NEW DELHI / MUMBAI: After many years of meandering on the margins (since 1997), the information and broadcasting ministry is ready with a final draft of the Broadcast Bill 2006, which in all likelihood is going to turn out to be controversial and stringent at the same time.

The recommendations that have been proposed in the bill, if they finally become law, are bound to have seismic repercussions in the industry. The draft bill, which calls for the setting up of a separate Broadcast Regulatory Authority of India (Brai), has covered four major areas in its ambit, which would call for major corporate restructuring by media companies, foreign and domestic, operating in India. These include content, cross media ownership, subscriptions and live sports feeds (which are already part of the downlink norms).

Some of the key recommendations as per the draft bill:

* The bill introduces restrictions on cross media holdings in all electronic ventures capping it a maximum 20 per cent. While print media companies have not been included in the ambit of the bill for the present, this could be later extended to them as well.

On restrictions on accumulation of interest, the draft bill states, “The Central government shall have the authority to prescribe such eligibility conditions and condition with regard to accumulation of interest in the print and broadcast segments as may be considered necessary from time to time to prevent monopolies across different t segments of the media.”

What this means is that a broadcaster like Star, for instance, can have a maximum 20 per cent stake in an FM radio venture or a multi system operator.

The immediate fallout of such a bill becoming law would be that Star, which has a 26 per cent holding in the Rajan Raheja-promoted Hathway Cable & Datacom MSO, would have to bring down its stake by 6 per cent.

It seems that the demerger that took place in Zee Telefilms could prove to be beneficial for the company. Down South, the Sun TV group would also have to restrict its interest in cable distribution companies like Sumangli.

In this regard, the draft bill states, “No broadcasting network service provider and its associated companies shall have more than 20 per cent share of paid up equity or have any other financing or commercial arrangement that may give it management control over the financial, management or editorial policies of any other broadcasting network service provider…”

* No broadcasting service provider (television company) can hold more than 20 per cent equity in another TV company. Additionally, no TV company can own more than 15 per cent of the total number of television channels beaming in the country.

“No content broadcasting service provider shall have more than the prescribed share of the total number of channels in a city or state, subject to overall ceiling of 15 pr cent for the whole country,” the draft states.

* A broadcast network service provider (presumably multi system operator / cable operator) cannot have more than 15 per cent of the national average in regards to subscriber numbers.

What this means, at the moment as an explanatory annexure are not available, is that if 60 million is the C&S national subscriber average, an MSO like Zee group's SitiCable or the Hinduja-owned INCablenet or Sumangli, for example, cannot exceed 9 million paid subscribers in a city or a state.

“No broadcasting network service provider shall have more than the prescribed of the total number of consumer/subscribers in city or a state subject to the overall ceiling of 15 per cent for the whole country,” the draft bill states.

* TV channels on a mandatory basis would have to have a certain prescribed percentage of content produced locally and also carry socially relevant programmes.

“The share of content produced in India shall not be less than 15 per cent of the total content of a channel broadcast during every week,” the draft bill states.

It also goes on to state that the share of public service/socially relevant programme content shall not be less than 10 per cent of the total programme content of a channel broadcast during every week.

This would mean that channels like Cartoon Network, Animax, Discovery, Animal Planet and Discovery Travel and Living would have to have a prescribed percentage of content generated from India, which has been a long-standing demand of Indian animators.

*Cable Ops / MSOs to operate only on licence from Brai.

This could well be the catalyst that brings in some order into the cable industry. At present, the only requirement for anyone wanting to start cable services is that he/she should fill in the prescribed form at any post office and pay the nominal fee.

* Existing laws and guidelines relating to broadcasting, TV and radio, would subsume under this over-arching regulatory framework.

This would mean that laws and guidelines relating to FM radio, DTH, community radio, uplink and downlink of channels and use of SNG/DSNG infrastructure would cease to exist and assimilate with the broadcast law.

The Broadcasting Services Regulation Bill 2006 is presently being circulated among members of the Union Cabinet. Depending on the Cabinet direction, the bill is scheduled to be tabled during the Monsoon Session of Parliament.

TV and cable companies refused to comment on the draft proposals today, saying they are yet to see the government paper, which needs to be studied in detail.