The Telecom Regulatory Authority of India (TRAI) today said any entity with more than 20 per cent stake in a broadcasting company cannot own more than 20 per cent in a distributor and vice versa.
In a statement released on its web site, the telecom and broadcasting regulator said there will, however, be no restriction on cross-ownership across telecommunications and media companies.
TRAI said the decision will be reviewed after two years.
Broadcasters will get three years for restructuring their holdings in distribution, TRAI added.
TRAI released the recommendations on media ownership after the ministry of information and broadcasting sought TRAI's views on the need for cross media and ownership restrictions in India for radio, broadcasting and print media.
The ministry had clarified earlier that looking at the increasing trend of the print media entering into broadcasting sector, the TRAI should also include print media while examining the need for any cross media restrictions vis-à-vis broadcast media.
TRAI had issued a consultation paper on 23 September 2008 on the various underlying issues relating to media ownership in India such as cross media ownership across different segments of media, viz, print/ television/ radio (horizontal integration), cross holding restrictions to prevent consolidation including 'vertical integration' within a media segment, limits on number of licences held by an entity, market share in the city/state/country combined across media segments and cross control/ownership across telecom and media segments. Thirty-five stakeholders have offered written comments on the consultation paper, which are available in the TRAI website (www.trai.gov.in). An open house discussion was held at New Delhi on 2 December 2008, TRAI said.
TRAI said it considered various points of view based on submissions it received during the process of consultation. Considering the international scenario, stakeholders' comments, present economic scenario, the distinct features of Indian scenario and other relevant factors, the regulator has formed a view that it is better to put timely safeguards rather than looking for corrective measures which become difficult for the industry to align in the future.
''Appropriate positive safeguards need to be put in place to ensure that plurality and diversity of views are maintained. A supportive regulatory environment and well defined safeguards put in place at this stage of development will facilitate the orderly growth of the industry. The original rationale for these safeguards is to guarantee a multiplicity of voices and prevent concentrations of power, which are vital for matured democracy,'' TRAI pointed out.
''The current global financial crisis has its impact on the Indian media industry, particularly the print media. There are reports on diminishing advertisement revenues and employee lay offs. In such a scenario while all the steps are being taken to help the media industry get through the situation and reduce the impact of slowdown, it is essential that none of the safeguards should have an adverse impact on the sector,'' it said.
''The safeguards should be seen as a part of clear and transparent regulatory framework which will enable the existing media owners and the potential investors to take appropriate decisions, thereby helping the long term growth of the sector. The rationale for these safeguards is to guarantee multiplicity of voices and prevent concentrations of power, which are vital for mature democracy,'' it added.
Media ownership is a subject of intense debate and government review in both developed and developing countries around the world. Many of the developed countries like the US, the UK, Canada, Australia and France have restrictions on common and cross media ownership. Many of these countries have recently reviewed the media ownership rules and have taken a decision to continue with the restrictions, the TRAI release pointed out.