NEW DELHI: The Phase III of FM radio expansion has been deferred to resolve certain issues primarily relating to royalty for music.

Information and Broadcasting Ministry sources said the issue had already been taken up with the Human Resource Ministry which administers the Copyright Act.

The sources clarified to radioandmusic.com that the channels that had been licensed in Phase II had complained that they were unable to break even primarily because of the huge royalty they were forced to pay to the music companies.The methodology of fixing royalty will be discussed, particularly as to the basis on which the royalty payment should be fixed.

The source also confirmed that the issue of permitting news on private FM Radio channels was also under consideration.

While the I&B Ministry wanted that the news, if permitted, should be taken from Prasar Bharati (All India Radio), the Telecom Regulatory Authority of India (Trai) as well as Ficci had insisted on news agencies being the source of news.

The third phase is expected to cover a total of 92 cities, according to the plan drawn up by Trai.

FM Radio broadcasting was first launched in the country in 1999 and subsequently 21 private channels became operational.

Based on the popularity of FM Radio among the masses, the Government offered 337 new channels for bidding by private agencies covering additional cities and towns in Phase–II in July 2005. As a result, Letters of Intent (LOI) for 245 channels were issued.