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Trai proposes 74% FDI in cable TV

NEW DELHI: The Telecom Regulatory Authority of India (Trai) wants 74 per cent foreign direct investment (FDI) to be allowed in cable TV which would bring the sector in parity with telecom companies.

The current regulation allows only 49 per cent FDI in cable TV while telecos can attract 74 per cent foreign investment.

In a consultation paper released on onvergence and competition in various broadcasting and telecom services, Trai says, "Cable TV network is a carriage for delivering voice, data and TV just like the copper or fibre wires that are being used by the telecom industry for providing these services."

The paper adds, "In view of convergence and future broadband and telephony business, it is suggested that the cable industry should also be allowed parity with telecom."

Pointing out that convergence is already a reality, the regulator said the present paper is based on previous work done by it in individual recommendations on various industry-related issues.

Another key proposal made in the paper is on unification of customs duty. "A number of items pertaining to the cable TV industry, which have similar functions as that of items in telecom, must have similar customs duty rates," it says.

The paper also includes issues for consultation based on the report of a committee that had been set up by Trai to examine issues relating to broadband and telephony over cable TV networks.

In 2004, the broadcast and cable TV services were re-designated as telecom services by the then government to bring them under the purview of Trai.

The consultation paper begins with an introduction to the issues of convergence and competition and goes on to introduce the idea of convergence and alternative definitions of convergence as well as various ways to approach it.

Then the paper, the full text of which is available on trai.gov.in, looks at the impact that convergence has on markets, regulations and consumers and highlights the developments taking place elsewhere in the world.

The issues for consultation are essentially the following:

# Need for a comprehensive legal framework for promoting convergence.

# Approach to unified licensing.

# Technology and service neutral spectrum licensing.

# Issues on which suggestions have been made by the committee on broadband and telephony over cable TV networks such as rationalisation of differential customs duty regime, restriction on use of protocols, license fees and right of way.

"A well-designed scheme of regulation that helps convergence can vastly increase the competitiveness and efficiency of the Indian economy. This is all the more important in an era of growing importance of information and communications," Trai has summed up.

Written comments on the issues raised are to be sent to the regulator by 30 January, 2006.

Also read:

Trai moots 2010 as deadline for digitalisation of cable TV 

Government announces broadband policy

Trai releases recommendations for broadcast sector

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