Interview with Telecom Regulatory Authority of India’s Principal Advisor.
By Vishal Dahiya
NEW DELHI: N. Parameswaran, Principal Advisor, Broadcast and Cable Service, of Telecom Regulatory Authority of India (TRAI), was interviewed by Rajya Sabha TV.
In the interview, Parameswaran spoke about the recently released report by TRAI, regarding issues related to media ownership, controls on entities dominating media markets and how to not let political parties and religious groups take control of media properties.
Excerpts from the interview:
First and foremost as far as I could gather from the report, it says that a single media company should not be allowed to dominate a language market. It also talks about the vertical ownership as far as the media industry is concerned. For example somebody owning a channel as well as DTH services. What is this report about?
The report is about issues related to media ownership. There are three parts to the report; first, on cross media. Second is on the vertical integration and third is on the issue of internal plurality.
When we talk of cross media, news and current affairs is of great importance for the plurality and diversity of views in a democratic setup. So here what we are saying is that, we have considered television and print as the two mediums through which news and views are communicated. So in television we have taken only the news channels and in the case of the print only the newspapers and the dailies, not the magazines. We believe people should get different viewpoints from different sources. So from that point of view it’s important that if the news is delivered through the TV medium and through the newspapers, it should come in from different viewpoints; multiple sources should be available. That is what we mean by plurality and diversity of views.
Your report says that curbs should be imposed on cross media ownership. So how would a cross media ownership interfere with the plurality of news?
Let us take a regional market, let’s say a state. The market is a state with a regional language. Any language you take, say let’s say it’s Bengali, it will be dominant in West Bengal or Telugu in Andhra Pradesh or Tamil in Tamil Nadu, Marathi in Maharashtra.
So that’s how in your report you have divided the entire market into twelve segments.
Correct, exactly.
That’s based on languages.
Yes, based on languages, on the language that is most commonly spoken in that particular state. English is pan India. We are taking into account newspapers in those 12 languages and the TV news channels in those languages. Now when we talk of cross ownership, if the same person is controlling both TV and print it means that person has control. And in fact I would not go into the details because control is a very widely used term. One form of control is the equity, another is through the control in the board or in the appointment of the management or it could be some agreements they have or in the form of loans. So there are various ways in which somebody, some company or some entity can control. So that is where we have come and given a very comprehensive definition of control. When we say that a market is concentrated, it means somebody has monopoly in that area. In any particular state, suppose one newspaper is having monopoly, then we have an index call HHI which gives the indication of the concentration of that. It is well accepted internationally and nationally that a figure of eighteen hundred and above – which means that particular market is concentrated.
Similarly in the television also we determine the HHI index. Now if that HHI index is more than eighteen hundred it means the television channel, one of the television channels is having the monopoly there. Now when we come to cross media ownership, now between the two of them if there is a common owner – and common owner means like in the TV news channel and in the newspaper one company is contributing to more than thousand in that eighteen hundred. This index is nothing but the square of the market share. If I am having thirty three percent market share, square of that will become thousand. So which means that if you are having more than thirty three percent of the market’s share that means you are a dominant player. So if you are a player like that in both these markets then you will have to reduce your market share in one of them.
One major argument which has come up against this particular report is the very fact that some of the industry watchers and insiders say that this particular report and the gist of the report which you just spoke in detail about, on the first part is, the one in the corporate market. The one we were talking about, the cross media ownership. There is an argument which says that it goes against the principle of free market economy. You know if there is a free market then why can’t somebody who has invested in product A can also invest in product B or maybe product C as well?
No, this is not true because anywhere across the world this particular aspect of plurality and diversity of the views is only in the case of a news market. In the democratic setup, diversity and plurality of views is important in the news sector.
One more argument which is being taken up is the very fact that as far as the cross media ownership is concerned what has helped it as far as media houses are concerned. For example there is a media house which has deep penetration in maybe product A, maybe in newspapers in a vernacular newspaper. Now if it has the money to go ahead and invest on technology, better technology, better programming to try and source more news and put it through to the public through product B say a television channel, a particular news channel. Now how is that wrong? The particular owner is utilizing the present resources to go ahead and expand the network and put it forth to the viewers as well maybe in some other form?
No, we never we have said that it is wrong. Only that you should not be monopolizing in both the streams, that’s the only thing. In television, we have not taken into account entertainment channels, only the news channels. So in the television news and in the newspaper industry in that particular state, in the whole of the state if you are becoming monopolistic, if you are dominating, that is not good for the democratic setup.
But don’t you think this will sort of kill the revenue arm of that company? By going across the board, by going through several network split forms, the owner of the company or rather the media house try and leverage advertising relationships as well. What is wrong if they have a newspaper or portal or a television news channel as well?
It’s a trade off in a way that how much are you willing to go for that with respect to that. If the market itself is not concentrated, then no problem. The market may be concentrated but their contribution is less than thousand HHI, fine, perfectly alright.
Now your report says that a TV channel which also owns a cable network, or a DTH platform or a distribution company that sort of arrangement cannot be allowed beyond a certain extent, there are certain restrictions. What are those restrictions you are proposing? What are the bases for those restrictions?
Here when we talk of the vertical integration, we are talking only of the broadcasting sector, nothing to do with the print. The broadcaster produces the content and distributes it; the two primary platforms are either the DTH or the cable. So here what we have said is that suppose a broadcaster is having a control on a particular distribution that is let us say DTH. The broadcaster has control or owns another DTH platform then he cannot come in the cable one. This is permitted but then don’t come in the cable because what is most important is that as far as the consumer or the subscriber is concerned, he should have the choice of the platform. It’s very important I mean customer has choice of platforms through which he can get the contents. So either the broadcaster can integrate himself or and control the cable or the multisystem operator that’s a cable network, not in both and if you are integrated like this there is another restriction that your market share cannot be more than 33 percent. Here for I mean the distribution market. The broadcasting of course the content is distributed all over the country. So in the distribution you cannot have and also we will put certain other regulatory restrictions on them that because it is very important say for today you have 6 DTH brands, some of them have certain control on the broadcasters others don’t have. So it is important that a level playing field is maintained for them. Otherwise they will not be able to survive even. So if the completion is not there, the consumer will be affected with that.
That sounds fair enough as far as I am concerned. It sounds a little fair that it is to break the monopoly, to ensure that there is a level playing field for the competitors, to ensure that there is no undue encroachment upon somebody else’s competitive space. This is in contrast with what the authority that’s the Telecom Regulatory Authority of India had recommended for the telecom sector, wherein a uniform licensing was allowed. So why not have a uniform licensing here as well? Somebody has been given a license to operate a television channel and if that person wants to move into another entity, say maybe wants to move into the DTH business, why can’t that happen?
No, here for the simple reason that the difference between the telecom and the broadcasting is that the telecom networks are only carriers. I mean they are just providing the platform for carrying conversation, say between you and me. The telecom network is providing us only a carrying platform, there is no content involved in there. Here there are two entities, two distinct entities are there. There is the broadcaster who produces the content or owns the content or spends his money to produce the content and second is for the distribution. So both are two different entities altogether. I mean the content entity is absent in the telecom. If you want to equate the telecom network to the cable network and that’s where we talk of convergence also. The telecom and the cable network convergence. There the things that they are converging, so that can only be equated. So there cannot be parallel from this point of view because broadcasting is driven by the content and whereas the telecom is not.
Let me come to another very important aspect of your report: of the ownership of the media platforms, maybe television channels or newspapers by political parties or maybe religious groups. Your report says that this should not be allowed and this was something which was said by TRAI 4-5 years earlier as well but nothing was done in that regard and TRAI has once again put this point forth. Why is that you believe that this should not appear?
Because you see in fact if you look at our recommendations this has been pointed out by a number of leading journalists themselves who are in the field. But we have given enough quotes of that in our report. In fact in 2008 and 2012 we have said that both the government bodies and the political parties should not be into the broadcasting and cable TV services.
In southern states like Tamil Nadu and Andhra Pradesh there are political parties who have a stake in the media industry. My point out here is that since the report is to be acted upon by the government which is been run by political parties, do you think this will pass muster with the government?
As an independent regulator, we have given the recommendations, now it is for the government to take a view on that. (GIN/RSTV)