Politicians and corporate heavyweights will find it tough to own a media house, if the Government accepts the suggestions made by Telecom Regulatory Authority of India (TRAI). While it has barred the entry of political and Government entities, the regulator has proposed curbs on entry of non-media corporates.
The regulator, in its report on ‘Issues related to media ownership’ released on Tuesday, said: “On grounds of inherent conflict of interest, ownership restrictions on corporates entering media should be seriously considered by the Government and the regulator.”
This, according to TRAI, may entail restricting the amount of equity holding and loans by a corporate in a media company, to comply with provisions relating to control.
The need for such a report arose following the recent surge of corporates acquiring media houses and the growing influence of politicians in the sector. TRAI was asked by the Ministry for Information & Broadcasting to come up with recommendations on the issue.
Calculating control
The TRAI has also suggested a framework to calculate control or dominance by a single entity in both the print and broadcast media and also recommended setting up of an independent regulatory authority to look into issues such as paid news, private treaties and editorial content.
Jehil Thakkar, Partner and Head of Media & Entertainment, KPMG in India, said if these recommendations are implemented, they will impact several media groups. Analysts point out that several media groups will need to restructure their organisations and restrict control.
While it bars entry of political, religious, urban, local, and other public-funded bodies, and Central/State Government ministries, companies, public sector entities, joint ventures and their affiliates into this business, the report also offers an exit option.
It has proposed that in case permission has already been granted to them, they should also be provided an appropriate exit route.
Arm’s length relationship On the Government and Prasar Bharati’s relationship, it has suggested that the Government maintain an arm’s length with the public broadcaster, Prasar Bharati.
Recommending the HHI (Herfindahl Hirschman Index) to measure domination in a media segment in a relevant market, the regulator has said that if a single entity is dominating both the print and news broadcasting segment, it needs to dilute stake in at least one of these.