Introduction
Liberty Institute prepared this report suggesting a broad range of modifications to the Broadcast Bill 1997, which was introduced in Parliament in May 1977. Subsequently, the Bill was sent to a specially constituted committee of Parliamentarians from both Houses. The Joint Committee of Parliament (commonly known as the JPC) was made up of 30 senior MPs from all political parties.
The Bill reflected a welcome consensus on the need to update
the Indian Telegraph Act of 1885. However it almost completely fails
to recognize the role market forces can play in harnessing
the
tremendous potential of the electronic medium.
BACKGROUND
In India, Radio and Television broadcasting have been a monopoly
of the Central Government. The Indian Telegraph Act, 1885, a law
enacted by the British, has been
used to bar private
entrepreneurs from entering the broadcasting
arena. Although quite a bit of the programming is made by private
producers. As a result, we had till very recently only
two television channels
and three radio stations!!
All this suddenly changed with the advent of the satellite TV
in this part of the world in early 1990s. As demand for information
and entertainment grew, entrepreneurs, mostly in the
informal
sector, started setting up small cable TV operations all over the country.
In just over five years, these operators had been able to
connect over 25 million homes. A feat
that the state
sponsored telephone agency had failed to achieve in five decades. Today,
due to cable TV, consumers have access to
20 to 40 channels.
The telecommunication revolution had suddenly arrived on the Indian horizon, virtually bypassing the government. Inevitably this gave rise to a lot of discussion in the media and elsewhere about "cultural invasion", "promotion of consumerism", "possibility of propaganda and misinformation campaigns from abroad", etc. There was even some talk about the feasibility of banning satellite dish antennas.
First, the government reacted by enacting the Cable TV Network Act, 1994. It sought to regulate the thousands of cable TV operators. In the next year the Supreme Court ruled that "the broadcasting media should be under the control of the public as distinct from the government." It also held that the electromagnetic spectrum was a public property and not a state monopoly. The Court directed the Central Government to "take immediate steps to establish an independent public authority representing all sections and interests in the society to control and regulate the use of the Airwaves."
It has taken the government two years to
come up with the Broadcast Bill, 1997.
The immediate provocation being the announcement
by some satellite TV broadcasters to
introduce Direct-to-Home TV service (DTH) in India
in late 1996. The government reacted by issuing
an order prohibiting sale of DTH related equipment till a
proper regulatory framework was put in place. The knee-jerk reactions
from the government was best exemplified by
the fact that rather than utilising these two years
to initiate a broad discussion on the broadcast
policy
before drafting the Bill, the government has now given two weeks
to the JPC to conduct its hearing and submit its recommendations
by the end of July.
BROADCAST BILL, 1997
The Information and Broadcasting Minister has said that Bill aims to
provide a "level playing field to Indian
entities" and "facilitating private broadcasting"
to ensure "variety and
plurality of programmes required in
different regions and different sections of society
in our vast country." The Bill seeks to set up
an "autonomous" Broadcasting Authority of India
(BAI) to regulate broadcasting
by licensing broadcasters, allocating frequencies on
the electromagnetic spectrum, monitor quality, cost and content of
service. The minister hopes that the
Bill will become "catalyst for social change",
"promotion of values of Indian culture" by curbing
monopolistic trends and ensuring competition.
Following are summaries of our response to some
of the basic issues raised by this Bill. (A clause by
clause analysis of the Broadcast Bill, 1997, prepared
by Barun S. Mitra and Dilip
Rangachari, was submitted to the Committee.)
We welcome your comments and suggestions.
THE BASIC PREMISE <>
Definition of Broadcasting
The present era is often referred as the "Information
Age". We have witnessed unprecedented changes in the field of information
technology. With the spread of the Internet, information systems
have become highly personalised and the
distinction between telephony and broadcasting
has blurred. Likewise, the distinctions
between television and a personal computer, between
voice, data, and graphics have all but disappeared. However,
the Broadcast Bill has completely failed to take note
of this, and sought to sustain the old definitions. The Bill ignores
the fact
that with fibre optic cables and digital transmission techniques, the
cable TV and the telephone service provider may be made
to compete against each other.
Market Based Instruments for Allocation of Electromagnetic Spectrum
The Bill hangs on to the fallacy
that the electromagnetic spectrum is a "limited natural resource".
Whereas, modern history shows whenever there has been any cramping
in this regard, the
innovators and entrepreneurs have successfully
responded to widen the alternative
and complementary modes of communication. Examples
being the invention of the telegraph; of the
wireless; of radio and then the short wave, the FM and the single
side band; the television and the UHF and VHF; the copper wires
and then fibre optic cables; of satellite
communication; the development of the Internet...the instances
are legion and ones we're all very familiar with.
Rather than relying on licensing and other restrictions
in an attempt plan the use of the spectrum, attention ought to be
paid to market based instruments for allocation of frequencies.
For
instance, frequencies could be auctioned among various users. The buyers
could have property rights over their
space on the spectrum, and could be allowed to
trade their rights. These
rights could also be made a function
of the power of the transmitters in case
of terrestrial broadcasting, and size of footprint
in case of satellite broadcasting
to minimize interference. The World Wide Web sites of organizations
like the Cato Institute, and
the Reason Foundation have
very good literature on these issues.
THE KEY ISSUES
Broadcasting Authority of India (BAI)
If the BAI is to have such a wide mandate controlling technology, quality,
cost and also content of programmes broadcast, then the only hope
of making it "autonomous" would be to make
it a
Constitutional body, like the Election Commission or
the Comptroller and Auditor General of India. If on the
other hand its function is limited to managing the spectrum,
then it could function like an agency of the government.
Content of Broadcast
There is no need to empower the BAI to
regulate content of programmes. The normal law
of the land, as in the Code of Civil
Procedure and the Code of Criminal
Procedure are
sufficient for the Authority, the government
or anyone else to take action, if aggrieved. Giving such
reserve powers to a state organ would be antithetical
to basic liberal values.
Direct to Home Television Services (DTH)
DTH is merely a "wireless" form of cable TV,
and there is no reason to have a special set of
regulations for it. It is analogous to
the development of the original
wireless
communication that followed the telegraph.
Uplinking Facility
The Bill proposes to make it mandatory for broadcasters to utilise Indian uplinking facility. This is self-defeating. Non-availability of such facilities has not stopped present day TV broadcasters from using uplinking facilities available abroad. The government agency responsible for providing uplinking facility must be made to compete with others.
Financial Support for the BAI
In its limited form, the BAI should be able
to sustain itself from revenue generated from auction of space on the spectrum,
and some form of registration fee from users. This
may be used
primarily to monitor the spectrum usage, and
pull up those broadcasters whose signals interfere
with others. This is the policing work for violation of property
rights.
Powers of Government
The provision that the Central Government, "in public interest",
in times of natural calamities or national emergencies, may take
over control of any broadcasting service is, first, repugnant to
democratic values and secondly, superfluous, in the
light of modern technological developments.
Time Limit for Licence
If the property rights approach to spectrum management is found acceptable then there would be no need for imposing a limit of 10 years on licensees.
Restrictions on Licensees
Today, economies of scale and benefits of specialization are well known in different spheres of economic activity. India has had to pay dearly for such restrictions in the past. There is no reason to turn the clock back in the case of broadcasting. Therefore, prohibiting a Satellite Broadcaster from DTH or Radio Broadcasting, or prohibiting a Terrestrial TV Broadcaster from entering the Terrestrial Radio Broadcasting, does not stand to reason. Likewise a ceiling 20% on cross-media holding, a ban on foreign equity on terrestrial broadcasting, or limiting it to 49% in case of other services, would only retard development in these areas.
A Short Reading List
THE RIGHT TO LISTEN, by Swaminathan S. A. Aiyar, article published in The Times of India, May 4, 1997.
SPECTRUM PRIVATIZATION: Removing the Barriers
to Telecommunications Competition, by David
Colton (EXECUTIVE SUMMARY) (Policy Study No.
208, July
1996, Reason Foundation, San francisco, U.S.A.) Web Site <www.reason.org>
PROPERTY RIGHTS IN RADIO COMMUNICATION: The Key to the Reform
of Telecommunications Regulation, by Milton Mueller
(EXECUTIVE SUMMARY) (Policy Analysis No. 11; June 3,
1982, Cato Institute, Washington, D.C., U.S.A.)
Web Site <www.cato.org>
MOVING TOWARD A MARKET FOR SPECTRUM, by Evan R. Kwerel and John R. Williams (Cato Institute, Washington, D. C.) Web Site <www.cato.org>
