No country bans broadcasters from getting distribution licences
Broadcasters are concerned more than others for providing viewers standard and cheap telecast; they have to deal with distributors on local and international level so it is better to make own network; many countries do not allow foreign investment in media industry while some countries used to change limits in this regard; Pemra argument is baseless as any dispute is resolved by regulators through tribunals
ISLAMABAD: The Pakistan Electronic Media Regulatory Authority (Pemra) on Wednesday held its DTH licence bidding under Supreme Court order which had made award of licence under bidding conditional to the decision of the Lahore High Court (LHC) in a petition filed by Geo TV challenging broadcasters’ ouster from DTH licence bidding.
The broadcasters are the biggest stakeholders in the electronic media industry and there is in no country which bars its broadcasters from TV distribution licences like Pemra has done. Globally vertical integration i.e. ownership of TV distribution networks by broadcasters is an industry norm. Broadcasters are much concerned to see their channels reach far and wide in the best quality and affordable manner to the viewers. The broadcasters already deal with distributors locally and internationally and such experience is handy once they decide to launch their own distribution networks.
With presence of broadcasters in TV distribution, a healthy competition takes place in TV distribution market and end beneficiary are the viewers. The Pemra has allowed DTH licensees to operate five TV channels, which makes them broadcasters as well but does not allow broadcasters to enter distribution space. This is clear discrimination with local broadcasters. Pakistani broadcasters are already reliant on one source of revenue i.e. advertising as no distribution fees are paid to them by TV distributors. The Pemra has to date not been able to introduce a Pay TV regime in Pakistan, which binds TV distributors to pay pre-determined fees to broadcasters for the coverage of their channels. The entry in the TV distribution market can open an expansion path for broadcasters which Pemra has blocked.
The Pemra’s major argument to exclude broadcasters is that their participation will lead to undue concentration of media . Pemra chairman in his TV interviews has said that DTH accounts for nearly 25 percent of market share in TV distribution in India and a number of other countries. With three DTH licences on offer, no one DTH licensee will be in a position to dominate the TV distribution market in Pakistan. Already Pemra has a very strict limit of only four TV channels per media group which leaves very little room for expansion and with closure of TV distribution market, the broadcasters cannot benefit from economic scale in technology or manpower.
Whereas Pemra has excluded broadcasters from DTH licencing, foreign entities, which may be broadcasters abroad, are allowed to own upto 49 percent shareholding. Foreign entities are allowed management control as a special exemption to section 25 of Pemra Ordinance, which prohibits it. Majority of developed and developing countries are conscious of exposing their media industry to foreign investors. Ranging from Philippines, which does not allow any foreign investment in its media industry, to Indonesia, Vietnam, USA , Russia, others, there are varying degrees of limits on foreign investment in local media. Majority of countries do not allow management control at all to foreign investors. In India, the management of DTH companies has to be of Indian origin.
Last year , Russian parliament reduced the ownership limit of foreign investors in local media from 50 percent to 20 percent. It’s an industry norm that first the local media industry is allowed to grow to a strong level in broadcast and distribution sector and then foreign investors are giving concessions. However Pemra has preferred overseas investors to local broadcasters in a clear case of discrimination against the constitutional provisions.
The sole motive of the Pemra bidding seems to get the highest bid price which is not the focus of global media regulators. In India, the DTH licence fee is only Rs100 million and a lot of countries award these licences at fixed and low fees. Their major focus is roll out in shortest possible time and at most affordable levels so information, entertainment and education related content reaches masses in largest possible numbers.
Typically media regulators fix benchmarks to issue licences to most suitable entities and experience in broadcast industry is a major consideration. However majority of the companies that participated in bidding are from non-media sectors like oil and gas, construction, finance and other sectors. In India, all DTH licences have been awarded on suitability basis at a fixed price and all licensees are from media and communication industry.
Another argument forwarded by Pemra is that broadcasters will mistreat competitor channels in their distribution networks. These concerns are long settled in global TV distribution industry and broadcasters and distributors have well established mechanisms to conduct business. In case of any dispute there are dispute resolution mechanism and tribunals setup by regulators.
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