The union information and broadcasting (I&B) ministry has decided to allow foreign participation up to 74 per cent in uplinking infrastructure in the second phase of its broadcasting policy.

Sources said that with the Broadcasting Bill coming up soon, the government may merge phase II and phase III of the uplinking policy. The third phase was to see uplinking by foreign channels, which will be mandatory for them following the bill.

Further, the Broadcasting Bill, which is to be tabled in the forthcoming session of the parliament, may contain an interim provision for the domestic cable industry, sources said.

While foreign equity up to 20 per cent may be allowed in the sector, the union information and broadcasting ministry top brass is believed to beworking out a viable model for organising the cable distribution sector.

Some of the independent cable operators have already proposed the creation government-assisted monopolies in each telecom circle. The ministry, however, is in essence against the idea of creating a monopoly and considering a duopolistic model.

The forthcoming bill would in any case seek to repeal the Cable Networks Act of 1995, sources said. The cable operators have been crying foul against the digital encryption of the channels which they fear would usher in their doomsday and are demanding a legislation for regulating such activities.

On the other aspects of the bill, sources said that the clause stating creation of Broadcasting Council would be removed and the responsibility will be merged with the council, which is to be set up for Doordarshan and All India Radio under the Prasar Bharati Amendment Ordinance 1998.

The bill would, however, contain provisions for setting up the Broadcasting Regulatory Authority of India (BRAI)which will assume a role similar to that of Telecommunication Regulation Authority of India (Trai) in terms of issuing licences to broadcasters and determining the licensing fee.

Perhaps the most critical issues the bill would address are the foreign equity participation in the sector and the cross-media restrictions to be imposed on the existing players.

On the subject of foreign equity, sources stated that in the case of both broadcasting and direct-to-home (DTH), the foreign equity cap would be 20 per cent. "Though the cross-media restrictions are yet to be decided, there is a strong possibility of a 20 per cent limit on ownership of a media company by parties having controlling interests in other media ventures," they added.

The bill would also include policy guidelines for television software companies. Union information and broadcasting minister Sushma Swaraj has already gone on record stating that foreign equity up to 74 per cent will be allowed in such ventures.

The ministry is also believedto be putting in an extra effort in incorporating most of the suggestions made by joint parliamentary committee (JPC) appointed during the tenure of S Jaipal Reddy to recommend the different provisions of the bill.

With the minister sticking to her promises, the bill may succeed in setting the ball rolling for fresh investment in the sector in case the opposition parties decide against blocking its passage.