[cr-india] TRAI Consultation Paper

[sajan venniyoor]

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I have sent in the following responses to TRAI's Consultation Paper. Please formulate your own replies and send them in as soon as you can, to trai07 at bol.net.in or to rkacker at trai.gov.in. 

Sajan.
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TRAI Consultation Paper on FM Radio – Issues for Consideration
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Type of License

Should there be stipulation on the type of content to be carried on each license or the choice be entirely left to the licensee? If yes, what are the options that should be exercised?

COMMENT: 
The 1995 Supreme Court order on airwaves had specifically stated that it is the “duty of the State to see that airwaves are so utilised” so as to ensure “plurality and diversity of views, opinions and ideas.” This can be achieved only if the programming content is stipulated, as in the UK. Since there is no stipulation on type of content at present, this has led to a proliferation of music channels, all of which sound alike. A recent survey shows that 70% of the audience in a city cannot distinguish one FM channel from the other.

The options depend on the number of frequencies allotted in each city. Ideally, there should be a mix of music, news, sports, talk radio, regional languages, niche programming etc. This is possible only if there is a differential license fee structure, since the commercial potential of each type of channel is different. However, licensees should be required to set aside time-slots on each channel for ‘local access’, to fulfill a public service mandate by broadcasting special audience programmes for the disabled, women & children, linguistic, ethnic and religious minorities, and other marginalized sections of society. These time-slots could be offered to community groups and NGOs for their out-reach requirements. 


Service Area

a) Should we consider licensing of private FM Radio stations on the
basis of city, or should we migrate to the concept of Regional / National Licenses?
b) What types of license should be created on the basis of service area?
c) Whether the locations of the Stations to be put on bid for Phase II can be spread out to cover more towns and further what steps can be
taken to ensure that the coverage is evenly spread out?

COMMENT:
a)	We should migrate to the concept of rural, provincial, city and national licenses. In the present scheme of things, there is no provision for rural licenses, where radio is most needed. 70% of the population lives in rural and remote areas, which are presently un-served by FM or local radio. 
b)	The 10th Five Year Plan specifies the roll-out of FM in un-served areas, especially rural and remote areas, to cover 60% of the population. However, only 70 cities are proposed in Phase II of FM Licensing. Together with the 40 cities in Phase I (of which 28 cities are yet to get a private FM station), that is a total of only 110 cities. This leaves out the entire rural population, and a very large number of smaller cities and towns. 
c)	To ensure greater evenness in FM coverage, frequencies in smaller towns and rural areas, with limited commercial potential, should be offered at lower entry fee / license fee on a first-come-first-served basis.

Duration of Licenses

a) Is there a need to change the present license period?
b) Whether license renewal may be permitted? If so for how many years
and what should be the condition for renewal?

COMMENT:
a)	The Amit Mitra committee has recommended a license period of 10 years, which seems to be excessive. The international norm is about 7 years, which seems adequate. Even if Digital Broadcasting becomes established in India, FM frequencies will remain a valuable resource for years to come.
b)	License renewal may be permitted, but in multiples of 3 years. Licenses could be renewed on the basis of satisfactory performance by the licensee and a social / public audit. Due weight should be given to recognition and awards won by the FM Channel.


Roll out obligation

Should we consider a provincial license for FM Radio together with a
specified roll out criteria laid down in a manner to meet the Tenth plan objectives of 60% population coverage by 2007?

COMMENT:
a)	Rather than persuading the commercial FM operators to enter the rural market (which they have declined to do in Telecom, in spite of threats and penalties), it would be better to offer rural licenses on favourable terms to community groups, NGOs, Panchayati Raj institutions, local self-help groups, cooperatives etc, who have a local presence and a local commitment. This will not only meet the 10th plan objective of 60% coverage by population, this will also serve a social and developmental purpose.


Fund for rural roll out and niche programming

a) Should there be created a FM Radio Fund to improve roll out and / or
to promote non-commercial programs?
b) If yes,
a) What should be the specific targets to be funded?
b) What should be the size of the fund?
c) Who would be entitled to participate in the process?
d) Who would administer the fund?

COMMENT:
a)	An FM Radio Fund would be invaluable in improving roll out in unserved areas, promoting niche and non-commercial programming, capacity building, upgrading technology and research & evaluation, all of which are legitimate and necessary interventions on the part of the Regulator.

a)	Among the specific targets to be funded would be non-commercial channels for those sections of society that are marginalized on the basis of disability, gender, religion, caste or class. Channels on classical music, culture & heritage and other public interest programming could also be supported. 
b)	Dr.Mitra’s Committee has recommended a ‘Universal Service Obligation’ fund, of 1% of the revenue share from commercial operators. This could form the corpus of the Radio Fund, which can be supplemented from other sources, including the publicity funds of various government departments
c)	Awarding the non-commercial and niche channels to commercial operators would be counter-productive, since these channels cannot be run for profit. Niche and developmental programming require dedication and social commitment, which have not been amply demonstrated by commercial operators. Such channels should be offered to groups with local commitment and a proven track-record in the field. 

In his reply to a Parliament Question, the Minister for I&B has stated that the Public Service Broadcaster (All India Radio) has been unable to operationalise over 14 of its existing stations due to staff constraints. AIR, therefore, may not be in a position to take on additional broadcasting responsibilities. 


Licensing process

a) What approach should be adopted to award the FM Radio Licenses in
the second phase in areas where there is no scarcity of spectrum?
b) In areas where there is scarcity of spectrum, which of the above
mentioned approaches be adopted?
c) In case, comparative evaluation criteria is adopted, what should be the different parameters for evaluation, and what weights should these
parameters carry?
d) In case auction route is continued with, what changes are required to be made in the existing process, i.e. should we adopt a one time entry fees + annual revenue share model?
e) In event of auction, whether the entry fees should be the same for all licensees, based on individual bids, based on lowest of all bids?
f) Should the identity of bidders be disclosed at the time of auction?
g) What changes are required in the bidding process to reduce the scope
of litigation and speculative bidding?


COMMENT:
a)	In areas where there is no scarcity of spectrum, licenses should be offered on a first-come-first-served basis, subject to the licensee meeting pre-specified criteria. These criteria should include the type of programming service envisaged, especially the range and diversity of programme content offered, the licensee’s local presence and local commitment, sources of funding the station, agreeing to other stipulated conditions such as monitoring, security etc. Priority should be given to channels that are managed by and / or meant to serve historically disadvantaged groups. 
b)	In areas with scarcity of spectrum, a Comparative Evaluation Process could be adopted, with pre-published criteria. These criteria could include technical and financial aspects, but should focus primarily on the variety of programmes, quality and range of service commitments, quality of programmes etc, to increase the range, diversity and quality of programme content available to listener. 
c)	While commercial, financial and technical criteria should be adopted, greater weight should be given to the proposed programme content of the channel. The working group on Information & Broadcasting sector for the Tenth Plan has cautioned against treating FM radio as a source of revenue. The aim should be to increase the range of content available to the audience. 
d)	In case frequencies are auctioned, a one time entry fee + revenue share (as recommended by the Mitra Committee), seems preferable to the existing license fee regime. 
e)	In case of auction, the entry fee should be based on the lowest bid, to ensure a level playing field.
f)	The identity of bidders should be revealed in the interests of transparency and to prevent surrogate bidders, cross-media monopolies etc. 
g)	No comment.


Quantum of Entry & License fees

a) How should the entry fees be set in case auction is not adopted?
b) What should be the basis of reserve price, when auctions are held?
c) If we adopt a revenue sharing arrangement then what should be the
annual revenue share? Should it very depending on the size of the
city or should it be the same for all areas.

COMMENT:
a)	No comment
b)	No comment
c)	The Amit Mitra Committee has recommended a 4% revenue share, but this should be the higher limit. In the case of un-served and rural areas, the revenue share should be lower, in order to encourage roll-out of FM services and to ensure the sustainability of small and not-for-profit community stations. 


Multiple licenses

a) Whether the number of frequencies that an entity, directly or indirectly, may hold in a particular center be restricted? If so, then to what extent?
b) Whether there should be restriction on number of frequencies
(license) for news and current affairs in any one center?
c) What should be the total number of frequencies that an entity may
hold, directly or indirectly, nationally in each phase ?
d) Whether the content plan for each separate frequency at the same
center being bid for by the same bidder must be different to ensure
wider availability of choices to the listeners?
e) Whether the licensees should maintain separate accounts for each
frequency allocated to them?

COMMENT:
a)	An entity may be permitted to hold no more than 15% of the licenses in a particular center, to prevent monopoly of radio services. 
b)	News and current affairs licenses in a location should be restricted to 20%, if the number of frequencies available is 5 or more. Otherwise, at lease one N&CA channel should be mandated in each center. 
c)	Nationally, a single entity should not hold more than 15% of the available frequencies in each phase. 
d)	Content plan for each frequency in a city should be separate, regardless of whether it is held by one entity or different entities. This is the only way to ensure “plurality and diversity of views, opinions and ideas” envisaged by the 1995 Supreme Court judgment on airwaves. 
e)	No comment.


Program Code

a) Do the existing laws of the country impose sufficient self-restraint on the licensees or is there is a need to impose any Program Code?
b) Are the existing guidelines on AIR sufficient or do they require any
amendments?

COMMENT:
a)	A Programme Code is required for all forms of broadcasting, and such a code already exists for Radio and TV. However, the existing laws of the country are adequate to cover those broadcasting contingencies that are not addressed by the General Broadcast Code. 
b)	The existing AIR Programme Code is a perfectly valid document, and can apply to all FM services.

Technical issues

a) Should we continue to mandate co-location of transmitter sites? Or
should this be mandated only in the event that multiple licenses are
issued and restricted to the holder of such a multiple licensee?
b) If no, what should be the spacing between frequencies in the same
city?
c) Should we specify maximum or minimum transmitter power and Height
of tower?
d) How to specify reasonable coverage requirements on the Service
Providers?
e) Should the licensees be permitted to install antenna outside the
premises?

COMMENT:
a)	Co-location of transmitter sites is not always feasible or necessary. 
b)	Internationally, a channel separation of 200 KHz is considered adequate to prevent interference.
c)	Transmitter power and height are not the only factors that determine coverage area and coverage population. There are many other variables like antenna gain, the terrain, natural and man-made obstructions, population dispersal etc. It may be more realistic to prescribe the coverage area and/or coverage population and work backwards to determine the required ERP, transmitter height, power etc.
d)	 No comment.
e)	Yes, licensees should not be forced to co-site their studios and transmitters, since this is not always technically possible or desirable. However, if one licensee holds a particularly suitable transmitter site, he/she should be required to share it with others. 


Networking

a) Whether it should be allowed between broadcasters in the same city?
b) Whether between broadcast stations of the same entity in different cities
be permitted?
c) Whether between different broadcasters across the cities?
d) What safeguards are necessary for ensuring that competition aspects are not compromised in the process?

COMMENT:
a)	Networking should not be allowed between broadcasters in the same city, to prevent monotony of programming.
b)	Networking may be permitted between broadcast stations of the same entity in different cities only in the case of developmental or public service programmes, provided the content is locally relevant and the language is spoken by a substantial local population. Sharing of entertainment programmes should not be permitted.
c)	Networking between different broadcasters should not be permitted, as it may lead to oligopolies, and a lack of diversity in programme content. However, public service programmes may be exchanged between broadcasters, to reduce costs. 
d)	To ensure that competition aspects are not compromised by networking, it must be ensured that entertainment programmes are not networked, that only national and international news, and developmental programmes can be exchanged. 


News & Current Affairs

a) Whether the restriction on news and current affairs be lifted for the phase II licensees?
b) What other conditions are required to be imposed on the licensees?
c) Is there a requirement to impose special codes for broadcast of
News& Current Affairs.

COMMENT:
a)	Since radio is an intensely local medium, and local news forms the major part of local content, News and current affairs programmes should be permitted in Phase-II of FM licensing. Besides, news is already permitted on all other electronic media, including TV, the internet and satellite radio, and it seems pointless and untenable to ban news on FM radio.
b)	If News is permitted, the licensee should be required to broadcast 80% local news and only 20% national and international news. This will ensure due emphasis on local events and local information, which is the raison d’étre of a local medium like FM. 
c)	This existing Programme Code of AIR adequately covers the broadcast of news and current affairs. 


Co-location

a) In view of the difficulties expressed by the private broadcasters, whether co-location be made mandatory in Phase-II?
b) If so, what should be the mechanism for such co-location out of the three options below:
o Use AIR towers wherever technically feasible
o Licensees make their own arrangement through mutual negotiation.
o Mandated Third Party such as BECIL be required to construct
towers on terms and conditions to be either agreeable to all
parties or decided by the Regulator/Government.

COMMENT:
a)	Co-location should not be made mandatory, in view of the difficulties faced by private broadcasters in Phase-I. 
b)	Ideally, AIR towers should be used wherever technically feasible, otherwise a third party like BECIL can set up towers on terms decided by the Regulator in consultation with FM operators.


Penalty for non operationalisation of license

a) In light of the above discussions, comments are invited on the penalty that should be imposed for Non-Operationalisation of the awarded Licenses.
b) The manner in which the value of performance bank guarantee should be fixed for a revenue sharing mechanism.

COMMENT:
a)	No comment.
b)	No comment.


FDI limit

The issue for consultation is whether FDI be permitted in this sector
and what should be the limit of FDI?

COMMENT:
A 26% FDI, on the same terms as in TV and the Press, seems reasonable.

Increase in frequencies

Should the non operationalised licenses of IGNOU be included for
licensing in Phase II?
 
COMMENT:
IGNOU has been able to operationalise only 10 of the 40 frequencies allotted to them in Phase-I. Of the 108 other frequencies auctioned to commercial operators in Phase-I, only 22 have been operationalised. All these frequencies should be made available in Phase-II, subject to the condition that IGNOU will be given suitable time-slots on either AIR or other channels if such time-slots are required in any city.

Non Commercial licenses

a) Should certain frequencies be reserved for niche channels to be
tendered separately with a low reserve fee and low revenue share
percentage?
b) If so, the terms and conditions to be prescribed to ensure that such
channels are exclusively developed for niche programming and there
is no partial niche programming?
c) Whether Government should release additional frequencies to
encourage such niche channels?
d) What should be the licensing regime for community stations so that
these can increase rapidly.

COMMENT:
a)	Yes, frequencies should be reserved for niche channels, and tendered separately with low reserve fee and low revenue share. In case of special audience channels, like channels for the disabled, the reserve fee and revenue share should be waived altogether.
b)	The only way to ensure adherence to programming mandates is by regular monitoring and the preservation of broadcast logs and tapes.
c)	The government should set aside frequencies across all locations for niche, developmental and community radio channels. 
d)	Community Stations are expected to be licensed primarily in un-served, rural and remote areas, where commercial operators are unlikely to penetrate. Community stations should be licensed to local self-help groups, NGOs, registered co-operatives, Gram Sabhas, Panchayati Raj institutions, educational institutions etc, to be run on a not-for-profit basis. As such, they should be encouraged with minimal license fees (or entry fee + revenue share). A uniform license fee of Rs.5000 could be considered for community stations. Similarly, a lower spectrum usage fee of Rs.10,000 could be levied on Community Stations. 

Effective date of license

In light of the above, what roll out period should be specified in the
license?

No comment.

Migration related issues

a) Whether migration of existing licensees to revenue share regime in FM Radio be permitted? If yes, should there be any special conditions
attached to this migration?
b) Which all categories of licensees be considered eligible for migration?
c) What should be the pre-requisite conditions that these operators be
asked to meet before migrating?
d) What should be the cut-off date i.e. the date of migration?
e) What should be the terms & conditions of the migration package?
f) Whether the Government should consider payment of license fees due
till the date of migration as the entry fees for the migrants?
g) In case, the government decides to give national / provincial license, should the existing service providers be granted these licenses to improve their viability?
h) Whether there is likely to be any difference in the terms & conditions of those who may be given the option of migrating and the new entrants

No comment.

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