Broadcasting body under MRTPC lens

The Indian Broadcasting Federation (IBF) has come under the scanner of the Monopolies and Restrictive Trade Practices Commission (MRTPC) for levying a 25 per cent surcharge on television advertisers last month.

Although IBF had withdrawn the surcharge, MRTPC has referred the case to the Director General of Investigation and Registration (DGIR) office to see whether IBF's step was legitimate.

The result is expected in two months, said an MRTP executive. He, however, declined to comment on the action that might be taken following the investigation.

On the other hand, the chairman of Indian Society of Advertisers (ISA), Bharat V Patel confirmed that the surcharge, which caused a stir among big ticket advertisers such as Hindustan Unilever and Maruti, has been withdrawn.

Advertisers on channels refused to concede to the IBF demand to pay 25 per cent surcharge on TV ad rates effective from October 16. The ISA, representing leading FMCGs and services companies, decided to go to court, alleging breach of contract by TV channels.

It was, however, decided that television broadcasters would levy the surcharge for all new contracts.

Explaining the rationale behind the 25 per cent hike in spot ad rates, Paritosh Joshi, President, advertising sales and distribution, Star TV India had earlier said, "While the cable and satellite homes have almost doubled to 75 million in the last five years, the spot rates have remained the same. So while the advertisers are paying less for contact per person (ads seen by each television viewer), our input costs have increased. Therefore, the hike was inevitable."