FDI cap for news channels announcement put off

NEW DELHI: Surprises and anti-climax, like any other issue related to broadcasting and cable, continue to dog the uplinking matter where the guidelines, now, are expected to be stringent and somewhat on the lines of those prevalent in the print medium (26 per cent FDI cap) in the news category.

Early this morning, the government machinery was set in motion to convey that the information and broadcasting minister Ravi Shankar Prasad would announce the guidelines under the new uplinking issue later today. About an hour before the scheduled interaction, the minister cried off with the Press Information Bureau , the public relations arm of the government, saying the "briefing was cancelled as the minister had to rush off to an urgent and emergency meeting called by the Prime Minister and the deputy Prime Minister." 

Though in the backdrop of the recent killings by terrorists in the strife-torn Jammu and Kashmir region, the top level meeting at the Prime Minister's residence was a logical cause, what is being questioned in certain quarters is the fact that in such Cabinet meetings traditionally the ministers of state or junior ministers don't go. That is why Prasad, despite being the I&B minister, is not the official spokesperson for the government, a responsibility that is still being handled by his predecessor at the ministry, parliamentary affairs minister Sushma Swaraj. 

Though the next date for announcing the FDI guidelines for TV news channels desirous of uplinking from India has not been fixed yet, government sources indicate it is likely to be tomorrow as the I&B ministry wants to complete the proceedings as soon as possible. 

The government, which has twice postponed over the last three days the idea to hold a briefing on foreign equity guidelines, is also learnt to be seriously making the guidelines stringent and combining various clauses for news channels that has been specified in the news and non-news category for the print medium.

It is likely that permission for uplinking for news channels from India would be granted if, among other conditions, at least 3/4th of the broad of directors of the news company and all key execs and editorial staff being resident Indians.

It is also likely that another condition may specify the applicant TV news company is required to intimate the names and details of all persons not being resident Indians and who all are proposed to be inducted on the board of the company.

These conditions may make life for the likes of Zee News and Star News difficult.

Last week, the Indian Cabinet took the bull by its horns and exercising a country's sovereign power to have laws to suit local environs, a la any other country, put a 26 per cent foreign direct investment (FDI) cap on television news companies desirous of uplinking from India. This is at par with the FDI cap prevalent in the print medium relating to news and current affairs. 

In a smart move, the Indian government has also sought to stop backdoor uplinking or by-passing of the new uplinking policy by saying that that any channel or company that uses very small aperture terminals (V-SATs)to uplink from India through Videsh Sanchar Nigam Ltd. would also have to adhere to the FDI cap. Companies like Television Eighteen Ltd. (for CNBC India business news channel with 51 per cent foreign shareholding) fall within this category. 

Meanwhile, government sources today indicated that the new uplinking policy guidelines would be, "more or less", in line with norms for FDI in the news category in the print medium. 

It is also expected that as part of the guidelines for TV news channels, the government may insist that the company desiring to uplink from India should also have an Indian individual holding 51 per cent equity stake, as it has been done for the print medium. 

This step was taken to ensure that the control of the company did not slip into foreign hands in a scenario where the foreign shareholding was 26 per cent and the remaining 74 per cent was scattered amongst, for example, 10 Indians whose shareholding individually would have been less than the foreign shareholding. 

It is also expected that as in the print medium, the government may insist that the full editorial control of a news channel, beaming into India primarily targeting Indian audience, should lie with Indians to ensure editorial integrity. 

If the government wants the guidelines to be more stringent, then it can also insist that those small companies, which have uplink permission or have teleport licence would have to ensure that they do not indirectly rent their facilities to any company that has dominant foreign shareholding. 

Companies like TV Today Network (English news channel), NDTV World, Star News and BBC are awaiting a green signal from the I&B ministry to uplink channels from India. 

However, doubts persist about the case of the British Broadcasting Corporation News that has admitted to that it is seeking an uplink licence from Indian authorities to augment its global news gathering process. 

An official statement from BBC News had sated sometime back that its application for uplink was technical in nature and should not be categorised with those of Star and others. 

Still, quizzed on the issue, government officials are not clear whether the 26 per cent FDI cap would be applicable on BBC News or not. At the end of the day, an uplinking is an uplinking whether it is done for technical reasons (as BBC News is insisting) or to uplink a news channel for Indians (as being said by the likes of TV Today, Star and NDTV). 

The 26 per cent FDI cap, unlike that in other sectors like DTH and the print medium, is inclusive of investments in a television news company by foreign financial institutions, overseas corporate bodies, non-resident Indians and external commercial borrowings. 

The government, however, has made some concessions for existing news channels that have foreign shareholding over the now-prescribed permissible limit and has given them a year's time to go in for equity restructuring to continue availing the uplinking permission given to them earlier. 

The government has also made it clear that though 100 per cent FDI is allowed in entertainment channels, any percentage --- small or big --- of news and current affairs programming on such channels would compel the government to treat them as news channels.

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