The government has initiated a process to further liberalise FM Radio and direct-to-home (DTH) businesses. In FM Radio, there are restrictions on the number of radio channels a company can operate in a city and also in the country. As far as DTH services are concerned, broadcasting companies and/or cable network companies are not permitted to jointly own more than 20 per cent equity in DTH companies, and vice versa.

The information and broadcasting (I&B) ministry has on Tuesday written a letter to the Telecom Regulatory Authority of India (TRAI) seeking its view on the issue. The regulator will soon begin consultations with various stakeholders as a first step in recommending new guidelines.

In the case of FM radio, there are two important restrictions. One, a company can not operate more than one channel in a city or a licence area. Two, the number of channels a company can own should not exceed 15 per cent of the total number of channels allocated in the country.

When the FM radio policy was formulated, it was envisaged that the restrictions would prevent few companies from cornering big chunks of spectrum available for radio channels. It was also felt that spectrum being a scarce natural resource should be used judiciously. Further, it was seen as encouraging competition. But the industry is opposed to this policy.

On DTH, the I&B ministry has sought a review of the 20% cap on equity of broadcasting companies in cable networks and vice versa. Sources in the government said with more broadcasting companies entering cable services business, such restrictions were needed to be examined.

... contd.