NEW DELHI: Even as the government is on its way to commence e-auction for FM Phase III to extend the reach to a total of 839 new FM radio channels in 294 cities, it has come across some stumbling blocks that may result in some delay.
The Information & Broadcasting Ministry (I&B) has recently prepared a note which has been circulated to the concerned ministries/departments for their views, before it is put up before the Union Cabinet in the next few weeks.
I & B Ministry sources told Radioandmusic.com that apart from the problems that may arise because of the first-time e-auction for which cabinet permission will be sought in advance to avoid delay, issues such as charging of migration fee from existing permission holders, and specific departures in the Requests for Proposals (RFP) had not been taken into account when the Cabinet had approved the Phase III proposals on 7 July last year.
Meanwhile, the Ministry has decided to commence work on the e-auctions and called for tenders from next month. The pre-qualification for the bidders is expected to be completed in another two months, following which the qualified companies will be allowed to participate in the e-auction for FM Phase III.
The e-auction expected to begin early next year may take another two or three years in view of the large number of stations.
FM Phase-III Policy will extend FM radio services to about 227 new cities, in addition to the present 86 cities, with a total of 839 new FM radio Channels in 294 cities. The sources said a total of 216 cities and towns are to get private FM radio for the first time in Phase III, out of the 302 identified by the Government and split into four categories. Of the 86 cities and towns which have private FM Radio channels, 67 are to get additional channels.
The issues relating to the e-auction have been pointed out by the inter-ministerial committee set up in November last year and headed by then I & B Ministry Additional Secretary Rajiv Takroo.
The committee with nine members of whom I & B Joint Secretary (Broadcasting) Supriya Sahu is the member secretary was set up to ‘guide and supervise the process of e-auction and grant of license to private parties’ for Phase III.
This committee was expected to finalize and seek approval of the RFP document for selection of agency for conducting the e-auction for award of license of FM Channels; review the auction framework, finalize the auction documentation, conduct and oversee open house sessions for stakeholders, and guide the agency selected for the e-auction.
Other members are the representatives of the Telecommunications, Information Technology, Legal Affairs, and Economic Affairs departments apart from the Department of Industrial Policy and Promotion, all of whom will not be below the rank of Joint Secretary. In addition, there will be representation of the Director-Finance from the Internal Finance Wing of the I and B Ministry, and the Director General of All India Radio.
A separate Appellate Review Committee was also set up to scrutinize the short-listing of prospective bidders headed by the Additional Secretary and Financial Advisor in the Ministry. It has six other members including the Joint Secretary (Broadcasting) who will be member secretary. They include representatives from Corporate Affairs, Revenue (Central Board of Direct Taxes), Telecom, Legal Affairs, and the internal Finance Wing of the I and B Ministry.
This committee will scrutinize various details including the networth of prospective bidders and put them up on the Ministry website, scrutinize bank guarantees and oversee the other work in that connection.
Under the new policy which also allows channels to beam news of All India Radio, the limit on the ownership of channels at the national level allocated to an entity has been retained at 15 per cent.
The Ministry will appoint an independent expert agency, though a transparent selection process, following established procedure, to conduct e-auction.
The foreign direct and FII limit in a private FM radio broadcasting company has been increased from 20 per cent to 26 per cent.
Thus under Phase –III, all cities with a population of 100,000 and above are entitled to get private FM radio channels.
Private FM radio broadcasters in North East (NE) Region and Jammu & Kashmir (J&K) and Island territories will be required to pay half the rate of annual license fee for an initial period of three years from the date from which the annual license fee becomes payable and the permission period of fifteen years begins. The revised fee structure has also been made applicable for a period of three years, from the date of issuance of guidelines, to the existing operators in these States to enable them to effectively compete with the new operators.
Apart from the fee relaxation, Prasar Bharati infrastructure would be made available at half the lease rentals for similar category cities in such areas. The limit on the ownership of Channels, at the national level, allocated to an entity has been retained at 15%. However channels allotted in Jammu & Kashmir, North Eastern States and island territories will be allowed over and above the 15% national limit to incentivise the bidding for channels in such areas.
Under Phase-II currently in existence, 245 FM channels are operational covering 87 cities, each with a population of over 300,000 or more.
Meanwhile, All India Radio will increase the coverage of its own FM Radio signals from 37 to 90 per cent of the population in a sweeping modernization programme during 2011-16. This would entail digital broadcast in FM band from 50 places in the country including all State capitals and major cities.
The programme will see AIR broadcasting to the entire country with State-of-the-Art technology, having already covered 99 per cent of the population and area under the analogue mode. AIR has made detailed plans of increasing the coverage to 100 per cent under the digital mode. A total 100 per cent coverage would strengthen broadcasting to all strategic border areas as well. Within this 100 per cent coverage on the primary grade signal (MW & SW).