Tuesday, July 1, 1997

Liberty Institute ON THE BROADCAST BILL, 1997

My report titled "Liberty Institute ON THE BROADCAST BILL, 1997" was published in July 1997.

Summary: We think the electronic media should not be treated differently from the print media, and should enjoy the protection under freedom of speech and the press. Consequently, the electromagnetic spectrum ought to be privatised and a market allowed to develop for trading space on the spectrum. This will ensure the optimum allocation of the spectrum among various users.


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.


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.


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.


The claim that radio and television broadcasting is intrinsically different from the print medium, and therefore lies outside the purview of the constitutional right to freedom of speech and expression, is untenable. The right to listen or view is a natural extension of the freedom of speech. Even the Supreme Court in a ruling delivered a couple of years ago held that the "guarantees of freedom of speech and expression .... also protects the right of an individual to listen, read and receive the said speech."

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.


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.