FM radio: Govt. may opt for partial sops

NEW DELHI: Information and broadcasting minister Ravi Shankar Prasad is likely to agree to partial sops for private players in the FM radio sector, though he is yet to make up his mind fully on a suggestion by the regulator that the annual licence fee may be deferred till a final view on amendments suggested in the existing policy is taken.

According to government sources, the file was sent to Prasad last week only when he was touring Bihar as part of election duty after I&B ministry secretary Pawan Chopra, as reported by earlier, made a noting on the file concerned.

Chopra had stated that acceding to the sector regulators suggestion would not be feasible at this point of time because of the impending general elections as also the fact that it would mean getting a clearance from the Union Cabinet too.

The sources also indicated that the government can over-rule the Telecom Regulatory Authority of India (the sheriff for the broadcast and cable sector) and even the I&B ministry secretarys views. "What needs to be seen is how much political importance does Prasad give to the two viewpoints," an I&B ministry source indicated.

Trai, in an interim measure, had suggested that since its looking into the issue of FM radio broadcasting and the amendments suggested in the guidelines, the government may direct private FM radio players to defer payment of annual licence fee that becomes payable this month-end.

However, government sources also said that some private FM players, especially powerful media companies, have made a representation to the I&B ministry and others in the government, including the Prime Minister, that their licence fee payment may be deferred as Trai is deliberating on the amendments suggested by an expert committee, headed by Dr Amit Mitra.

Soon after such a representation, Trai also came out with a
consultation paper on FM radio seeking opinion from various stakeholders of the industry.

What are the options that Prasad or the government has? Come to think of it, there is more than one of them.

Option 1: Prasad too agrees with I&B ministry secretary Pawan Chopra's line of argument and strikes down the regulator's proposal on deferring the licence fee payment.

Likely Outcome: The private FM radio players would have to shell out a hefty license fee as some of them have licences in more than one city. Especially at a time when most media companies have been investing in their infrastructure with an eye to sharpen their election coverage too.

(The annual license fees, when most of the private FM radio stations started few years back, varied from metro to metro with an in-built clause for a 15 per cent increase every year. The highest fee was Mumbai at Rs 115 million followed by Delhi at 750 million, Lucknow at Rs 70 million and Chennai
at Rs 35 million. Kolkata was the lowest at Rs 10 million.)

Option 2: Prasad uses his discretion and throws up a suggestion that since the new government is likely to be in place by May, the FM radio companies should pay an amount calculated roughly for a month's time.

Likely Outcome: Better than having to pay millions of rupees and then seek refunds from the government - always a difficult proposition - and adjustments. Seems like a good compromise formula.

Option 3: Prasad just forgets about the whole issue citing a busy election schedule.

Likely Outcome: This would be an ideal situation for the licencees, but not so for the government. It could become the butt of criticisms from the Opposition parties, especially the Congress that is now attempting to pull out as many controversial decisions relating to the government as possible.

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