But differs with regulator on minimum net worth.
The information and broadcasting (I&B) ministry has accepted the recommendation of the Telecom Regulatory Authority of India (Trai) that no cap be placed on the number of private satellite channels that can be uplinked or downlinked for viewing in the country.
The ministry, however, reduced the net worth requirement of a company for operating news as well as non-news channels from the levels proposed by Trai.
In a letter to Trai, the ministry said: “The suggested net worth criteria will only benefit big companies, thereby denying an opportunity to the medium and small players in the television business. It will adversely affect first-generation entrepreneurs.”
Based on the capital cost requirement, the ministry has proposed the net worth requirement of non-news and current affairs channels be increased to Rs 5 crore from Rs 1.5 crore at present and be enhanced by Rs 2.5 crore for every additional channel.
These and other ministry reactions to Trai proposals have been returned to the latter, for comments before preparing the final guidelines for government approval.
Also Read
Trai had pegged the average estimated capital for a non-news channel at Rs 10-15 crore and operating cost at Rs 15-20 crore per annum. It had recommended in July last year that the total net worth requirement be Rs 25 crore for the first channel and increased by Rs 10 crore for each additional channel for uplinking and down-linking non-news and current affairs channels.
For news channels, the ministry has proposed the net worth requirement be limited to Rs 15 crore for the first channel and thereafter Rs 5 crore for every additional channel. “The ministry is of the view that the net worth requirement should not become so stiff so as to stifle the growth of independent and divergent sources of news and views, which is the essence of a healthy democracy,” the ministry stated in its response to Trai.
Trai had suggested the net worth requirement be Rs 100 crore for the first channel and increased by Rs 25 crore for each additional news and current affairs channel.
To ensure companies make permitted channels functional within the stipulated one year, the ministry has suggested they deposit a performance bank guarantee (PBG) of Rs 1 crore, to be refunded on fulfilment of obligation. If the permission holder meets the roll-out obligation after one year but within two years of issuance of licence, half the PBG would be refunded. If the operator does not operationalise the channel within two years, the full PBG is to be forfeited.
The ministry turned down Trai’s proposal to permit universities to uplink/downlink educational channels, but accepted the authority’s recommendation that the period of permission for uplinking and downlinking of channels be made uniform at 10 years. The ministry also proposed the minimum experience requirement for top management of both news and non-news channels be restricted to three years, as the private television industry is hardly a decade old.