Media houses call against FDI in broadcasting

Many Indian media houses, both in print and electronic, have expressed concern to the government over its proposal to allow higher foreign investment in the broadcasting sector, pointing out that such a move would be totally inconsistent with the established media policy of the country, it is learnt.

They have drawn the attention of various ministries to the anti-FDI stand taken by the government more than 10 years ago in the case of the media and broadcasting sector.

According to some media barons, the need to safeguard the media sector from foreign control is even more necessary at this point as technology is advancing by leaps and bounds.

Replying to a civil writ petition, the government had submitted an affidavit to the Delhi High Court in 1997, pointing out that the “the government is anxious to see that powerful foreigners or foreign companies do not take over and monopolise the broadcasting in the country, which is so crucial for effective functioning of our democracy”.

The government had stated in its affidavit that control of powerful distribution platforms and infrastructure by foreign companies and foreigners “will be detrimental to our (India’s) sovereignty apart from influencing and corrupting the Indian values and culture”.

Carrying the point forward, a top industry representative had recently written to I&B minister Ambika Soni and home minister P Chidambaram, indicating that the government proposal to hike the foreign investment limit in direct-to-home (DTH), cable and headend in the sky (HITS) services from 49% to 74% was “detrimental to the growth of the Indian media industry and is fraught with danger as media is a sensitive sector and DTH, cable TV, HITS being the media content carriers, are integral part of media establishments.”

The letter reiterated that “the existing restrictions of foreign investments in these platforms was a well-considered and carefully thought out decision on the part of the government…”

It added that “giving controlling stake in a media business whether in content or in distribution platform to the foreigners may lead to the danger of gradual manipulation of the public views and ultimately can destroy the delicate fabric of composite culture, value system and secular nature of the country.”

On the comparison between the media and telecom sectors, a source pointed out that media is a very sensitive sector and “therefore it has been recognised that a differential treatment is needed as is done in various other countries as well.”

Even in some advanced economies like the US, where 100% FDI in telecom is allowed, they continue to maintain a differential policy on ownership of media sectors.

Touching upon the recent Press Notes 2, 3 and 4, issued by the department of industrial policy and promotion, in the commerce ministry, officials in some media companies have said that the new methodology to calculate FDI would enable foreign companies to easily control Indian entities.

This applies to the media sector also, “as recently many news channels have successfully used this route to circumvent the FDI licensing condition,” a source said. The FDI cap in news channels is 26%.

A section of the media business believes that “under these circumstances, there is no need to for further increase in FDI limit in the media sector.”

Raghu Menon, secretary in the information and broadcasting (I&B) ministry, recently
wrote to chairman of the telecom regulatory authority of india (Trai) J S Sarma, seeking a review of the FDI recommendations for the media and broadcasting sector.

Last year, Trai had recommended allowing higher FDI in many of the media and broadcasting segments, following which, a Cabinet paper was prepared incorporating some of the regulator’s suggestions. Several top industry representatives have opposed the move ever since.