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Why "Free Spectrum" to Private TV


By: Joseph Martin CJ & Dipak Dholakia


As per the media reports,Information and Broadcasting Ministry is planning to undertake the exercise to review the entire status of issuing licenses to TV channels. In this connection, the Ministry of Information & Broadcasting (MIB) asked Indian television broadcasters to give details of their operational status along with the Wireless Planning & Coordination (WPC) licence by 11 June. As a result of this at least 100 television channels owned by nearly two-dozen broadcasters are set to lose their permit for being ‘inactive’ since obtaining the necessary government permission in the last two years.

               The MIB had earlier issued a notice in this regard on 25 March seeking a reply within 15 days. However, the deadline has been extended as most of the channels did not comply with the deadline.The private television broadcasters attitude of not even responding to the MIB regarding the details of their operational status along with the Wireless Planning & Coordination (WPC) license is absolutely irresponsible and deliberate .

It is to be remembered that the spectrum the private television broadcasters occupy now is valued at thousand of crores of rupees and the private television broadcasters have been allotted the license to use the spectrum without reasonable and sufficient license fee (spectrum charges) to the government.
As per the information available from the Wireless Planning & Coordinatioin (WPC) Wing of the Ministry of Communication and Information Technology ,the spectrum charges for use of satellite satellite based spectrum for the broadcasting purpose are being levied @Rs.35,000/- per MHz per annum or the part thereof the frequency spectrum assigned to the licencee

                In the historic judgment in 1995 the Supreme Court (Ministry of Information and Broadcasting V/S Cricket Association of West Bengal writ petition ) ruled that air-waves (the spectrum) constitute public property which must be utilised for advancing public good. Since air-waves constitute public property, mobile phone operators and private FM operators pay license fees to the government in its capacity as the custodian of public properties. But Private television broadcasters use these air-waves with paying only a very small fee for it. Yet they are not even willing to respond to the government (MIB) regarding their broadcast license they hold .

   Changed Broadcast Scenario: Now Broadcasting is not for serving the Nation , But only for profit ! , Huge profit.!!    

                Ideally, broadcast media should provide quality entertainment and useful information that fosters a healthy democracy. But, what is the situation in our country now? Television Broadcasting has now become an industry and day by day new entrants are joining the race with the sole motive of profit by reaping the benefits of consumerist culture, spread by the media, encouraged by the media and exploited by the media, after the globalisation and liberalisation of Indian economy.

              In the recent years, broadcasters have increasingly elevated financial interests above the public interest. Now most of our Broadcast media exist only to generate huge profit . It is a well accepted truth that crime shows, sex shows and similar shows had many more viewers than other shows on news channels. Advertisers went by the number of viewers when advertising on channels.Today television channels are making fast money by cashing on the news in the wrong sense and the wrong way. In the race to become more popular and make money they have broken all the limits media must follow while serving to build a healthy and progressive society. They have no respect for the sentiments and ethics of the people and country they purportedly serve. With their immense power to influence the masses they just make judgment like a true dictator rather than give a good advice like a true friend as they are supposed to do .

      Air-waves that belong to public property cannot be allowed to exploited by private television broadcasters for profit only ,and that also with out even paying the sufficient spectrum fee or the so called license fee..

                  In this changed broadcasting scenario in our country, FRIENDS OF PRASAR BHARATI appeals to the policy makers of this country to reconsider the existing system of allocating Broadcast license and the valuable spectrum to private television broadcasters , to ensure that television broadcasters are forced to pay the reasonable spectrum charges comparable with other spectrum users. FRIENDS OF PRASAR BHARATI requests the government to charge sufficient license fee from the private television broadcasters for the valuable spectrum they are using now. Now other than private television broadcasters all other spectrum users are paying sufficient license fee to the government for the valuable spectrum they are using.

         In October 8. 2010, a group of ministers (GoM) headed by finance minister Pranab Mukherjee have been appointed by the Prime Minister to decide whether a clock auction model should be adopted for the third phase of FM radio rollout in India. So far, FM stations have been awarded through conventional sealed tender auctions. The unexpectedly huge revenues raised from 3G-BWA clock auctions have led to demands from the cabinet secretariat and the department of revenue that the same model be followed for FM radio as well. But it is very unfortunate to note that such a move from the government is not visible in the case of granting Satellite Channel Television licenses, It should be noted that compared to FM broadcast industry Television Broadcast industry is financially very strong enough to pay the spectrum fee.

The spectrum is a valuable and scarce National resource

                 Electromagnetic Spectrum is a major asset to any nation. It is a great National asset .For example in a developed country like United Kingdom (UK), it contributes about 2-3% of its GDP. The government should consider that spectrum pricing is a tool which should be applied to all broadcasters to promote the most efficient use of spectrum and for resource mobilisation for the nation. It must not be allowed to be warehoused or wasted. Since spectrum is a national resource, the public must be compensated for its use by its operators . Auctions are one source of payment. Meaningful public interest obligations and user fees are two other ways of paying for use of this public good.

               The nine telecom players, including BSNL, MTNL, Bharti, Vodafone and RCom, paid Rs 67,719 crore ,(US$15 billion, at Rs. 45 to a dollar) to the government towards 3G spectrum that was auctioned, against the government's original expectation of Rs. 35,000 crore (US$7.78 billion). The Broadband Wireless Access  spectrum auction fetched the Government Rs. 38,543 crore(v/s estimates of around 1500Cr.)

             Direct-to-home (DTH) television operators are paying 10% of their gross revenue to the government as license fee for the spectrum they use. Presently, a DTH Licensee under Article 3 of the License Agreement has to pay an annual license fee to the Government an equivalent to 10% of its Gross Revenue. The total license fee received by the government from all DTH operators for the last three financial years 2007-2008, 2008-2009, 2009-2010 is Rs.345631258/-, Rs.893811734, and Rs.1262539530/-respectively.
           The government earned Rs. 908 crore as one time entry fee (OTEF) from private FM operators from the phase two of the FM in which government allocated 280 radio licenses to private operators in addition to the annual revenue sharing at the rate of 4% of the annual revenue for the year or the 10% of the one time entry fee (OTEF) for the concerned city. In phase one, the government earned Rs .155 Crore.

          The licences and the spectrum (2G) allotted in 2007 to nine operators at a price of Rs 1,650 crore (Rs 16.50 billion) per operator. This price was not taken on the basis of the 2007 market value but on the basis of an auction held in 2001. Under the licence agreement with the department of telecommunication, GSM operators are entitled to spectrum up to 6.2 MHz while CDMA operators have been permitted spectrum up to 5 MHz. The regulator TRAI had suggested on 11 May 2010 that, telecom operators with 2G spectrum of more than 6.2MHz should pay a one-time fee based on the price of 3G spectrum as per the recent auction.

          A channel requires 1.5 to 2 MHz bandwidth with MPEG4 compression format & 2.0 to 4.0 MHz with MPEG 2 compression format . The band width requirement of a channel also depends on the content it carries. Channels carrying fast moving picture like sports , movie , infotainment requires more bandwidth as compared to those channels which have slow moving pictures like news , shopping, religious etc.The satellite private television channels using MPEG4 are now paying only Rs. 52,000 to 70,000 per annum and those using MPEG2 technology paying only Rs.70,000 to 140,000 only per annum as spectrum charges .So it is evident that the fee the Television Broadcasters paying for the spectrum is extremely low compared to its real value.

In a country where 3G spectrum is valued at around RS. 70,000 crore, how can the country accommodate the growing number of TV channels without enforcing sufficient spectrum charge as license fee?.

   Bring broadcasters in line with other spectrum users

             But the Television broadcasters now paying only a extremely low spectrum charges for the spectrum they are using. The fact that those who oppose direct and complete funding to Prasar Bharati and want to face Prasar Bharati ,competition from the market and demands AIR& DD to generate 50% of the operating expense, forget the fact that the private television broadcasters have been given undeserving huge financial benefit in the form of absolutely cheap( we consider it almost free) spectrum , and yet they charge fee from the people to the tune of Rs. 2000 to 3000 per annum!. Also, PRASAR BHARATI provides a free DTH platform to the citizens of this country in addition to its free channels. A campaign needs to be carried on to make the private television broadcasters pay the sufficient spectrum fee (the license fee) for the valuable spectrum they using.

          At the time of promulgation of Prasar Bharati Act, the then government had promised a comprehensive Broadcast Bill. According to the draft of the Broadcast Bill 1997 (which didn't get passed till date), the television broadcasters need to pay the license fees as may be determined by the regulator.

         While the need for a Broadcasting Bill has been talked about since 1997, it was only in 2006 that the UPA Government with previous Union Information & Broadcasting Minister Priya Ranjan Dasmunsi brought out the draft for the Broadcasting Services Regulation Bill. The Bill, said the I&B Ministry, will regulate the broadcast services with several private TV channels.

          But strangely, consciously and unfortunately, the license fee portion has been removed from the draft of the Broadcast Bill 1997 when it was modified and redrafted in 2006. It may be recalled that the private broadcasters were unanimous in opposing the proposed Broadcast Bill in the name of freedom of expression. The real opposition, it can now be conjectured, was on the issue of the license fee which however, never came to light during the hot debates on various channels. For our readers to verify the original provision of license fee and the quiet removal of it we hereby are giving the link to both Broadcast Bill 1997 and Broadcast Bill 2007 in the annexure of this article.

         The spectrum war is not limited to the telecom space alone; it has spilled over to the broadcasting sector as well. With close to 512 TV channels being beamed into India, and over 152 more waiting in the queue, the government has asked the regulator – TRAI -- whether there is a need to cap the number of channels in the context of scarce spectrum availability. Earlier, the Department of Telecommunications (DoT) had asked the Information and Broadcasting Ministry to vacate some of the lower C band spectrum, that can be used by telcos.

         It is believed that the I&B letter to TRAI followed a series of written complaints from MPs on several "erratic" channels whose seriousness in the media business was being doubted. It may be mentioned here that capping the number of service providers has been a contentious issue in the telecom sector also. And, despite the scarcity of spectrum, a cap on the number of telcos was not imposed. But, recently, the government said that no new application would be entertained beyond a specified cut-off date.

       In a related development, I&B minister Ambika Soni has written to Home Minister P. Chidambaram and some chief ministers, expressing her concern on cable operators showing illegal and unregistered TV channels. Many of these channels are operating without any permission from the ministry of home affairs, thereby risking the law and order situation of the country.

 It goes with out telling that the rules for approving new TV channels are not stringent enough in India. If not, how could persons / companies with no media exposures ,but with money (of course, black) just wanting to drive on the media wagon could get easy new TV channel approvals ? The result is, there are so many mediocre TV channels today that even their owners don’t see them (we have channels for all major Political Parties, political leaders, religious groups etc. etc ,).

  I&B ministry has put forth many questions to TRAI regarding regulation of TV channels. They are:

* Should there be a five-year commitment from broadcasters for running channels to assess the seriousness of the players;
* Should financial viability of the broadcaster be made more rigid so that entry becomes that much tougher;
* Should experience of the applicant in the media business be made mandatory for opening channels;
* What should be the maximum number of satellite channels that can be permitted;
* Should there be an amendment in the unlinking / down linking clause?

            So, the final answer on limiting the number of TV channels and imposing other regulations  and imposing sufficient spectrum charges lies in the hands of TRAI and the ministry of Information & Broadcasting.


            In this scenario it is quite logical to auction the much valued Television Broadcast Spectrum, just like the way the other spectrum users (Telecom operators, Private FM operators , Mobile television operators, Direct-to-home (DTH) television operators, Broadband Wireless Access (BWA) operators ) have been allotted the spectrumm.It should be made mandatory even for the existing Broadcasters to pay the spectrum fees, a one-time levy on existing private television Broadcasters comparable with the price, that can be discovered in the future auction for television broadcast spectrum as the benchmark or some percentage of the gross revenue of the broadcasters as in the case of DTH and private FM broadcasters.


annexure :

a) Broadcast bill 1977

b) Broadcast bill 2007

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