Finally the Government of India came out with much waited third phased policy guidelines on expansion of FM Radio broadcasting services through private agencies. The Indian Cabinet has recently given its “go” on the policy permitting radio operators to carry news bulletins of All India Radio, a government of India owned radio broadcasting service.
Cabinet has also cleared the proposal of the Ministry of Information and Broadcasting, policy making ministry on information and broadcasting, for conducting ascending e-auction, as followed by Department of Telecommunications for the auction of 3G and BWA spectrum, mutatis-mutandis, for award of license of FM Channels, as recommended by the GoM on Licensing Methodology for FM (frequency modulation) Phase-III.
FM Phase-III Policy extends FM radio services to about 227 new cities, in addition to the present 86 cities, with a total of 839 new FM radio Channels in 294 cities. Phase -III policy will also result in coverage of all cities with a population of one hundred thousand and above with private FM radio channels.
Apart from allowing private Radio operators to carry news bulletins of All India Radio, the approved third phased policy has also clearly defined what is news and non-news.
According to the new policy, broadcast pertaining to the certain categories like information pertaining to sporting events, traffic and weather, coverage of cultural events, festivals, coverage of topics pertaining to examinations, results, admissions, career counselling, availability of employment opportunities, public announcements pertaining to civic amenities like electricity, water supply, natural calamities, health alerts etc. as provided by the local administration will be treated as non-news and current affairs broadcast and will therefore be permissible.
The limit on the ownership of Channels, at the national level, allocated to an entity has been retained at 15 per cent. However channels allotted in Jammu & Kashmir, North Eastern States and island territories will be allowed over and above the 15 per cent of the national limit to incentivise the bidding for channels in such areas.
Private operators have been allowed to own more than one channel, but not more than 40 per cent of the total channels in a city subject to a minimum of three different operators in the city. Additionally cap on Foreign Direct Investment (FDI) and Foreign Institutional Investment (FII) in a private FM radio channel have also been increased from present 20 per cent to 26 per cent.
Under the new policy, networking of channels will be permissible within a private FM broadcaster’s own network across the country instead of in ‘C’ and ‘D’ category cities only of a region allowed at present.
Providing special incentives for North East (NE), Jammu and Kashmir and Island regions, the government has liberalised the annual license fees to be paid.
Under the new policy, private FM Radio broadcasters in North East (NE) Region and Jammu & Kashmir (J&K) and Island territories will be required to pay half the rate of annual license fee for an initial period of three years from the date from which the annual license fee becomes payable and the permission period of 15 years begins.
The revised fee structure has also been made applicable for a period of three years, from the date of issuance of guidelines, to the existing operators in these States to enable them to effectively compete with the new operators. Government has also allowed to use the Prasar Bharati infrastructure at half the lease rentals for similar category cities.
The incentives provided in the Policy with regard to J&K, North Eastern States and Island territories will make the operations viable in these areas and are expected to result in better off take of channels. The steps taken in the new policy will bring down operational costs and improve viability in general. To improve the viability further as against a maximum of four channels in D category cities permitted in FM Phase-II, FM Phase-III proposes only three FM channels in D category cities so that there are lesser operators to share the advertisement pie. The reduction in the lockin period of shareholding of promoters/majority shareholders from the present five years to three years will give them greater freedom to change the Share Holding Pattern.
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