TRAI modifies recommendations on TV channel networth

The Telecom Regulatory Authority of India, which had called restricting the launch of TV news channels only to those firms that had assets of Rs 100 crore or more, reiterated its stand after the government said it favored Rs 15 crore as the bench-mark.

In its comments on the government’s stand that the networth should be Rs 15 crore only to encourage growth of independent news sources, TRAI, however, reduced its recommended level by a notch.

“In view of the sensitivity of News and Current Affairs channels and the higher capital and operating costs, it is recommended that the networth requirement may be fixed at Rs 75 crores for the first channel and Rs 15 crores for each additional channel,” it said in its comments on the government’s proposal.

The ministry has the final power to decide the norms while TRAI has only advisory powers. “Ministry is of the view that the Networth requirement should not become so stiff so as to stifle the growth of independent and divergent sources of news and views which is the essence of a healthy democracy,” it had said when it urged TRAI to relook at its recommendations.

TRAI had estimated that the cost of a News Channel at National Level with multiple bureaus at more than Rs 50 Crores and operating cost is in the range of Rs 100-150 Crores per annum.

The Authority also watered down its recommendation that for non-news channels, such as entertainment and movie channels, the company applying for permission must have assets worth Rs 25 crore or more. Currently, the norm is Rs 1.5 crore.

The recommendation too was opposed by the ministry of Information and Broadcasting, led by Ambika Soni. It pointed out that such a steep increase would “benefit only big companies thereby denying an opportunity to the medium and small players in TV channel business.”

It also pointed out that such a move would make it difficult for new entrepreneurs to enter the field and restrict it to a select club of big corporations. Instead, the ministry suggested hiking it to Rs 5 crore instead of Rs 25. In its comments on the Ministry’s suggestion, the TRAI said it is willing to bring down the recommended level from Rs 25 crore to Rs 15 crore.