(12 April 2008 6:30 pm)

NEW DELHI: Major stakeholders have responded in the negative to the idea of state governments or their agencies getting into broadcast or distribution businesses. The two exceptions in this case: the Tamil Nadu government and the Cable Operators Federation of India (COFI).

These are the findings of the responses to the consultation paper earlier issued by the Telecom Regulatory Authority of India (Trai) on the controversial matter of whether political parties, states or their agencies and religious organisations be allowed to get into the broadcasting or distribution activities.

Most broadcasters and the MSO (multi-system operator) Alliance have suggested that either one winds up the Prasar Bharati or at least not let other state entities get in, as this would not only need an amendment of the Constitution, but also go against the previous orders of the Supreme Court.

The judgement most quoted for the purpose of responding to this consultation paper was that of the Supreme Court in the case between the Union of India and the Cricket Association of Bengal.

Regional broadcaster ETV has said it is very unhappy with the prospect of states getting into the arena, "as it undermines independent and free media."

According to ETV, even Prasar Bharati should be wound up. As for state governments getting into distribution, "nothing could be more pernicious", as party cadres would capture the distribution network and shut down channels critical of the government.

Submitting the lengthiest response, the Essel Group has stressed that there should be regulation to prevent governments getting into either cable TV or broadcasting.

Essel, like MSO Alliance and others, has also said that under the Constitution, broadcasting is a central subject and states cannot be included in that.

"State-owned media, broadcast stations and distribution control is a recipe for disaster," says Essel. The group has cited case studies from 18 countries to prove this point.

Essel has called for a broadcast regulator, with judicial and licence-issuing powers.

On states getting into distribution, Essel has said that the "sector is based on commercial considerations and efficiency and government would vitiate this and push non-competitive practices." Parties can misuse this for political gains and create monopolies.

MSO Alliance has started by questioning the rationale behind the consultation itself.

"The government has rejected applications made to it by the states of Punjab, Andhra Pradesh and Tamil Nadu Arasu Cable Corporation on the lines of the (SC) judgement stated above. Where does the need now arise for this consultation paper?" the Alliance has said.

This would go against the Constitution and court directives. It would not provide level playing field to the private sector, the MSOA has said.

Allowing states and parties to come into the broadcast and distribution business would overturn the Supreme Court's orders.

The MSOA has expressed alarm at the fact that despite the fact that Trai has not given its recommendations on the issue to the Union government, the Tamil Nadu government is running an MSO business.

Ortel, the MSO from Orissa, also agrees that any such attempt by state governments would go against the SC order. And pointing to the fact that Prasar Bharati is already functioning as an arm of the Union government, it found no case for other governments getting in.

Contrary to these views, the Tamil Nadu government has typically defended the running of Arasu Cable on three grounds:

1. Arasu satisfies the definition of "person" as allowed to run an MSO
2. Article 298 has been interpreted by the SC as allowing state to get into businesses and have contracts
3. Prasar Bharati, a government organisation, is already in the distribution business with its DD Direct DTH platform.

The Tamil Nadu government has said that the definition of "person" under section 2(e) of the Cable Television Network (Regulation) Act, 1995 includes "a company in which not less than 51 per cent of the paid-up share capital is owned by Indians. Hence, it did not see any impediment in state governments getting into the distribution business."

COFI has supported the stance taken by the Tamil Nadu government. According to it, state governments getting into this business would "benefit the economically weaker section of the population who are being serviced by cable operators."

Reports indicate that all the cable operators of Tamil Nadu are "very happy" with state-owned MSO Arasu, COFI says, adding that states can run under the banner of the Prasar Bharati.

On the issue of political parties controlling the distribution and broadcast business, it observes: "Since these ventures would be run by professionals, political parties would have no say in them."

The issue of religious bodies running channels have largely been ignored in the responses to Trai, barring Essel Group, which says banning these could infringe upon universal human rights.

Ortel, however, says religious bodies must not be allowed to run the broadcasting business.