Media Ownership Structures Need A Fresh Look, TRAI Says
Concentration of control has a negative impact on media diversity. With more and more transnational corporations involved in the media industry, there's a need for a system that focuses on capturing cross holdings and direct or indirect control of different organisations by a common entity, the TRAI said in a consultation paper.
To boost viewpoint plurality, tackle dominance of a few players in the digital media landscape, and address the lack of accuracy of online players who at times contradict traditional media, the Telecom Regulatory Authority of India has invited stakeholder comments on issues aimed at reforming the media and entertainment sector.
The consultation paper has sought feedback on a range of issues, including:
Defining control and ownership for the media industry.
Restrictions on cross-media ownership.
Oversight of mergers and acquisitions in the sector.
Issue of vertical integration.
The consultation paper is an outcome of a request by the Ministry of Information and Broadcasting to revisit regulatory oversight of the sector, which has witnessed significant changes with the advent and growth of digital media, the TRAI said.
In view of MIB’s reference, the authority is issuing this consultation paper for seeking comments/views of the stakeholders on the need, nature, and level of safeguards with respect to horizontal and vertical integration in the broadcasting and distribution sectors and cross holdings across various media sectors.Telecom Regulatory Authority of India
Defining 'Control' And 'Ownership' In Media Companies
The consultation paper argues that there is a need to clearly define 'control' and 'ownership' in the media sector. Restrictions based on control by a company can be easily subverted by creating another set of companies by the same entity.
"..here is a need for a system that targets both de facto and de jure forms of ownership". - TRAI
There may be thousands of multi-system operators and hundreds of TV channels in the media market, but if they are all “controlled” by a handful of entities, then there may be insufficient plurality of news and views presented to the people.
The paper also points to control of the media by political entities, surrogate organisations and corporate entities, which can influence coverage, and in turn public perception.
Citing these reasons, TRAI has asked:
The most suitable criteria to define and measure ownership and control.
Whether any entities be restrained from entering the media sector.
Restrictions On Cross-Media Ownership
So far, the TRAI maintained that only news and current affairs genres should be considered as the relevant market for formulating cross-media ownership rules.
The recent paper, however, makes a departure from this approach, citing:
The influence on public perception, value system and beliefs through general entertainment channels.
Coverage of subjects, ranging from history to religion to international relations, by general entertainment channels or GECs that are perceived to be factually correct. Any inherent bias in such coverage will adversely impact society.
The regulator, therefore, proposes to re-examine the relevance of genres for overseeing media ownership.
It has sought comments on whether there should be restrictions on cross-media ownership in one or more type of media segments, segments which should be included for imposition of restrictions, and the number of segments in which a particular entity should be allowed.
Oversight Of M&A
The consultation paper highlights the international efforts in countries like Australia and the U.S. to regulate mergers and acquisitions in the media sector. In India, too, the regulator says, there is a need to reconsider the framework.
The Competition Commission of India, Securities and Exchange Board of India, and the company law tribunals monitor and regulate mergers, acquisitions, and takeovers in the media sector, the TRAI has noted.
Is there a need for sector-specific regulations, the regulator has asked.
It has sought comments on:
Whether there’s a need to monitor takeovers, acquisitions of media companies, especially news media companies.
Which agency/ministry should be entrusted with the task of regulation and monitoring?
What should be the powers of the authority for enforcing regulatory provisions, including imposition of financial disincentives, cancellation of license/registration, etc.
Dealing With Vertical Integration
The need to examine this issue arose from broadcasting companies increasingly investing in distribution operations, such as cable TV distribution; DTH, IPTV, etc., and vice-versa.
The main issue, as per the regulator, is to ensure that ownership/control of an entity does not restrict the ability of the sector to provide factual news and information to consumers from a wide range of sources.
Though the vertical integration of various entities within a particular sector results in reduction in cost to the company as well as offers economies of scale, it often manifests in the form of ills of monopolies viz. higher cost to the consumers, blocking competition, creating barrier to entry for new players to venture into the sector, deterring innovation, deterioration of the quality of service to the consumers in the long run, etc.Telecom Regulatory Authority of India
The questions posed by the regulator on this issue include:
Whether an entity be allowed to have an interest in both broadcasting and distribution?
How should the issues of vertical integration be addressed if an entity has interest in broadcasting and distribution?
Measures to determine control and whether a ceiling of 20% equity holding can be an adequate measure to determine whether a company has control in both broadcasting and distribution.
The feedback has to be submitted by May 10.