NEW DELHI: There is a very remote chance of the bid for any channel going too high in an ascending e-auction for FM Radio Phase III, since no single media group can have more than fifteen per cent of the total number of channels.
Former Information and Broadcasting Ministry Secretary Uday Kumar Varma told radioandmusic.com in an exclusive interview that an ascending e-auction would ensure transparency, and reiterated that it would not result in keeping out new players from bidding.
Referring to criticism that an ascending e-auction may result in the final bid going very high and make it easier only for the big players to grab them, he said this may happen only in the metros – ‘if at all’.
Under the guidelines issued in early May this year, the limit on the ownership of Channels at the national level allocated to an entity has been retained at 15 per cent. However channels allotted in Jammu & Kashmir, North Eastern States and island territories will be allowed over and above the 15% national limit to incentivise the bidding for channels in such areas. Private operators have been allowed to own more than one channel but not more than 40 per cent of the total channels in a city subject to a minimum of three different operators in the city.
Varma also said that an ascending e-auction was not confined to just one round, and may go on for three rounds with the result that all players will have an equal chance to bid.
FM Phase-Ill Policy extends FM radio services to about 227 new cities, in addition to the present 86 cities, with a total of 839 new FM radio Channels in 294 cities. Phase -III policy will result in coverage of all cities with a population of one lakh and above with private FM radio channels. The clearance will help in setting up of 839 new radio stations in the country and will help the government garner revenues to the tune of Rs 1,500 crore, he added.
Apart from a one-time entrance fee, bidders will pay annual licence fee that would constitute 4% of the gross revenue earned or 2.5 per cent of the onetime entry fee.
While welcomed the clearance of FM phase III expansion, the private channels had expressed concern over possible high licence fee. They also felt that the radio (licence) auctionhould not be done on the lines of 3G auction since radio users do not pay for content.
Asked why the Government was going in for FM Radio Phase III when All India Radio was in an advanced stage of research into bringing in DRM (Digital Radio Mondiale) technology, Varma said it had to be understood that DRM was a technology more suited to medium wave or short wave and not FM.
In any case, he said that DRM sets were presently very expensive and this was not available on mobile phones which could only receive FM signals.
Steps would therefore have to be taken for getting cheaper DRM sets before it is introduced. He said the argument that demand and supply will bring down the prices was erroneous as the sets were very expensive.
Referring to AIR’s experiments, he wondered why AIR had not insisted on being cheaper sets when they acquired the transmitters for DRM from foreign entities. He said the pricing of the sets could have been fixed at the time when the transmitters were being bargained for.
Asked if it was possible to have national FM Channels as suggested by some senior officials, he said this was possible but will take some time. He was reacting to a question abut a suggestion by Prasar Bharati Chief Executive Officer Jawhar Sircar to build a network of FM transmitters so that signals from one station could be passed on to the next and a person driving from Delhi to any city would not need to change the channel whatever the distance.
Meanwhile, the FM Phase III guidelines have permitted radio operators to carry news bulletins of All India Radio.
Broadcast pertaining to the certain categories like information pertaining to sporting events, traffic and weather, coverage of cultural events, festivals, coverage of topics pertaining to examinations, results, admissions, career counselling, availability of employment opportunities, public announcements pertaining to civic amenities like electricity, water supply, natural calamities, health alerts etc. as provided by the local administration will be treated as non-news and current affairs broadcast and will therefore be permissible.
FDI+FII limit in a private FM radio broadcasting company has been increased from 20% to 26%. However, the Telecom Regulatory Authority of India in July reiterated its earlier proposal for increasing the foreign direct investment for FM Radio to 49 per cent.