Nadu Arasu Cable TV Corp. Ltd, a government-owned cable television distribution network and part of chief minister J. Jayalalithaa’s effort to curb the media power of the Maran family-owned Sumangali Cable Vision, may not receive a licence from the Union ministry of information and broadcasting (I&B) to run the network.
The ministry, a top functionary said on condition of anonymity, is veering towards not giving licences to state-owned firms to run cable television networks, as recommended in 2008 by the Telecom Regulatory Authority of India (Trai), because doing so would be tantamount to giving the state some control over what people watch and also over the media.
The ministry is yet to take a final decision on the matter, the person said, but, interestingly, added that other states too had asked for similar licences, an indication that the Arasu model is being closely watched by politicians outside Tamil Nadu.
The Cable Television Networks (Regulation) Amendment Bill, 2011, that made digitization mandatory also made it compulsory for all cable companies to get a digital asdressable system (DAS) licence from the government to operate their distribution networks. In the absence of the licence, the operator will not be allowed to operate.
Arasu applied for a DAS licence on 5 July 2012, the company’s managing director D. Vivekananda said.
The application is still being processed and only the Union government would be aware of its status, he said.
Vivekananda noted that currently “there is no provision or rule that prevents any state government to own cable operations”, and the 2008 Trai recommendation that state governments should not get licences to run cable networks hadn’t been implemented.
The government has given 11 DAS licences to multi-system operators (large cable operators) in Tamil Nadu until now, but Arasu is not one of them.
Arasu started operations in 2011 after it was taken off the shelves and dusted by Jayalalithaa when her All India Anna Dravida Munnetra Kazhagam came to power. It was founded in October 2007 by the Dravida Munnetra Kazhagam (DMK) headed by M. Karunanidhi at the peak of a fight between his family and the Marans, his grandnephews who control Sun TV and Sumangali Cable Vision. However, plans to project Arasu as a rival of Sumangali were shelved after the Marans made up with Karunanidhi.
Since its re-launch in September 2011, Arasu has built a network that covers 31 districts in the state (but not Chennai) and reaches 4.9 million households. The number of households serviced by cable companies in the state is estimated at 12 million, according to M.R Srinivasan, general secretary of Chennai Metro Cable TV Operators Association. India has 120 million cable households.
Before making its 2008 recommendation, Trai floated a consultation paper to explore if “it would be in the interest of the broadcasting sector and in the interest of the public at large to permit the Union government and its organs, the state governments and their organs, urban and rural local bodies, political bodies, etc. to enter into broadcasting and distribution activities”.
After meetings stakeholders in the media business and assessing their feedback, Trai, in its report, had said the government and local authorities should be disqualified from holding any television distribution licence.
The ministry of information and broadcasting official cited above said the ministry was discussing the issue all over again as licensing such entities would bring television distribution under state control.
“We have several such requests. If we agree to one, then all the states will ask for such licences. Also, the broadcasters may be hostage to state governments for distribution of their signals to viewer homes,” he said.
The chief executive officer of an entertainment channel agreed. “There is a conflict of interest. If a state government rules the cable business, it can switch off a broadcaster’s signals at will, something which may be handy in case of news channels telecasting reports that may not be favourable to the ruling party,” he said, asking not to be identified.
Other than exercising control over the media, government entities keen on DAS licences may also be tempted by the potential revenue in the business once India’s 120 million cable and satellite homes shift from analogue to digital.
Digitization will expand the Rs.20,000 crore cable television business into a Rs.50,000 crore market in a few years, according to a study by Hong Kong research firm Media Partners Asia released earlier this year.
A cable TV industry veteran who is now an executive at a large cable network said that although the state should stay out of any kind of television distribution, the government should keep an eye on the emergence of distribution monopolies involving private companies. He added that during the DMK regime, Sumangali often made it difficult for even national cable companies to operate in Tamil Nadu.
If there’s anything the Sumangali example highlights, it is that merely denying licences to state-owned cable companies will not ensure choice for viewers, independence for television broadcasters, and fair competition.
“Often private companies that are fronts for political parties or state governments run cable networks. The government, the Competition Commission of India or an independent, autonomous body must ensure fair and effective competition and consumer choice,” said the cable industry executive cited above, who asked not to be identified.
shuchi.b@livemint.com
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First Published: Thu, Nov 15 2012. 11 16 PM IST
More Topics: Cable TV | DAS | digitization | Arasu | Sumangali |
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