The present detailed note is in response to certain concerted efforts being made by a foreign media conglomerate by lobbying hard with the present Indian Government to Create a “Media Monopoly”

STAR INDIA, TREXIT, AND THE CURIOUS CASE OF NATIONAL BROADCASTING POLICY

The present detailed note is in response to certain concerted efforts being made by a foreign media conglomerate by lobbying hard with the Indian Government to remove/relax the extant FDI restrictions on electronic news and current affairs segment and Cross Media holding restrictions/ regulations. This is being done so as to acquire an “end-to-end” control over entire media segment i.e. from creation of content (broadcasting – both news and non-news) & distribution (mainly DTH and Cable TV) and create monopoly. The effort has been to somehow completely own an existing DTH platform in which it holds at present around 30% stake (which in itself is a violation of existing DTH guidelines as a broadcaster cannot hold more than 20% in a DTH platform). Similar efforts are being made to acquire Digital Cable Television network so as to have complete control over content distribution platforms.

This media house/entity already has cricket telecast rights of all the matches conducted by BCCI, ICC as well as that of IPL which is the most popular sport in India. This has wide ramifications not only from competition point of view but also has grave national security implications. It is pertinent to note that apart from potential distortion of the market and thereby eliminating the competition, it would also have an adverse impact on the consumers’ and public interest. If these relaxations are done in media sector then a situation will come, when in India only two or three big players ’viz., Star, Zee, Times Group and Sun TV group will remain in the media sector and which will be totally against interest of the public at large and the nation. In fact this will lead to the situation where in these media houses will dictate the Government in all the issues.

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Star India, Trexit, and the curious case of National Broadcasting Policy

Economic Times   By  Mr. Gaurav Laghate 

Synopsis

It all started with TRAI’s new tariff order back in 2017. Star challenged the regulator’s jurisdiction in courts, sparking a long-drawn legal battle. The broadcaster then decided to take a different route. A deep-dive investigation by The Economic Times reveals how Star & Disney India officials waged a war to oust TRAI from the broadcast sector.

In Martin Scorsese’s 2006 crime thriller The Departed, Jack Nicholson’s character Frank Costello famously said, “I don’t want to be a product of my environment. I want my environment to be a product of me”.

Much like Costello and many powerful businesses around the globe, India’s largest broadcasting company — Star & Disney India— reportedly tried to influence the Ministry of Information And Broadcasting (MIB) to suit its strategies.

An investigation by The Economic Times reveals that the broadcaster went to great lengths to influence the government of India’s upcoming National Broadcasting Policy (NBP) — and almost succeeded.

Star India’s goal was to oust the Telecom Regulatory Authority of India (TRAI) from the TV-broadcast sector. Towards this end, it filed cases in courts and indulged in intense lobbying within the government.

But what prompted the broadcaster to take on TRAI?

Project Trexit begins

It all started with TRAI notifying the new tariff order (NTO) in 2017. The order sparked a long-drawn legal battle, with Star challenging the regulator’s jurisdiction in the Madras High Court and later in the Supreme Court. Following unfavorable decisions, Star decided to take a methodical and circuitous approach to undermine and ultimately push the regulator out of the sector.

With the NTO, TRAI framed the rules for pricing of the pay channels and formation of bouquets. According to various sources, including present and former employees of the company, Star & Disney India’s leadership had always believed that TRAI should not be governing the broadcast sector as its presence prevents large companies such as itself from using their bargaining power.

Many veterans with direct knowledge of the matter confirmed to The Economic Times that since 2017, Star India has embarked on the ambitious aim to take away the jurisdiction of TRAI to regulate the TV-broadcasting sector.

Internally, the project was named Trexit (TRAI’s exit) — on the lines of Brexit.

In a three-month-long investigation, The Economic Times has received inputs from some Star employees and consultants regarding Trexit. Various independent sources with first-hand knowledge of regulatory and public-policy affairs have affirmed that “it was a three-prong strategy”.

The first part was legal recourse; the second was to get ‘broadcast’ acknowledged as ‘works’ under the Copyright Act, 1957, by suggesting an amendment to the Act; and the third was to influence the upcoming NBP and the amended Cable TV Act in Star’s favour,” one of the sources say.

The Economic Times has further received parallel leads from unrelated sources that corroborate Star’s pursuit of a larger mission.

Going all out against the regulator

The first litigation was filed in the Madras High Court in 2017, challenging TRAI’s jurisdiction and administering the TV-broadcast sector on grounds of it violating the Copyright Act. This was rejected by both the Madras High Court and the Supreme Court.

Separately, the broadcaster was also lobbying at the same time to amend the Copyright Act to bring TV broadcasting within its ambit in totality.

As reported by The Economic Times on December 5, 2020, Star was seeking recognition of ‘broadcast’ as a copyrightable work akin to a ‘cinematograph film’ or ‘sound recording’, and broadcasting organisations as authors of the work.

Simultaneously, the broadcaster also sought a provision or section to state that the Copyright Act shall have an overriding effect over all laws in force for the time being in India, including the TRAI Act. This would have effectively ended TRAI’s powers over the sector.

To this end, Star tried to use the Indian Broadcasting Foundation (IBF), the apex body of the broadcasters. However, there were many members, who were visibly opposed to Star’s constant push to achieve its vested interests under IBF’s name.

At the same time, Star India was preparing for a large regulatory and public-policy offensive to modify, amend, and recreate the laws and policies governing the broadcast sector in such a way that TRAI effectively loses its powers.

In 2018, it began amplifying its voice to push the government to come out with a National Media Policy or at least the NBP. Star’s idea was to get the regulatory powers of TRAI harmonised with existing Intellectual Property (IP) law under the Copyright Act. “The idea was to get firm policy commitments from the MIB to create a roadmap in which TRAI would effectively lose its role in running the broadcast sector,” the person quoted above says. “Using its clout in major industry associations, Star began pushing for roundtables with senior officials of MIB in which calls for a policy were made. These roundtables mainly happened in early 2019,” he added.

How Trexit unfolded

At one such roundtable organised by the Federation of Indian Chambers of Commerce & Industry (Ficci) in March 2019, MIB secretary Amit Khare agreed to look into the demand for NBP and prepare a draft.

Enter Koan Advisory and Esya Centre, a lobby firm and a think tank, both co-managed by Vivan Sharan, son of former Doordarshan director general and 1985 batch IAS officer Tripurari Sharan.

Pertinently, Koan Advisory has been Star India’s preferred public policy-affairs partner since 2016. Tripurari Sharan, incidentally, was a close friend of a top Star functionary.

“The deep relationship between Star India and Vivan Sharan’s Koan Advisory existed solely because of the close personal relations between some senior management executives. Over time, this relationship became so strong that he (Vivan) was fully entrenched in the regulatory affairs and public-policy functions of the company to the extent that everything was supposed to pass through him,” another executive of Star tells The Economic Times.

According to a few sources, the company even employed one of Sharan’s close associates as its legal counsel in July 2019 to lead its public-policy efforts, which led to the acrimonious exit of a few other executives.

“I don’t know how, but Sharan was not just allowed inside the ministry, but was also preparing the draft of the NBP. Even after the additional secretary’s transfer, Sharan was involved and the draft of NBP was given to the new additional secretary (Neerja Sekhar), who publicly announced that the draft policy is ready.”

— A Ministry of Information and Broadcasting official

Vivan Sharan’s role in NBP

After the MIB agreed to look into the NBP, it appointed Broadcast Engineering Consultants India Limited (BECIL), a government of India enterprise, as the consulting agency for this project.

And as soon as BECIL began asking the industry stakeholders to make their submissions on the NBP, Star India sensed an opportunity and placed its preferred consultant, Vivan Sharan, within BECIL as a consultant. BECIL did not reply to a detailed questionnaire on the matter from The Economic Times.

The senior executive quoted above says that the appointment of Sharan in BECIL could happen only due to the influence of another Star India senior vice-president.

While the broadcaster renegotiated the fee of all its contracts last year by 30% due to the pandemic, according to sources, the pay-out to Koan still remained almost 4x the 2019 money.

The other advantage of having Sharan on board was the fact that he also ran Esya Centre, which functions as a non-profit arm and could advance agendas given its status as a think tank, the executive adds.

ET is given to understand that since 2019, Star & Disney India has made a substantial endowment to Esya Centre, which advocates broadcast and copyrights on the same lines as Star. “Sharan’s pay-out almost has the status of folklore amongst other consultancies of similar size,” another person with knowledge of the matter says.

In this capacity at BECIL, Sharan began receiving written submissions made by Star’s rival broadcasting companies as well as industry associations.

After BECIL submitted its draft to the ministry in October 2019, Star India again used its influence to get Sharan to handle the same process for MIB as well.

According to sources in the MIB, in this role, Sharan was sitting inside the ministry with senior officials and drafting the next version of the broadcast policy. All this while, Sharan was also simultaneously working in close conjunction with Star employees.

Internally, a core team was formed, which had exclusive access to materials for devising a favourable policy. It was led by a senior professional and supported by a Star legal executive close to Sharan. They were supported by two other employees, one of whom was an economist.

While at MIB, Sharan’s mandate by Star was even wider. He was to achieve Trexit through two means — notification of NBP and amendment to Cable Television Network (Regulation) Act, 1995. The MIB asked for industry views on the latter in February-March 2020.

A senior official at MIB confirmed that Sharan was allowed in the MIB by the former additional secretary.

“I don’t know how, but Sharan was not just allowed inside the ministry, but was also preparing the draft of the NBP. Even after the additional secretary’s transfer, Sharan was involved and the draft of NBP was given to the new additional secretary (Neerja Sekhar), who publicly announced that the draft policy is ready,” the MIB official says.

Under the MIB scanner

Speaking at the CII BIG Picture Summit on December 17, 2020, Sekhar said that the government was in the process of coming up with an all-encompassing draft NBP after consultations with various stakeholders. The Economic Times has learnt that there were no public consultations and only a few select stakeholders were asked to submit responses by the ministry.

On January 5, 2020, The Economic Times reported the contents of the draft policy. Its key highlights were: recognition to self-regulatory bodies, review mechanisms for audience measurement, finding the right balance between various regulations governing the sector, and the review of all the major rules and acts, including the existing Cable Television Network (Regulation) Act, 1995.

The draft stated that the new law would harmonise the regulatory powers of TRAI with existing IP laws, including the Copyright Act— something that Star India has sought for long.

The Economic Times has accessed multiple drafts of the NBP submitted to BECIL and MIB.

However, after receiving multiple questions from The Economic Times, the senior officials of the MIB decided to review the entire process. “It was brought to the notice of the joint secretary that an outsider [Sharan] had worked on a government document. The joint secretary literally junked the document and told all of us that the officials of the ministry should have written the policy. He objected to many points in the draft, which will now be reworked,” the MIB official says.

Subsequently, in a reply to Parliament, the MIB denied that a draft of the policy was ready. But The Economic Times has obtained all the drafts and versions of the policy, including the one which was prepared after our report on January 5.

MIB and TRAI did not reply to queries from The Economic Times for this story.

When asked whether Star & Disney India has hired or worked with Koan Advisory or Esya Centre as an agency to influence the government of India, the company said it works with a lot of consultants.

“No. We do engage with a range of experts and consultants on different subjects. Koan is one of the many we consult with, on areas relating to the digital and information-technology markets. The Esya Center is a think tank that does research on various subjects, all of which are available in the public domain,” a Star & Disney India spokesperson says.

The company also said it was not aware that Koan Advisory was hired as an agency by BECIL and the MIB to receive comments from the industry and prepare a draft NBP.

Replying to queries from The Economic Times, Sharan says he had a fixed contract period with BECIL (not ongoing) as an individual, who has “extensive expertise” in the media industry.

“During this period, I engaged on several issues pertaining to broadcasting. I have shared independent positions and perspectives on media, technology etc., widely in the public sphere, through articles and works… I have also published a cross-sectoral book on public policy in December 2019, which includes my take on media policy in the country,” he says.

Sharan adds that in the case of the broadcast policy, he was not made aware of any official draft policy adopted by the MIB during his consulting tenure.

“You may also know that the policy process has already involved broadcasters, industry associations, think tanks etc., in the spirit of consultation and transparency wherein various inputs have been solicited and at times exchanged between stakeholders, a process facilitated by the government,” he says.

On the financial dealings with Star & Disney India, Sharan says any financial arrangements that the Esya Centre has are “confidential and privileged”.

“You may see our reports in the public sphere, wherein we have credited relevant private-sector sponsors for supporting specific strands of research. As is the case for most not-for-profit/research bodies, we look to corporates to support our costs. This has no bearing on any of the work done by me in my individual capacity,” Sharan says.

Replying to a subsequent query, he says, “…Your sources are compromised and have led you astray… Perhaps a correction or apology from you was in order at this stage. Instead, each of your mails is peppered with insinuations, accusations, and factual inaccuracies”.

The bottom line

Following the queries sent by The Economic Times to Disney’s headquarters in the US, it is learnt that the general counsel of the Walt Disney Company, as well as senior public-policy executives, have started asking a lot of questions and are going through all the contracts of Star & Disney India with a fine toothcomb.

Meanwhile, Star & Disney India’s attempts to use the courts to fulfil Project Trexit have continued. In the NTO matter, it has pushed the Bombay High Court to read down TRAI’s regulatory powers on the grounds of freedom of expression.

The court has reserved the judgment in the matter.

As published in Economic Times  

Mr. Vikki Choudhry’s Detailed Note on FDI in Media

Vikki Choudhry: An Analyst, Activist, Strategist, Visionary Investor & Entrepreneur in Entertainment, Broadcast Media, Next Generation Telecommunication, Analytics, Technology and Defence Make in India.

He is a life member of the prestigious BES “Broadcast Engineering Society” and SCTE India “Society of Cable Telecommunications Engineers” India, and an industry observer. 

A hands on promoter and has been amongst the leading entrepreneurs in the Digital Cable and Broadband Fraternity with over 24 years of experience in the cable and broadband services industry. 

He has represented the difficulties and woes of the Broadcasting industry before the regulatory departments and ministries in the Government of India. Above all, his readiness to help and advice and agitate issues for the betterment of broadcasting and telecommunication industry in India has always been appreciated by all associated with it.