Nine top media companies including CNN, Star and NBC have joined hands to pressurise the Government for allowing majority equity stake of upto 74 per cent through cross holding in direct-to-home (DTH) and cable ventures.

Top executives of CNN, Star, NBC, Motion Pictures Association of America (MPA), MTV, Sony, Star, and UIH, held a closed door meeting late last week to form a joint strategy on the contentious issue. Of these, the worst-affected would be Star with regard to its DTH venture and UIH, a major local delivery service company from US. These companies, which are all members of the powerful American Business Council, have also decided to lobby their case with the Joint Parliamentary Committee (JPC) on the Broadcast Bill.

Interestingly, the companies are not opposed to a 49 per cent cap on direct foreign equity as mentioned in the draft bill, saidsources.

Also, the companies have not submitted any consolidated list of suggestions to the JPC. The committee had invited suggestions from the broadcasters operating in the country by July 7.

In the closed door meeting, the nine companies have come to a consensus that 100 per cent equity in cable and DTH companies should be continued immediately after enactment of the bill, as the industry is capital intensive, sources said. Phased disinvestment should be allowed after a certain period, the companies said.

With regard to DTH the foreign companies are opposing restrictions on the number of licences to be issued by the Broadcasting Authority of India (BAI). The group is instead in favour of pre-qualifying applicants on technical and financial abilities, sources said.

The companies also hold a contrary view to the idea of auctioning of licences and has decided to uphold the practice of shifting it to a system of fees linked to revenue.

The suggestions that the companies have worked out specifically with regard to local delivery service, are - reduction of the size of cable circles from telecom circle to a more manageable district level, encouragement of the existing operators to grow and meet minimum technical standards and size, and, permitting overlap with existing telecom operators.

The companies have decided to opose mandatory uplinking as an immediate compulsory step, say sources. They are of the view that it is not commercially viable for all the satellite broadcasters as most of them have already entered into long term contracts at other centres. These contracts, in Singapore, Hong Kong and other centres, involve an outlay of excess of $10 million in several cases, sources added.

On cross-media restriction, the companies are in favour of removing the equity restrictions and using alternate methods similar to that in UK, sources said.

In UK, the cross-media restrictions are contingent upon the fact that the reach of a particular media vehicles exceeds 20 per cent of total market share, or, if such holdings go against public interest.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.