I&B ministry rejects clock auction for FM radio III

The auction of 806 FM radio stations across 217 new towns in the third phase (FM-III) of private FM radio will be held on closed tendering process instead of the online clock auction methodology adopted by the telecom ministry in awarding the 3G and broadband spectrum.

The ministry of information and broadcasting (I&B) is said to have turned down the request from the Committee of Secretaries (CoS), which had recommended it to model the FM-III auctions on similar lines as done by the department of telecommunications in the 3G and broadband auctions recently.

The CoS had earlier urged the I&B ministry to adopt the e-auctions methodology for the FM-III auctions so as to impart fairness and transparency, and also to maximize the government revenue.

I&B ministry in its Cabinet note on the policy guidelines for FM-III has said that the telecom model is fundamentally different and can not be adopted for FM licenses. This comes in line with the collective view of a number of existing private FM radio operators who voiced their opposition to the online ‘clock auctions' recently.

Now the I&B ministry will adopt the system of closed tender, two-stage sealed bidding process. In the first stage, the technical and financial status of the bidders will be evaluated based on the FM-III guidelines. In the second stage, all eligible bidders will have to submit their financial bids for FM frequencies, which will be auctioned based on city-wise classification, sources said.

The Cabinet will take up and clear the FM-III policy within, next few weeks the after which the I&B ministry will issue the guidelines for the third-phase expansion of FM radio within a month. The FM-III will put up for auction 806 FM radio frequencies across 283 towns, of which 217 towns will get access to private FM radio for the first time.

I&B ministry is likely to auction the 806 FM stations in batches over a period of three years starting in 2011. This means, the FM-III auctions will be held in three stages and all of the 806 FM frequencies will be auctioned only by 2013.

Experts say the main action will be in the A+, A, B and C category towns which have already been exposed to FM radio.

In FM-III, the government has increased the foreign investment cap from the existing 20 percent to 26 percent. Also, news will be allowed in FM-III but the operators will have to source the same from All India Radio. FM operators in the third-phase will also be able to own more than one station in a city. However, there will have to be three different operators in a city in which one company-multiple channel policy can be implemented. Also, operators can not own more than 40 percent of the total channels in such a city.

DD Direct Plus augmentation to cost Rs.554 million

The augmentation of the capacity of the country's only free direct-to-home platform, DD Direct Plus, to 97 channels will cost Rs. 554.3 million. The augmentation in the first phase will be completed on March 31, 2011. The plan is to increase DD Direct Plus' capacity to 200 by the end of the financial year 2011-12.

The platform currently has a capacity of 59 channels while it presently beams 57 TV channels, apart from 21 channels of All India Radio. The TV channels include 21 Doordarshan channels.

Around 90 television channels by 82 applicants are in the queue for being uploaded on DD Direct Plus. These include some foreign channels as well. The oldest of these applications was made on March 7, 2007, while the host recent was made on April 12, this year.

Apart from many other channels, some of the applicants include TV24, NE TV Group, Sakshi TV and Star News. The channels include three foreign channels: Japan's NHK TV, Korean Broadcasting Corporation and Deutsche Welle. Around ten more foreign channels are expected to join soon.

The annual carriage fee that broadcasters have to pay has also been lowered to just Rs. 2.5 million from the earlier Rs. 10 million, apart from a service tax of Rs. 300,000. However, foreign broadcasters have to pay a carriage fee of Rs. 5 million.

Being an FTA channel, DD Direct only has a one-time charge for dish antennae, set-top box, and installation ranging between Rs. 4,000 to Rs. 8,000 depending on the brand chosen by the consumer.

More broadcasters move TDSAT against TRAI new tariff regime

Joining other broadcasters, Viacom 18 Media and Sun TV have approached sectoral tribunal TDSAT, challenging TRAI's tariff order to cap wholesale price of channels for DTH and IPTV service providers at 35 per cent of the rates they charge cable operators.

Currently, the broadcasters charge DTH and IPTV players 50 per cent of what they charge cable operators.

In two separate appeals filed before Telecom Disputes Settlement and Appellate Tribunal (TDSAT), Viacom 18 Media and Sun TV Network said that the tariff suggested by the broadcast regulator was not commercially viable for them.

The broadcasters submitted that while fixing the tariff, TRAI has acted in an arbitrary and unreasonable manner and did not consider the suggestions of the stakeholders.

Their appeals were clubbed with the petitions of four other leading broadcasters - ESPN Software India, MSM Discovery, Zee Turner and Star Den Media Services - which had approached TDSAT on August 23, challenging TRAI's direction.

All petitions will be jointly heard by the tribunal on September 14. The TDSAT has directed the Telecom Regulatory Authority of India (TRAI) to file its reply by September 6.

TRAI noted on July 21 that a new wholesale tariff structure would be effective from September 1, whereby broadcasters will charge only 35 per cent of the rates that they charge cable operators while supplying to service providers using different digital platforms such as DTH, IPTV and HITS.

Broadcasters offer cheaper rates to operators like DTH and IPTV as they can ascertain the number of subscribers of these players, which is not the case with cable services where under-reporting is believed to be very high.

On August 23, TRAI informed TDSAT that the new tariff would be effectively operational from October 1, 2010, and not from September 1, as notified in the circular.

INSAT-4B partial failure continues

The INSAT-4B satellite had been forced to shut down 50 percent of its transponders, due to a power systems failure, 6 Ku Band and 6 C band transponders had been shut off.

The entire SUN Direct DTH service had been shut down. Initially 6 transponders (all Ku Band vertical polarisation) of Sun DTH had been shut down. Of these, 3 have been restored though they operated at a power output. The downlink frequencies of the restored transponders are: 11030 V; 11110 V & 11610 V. transponders at 1185 V, 11530 V, 11645 V & 11675 V are still non functional, and may take another fortnight.

To avoid realigning more than 2 million SUN Direct DTH dishes, the DTH platform will have to find a new home within 5 degrees of its original location at 93.5 degrees East.

Existing users of the discontinued C & Ku band TV and DTH channels may have to relocate to another satellite. Existing procedures require that Ku Band transponders be leased only through ISRO. If ISRO does not have the necessary capacity, it will lease out transponders from other international satellites and sub-lease them to the Indian TV channels / DTH users.