New Delhi, Aug. 4: The information and broadcasting ministry favours turning down STAR News’ application to seek a long-term uplinking licence. A government decision to reject the application can force STAR to restructure its 24-hour news-channel business.
STAR News’ temporary licence to uplink expires on Thursday, but the ministry has so far given it weekly or fortnightly extensions. It is unlikely that a recommendation from the ministry will lead to an immediate suspension of the permit to uplink before an inter-ministerial group decides on the matter.
Asked if STAR News’ uplinking licence will be suspended if its application is rejected, an I&B source said: “STAR will have to decide on its course of action based on reasons given for making a recommendation.”
STAR’s possible choices are to challenge the government in court, reorganise the business by divesting equity in the holding company to Indians or choose to uplink from outside the country (at the cost of delivering news ‘live’).
Ministry sources said STAR’s responses to its questions on the financial, managerial and editorial control of Media Content and Communication Services (MCCS), its shell company, have not been in line with the objectives of government policy.
Apart from the web of companies around MCCS that STAR News has spun to run its business, STAR’s last set of replies to the Centre has convinced the ministry that editorial management and control are not the responsibility of the firm that is seeking the uplinking licence. STAR had said that it — and not MCCS — holds the power to recruit, transfer and post key editorial staff and decide on content.
The guidelines on foreign direct investment in television news that are currently being revised cap the FDI at 26 per cent and lay down that editorial management will vest in Indian hands. STAR has a 26 per cent stake in MCCS, which has proposed to run the 24-hour news channel by outsourcing business to companies such as Rent Works Limited and Touch Telecontent.
The ministry’s concern touches upon issues such as editorial control, nature of the new companies “which are either new or foreign-owned” and the real value of the firm. Drawing a parallel with Prannoy Roy’s New Delhi Television, the sources said NDTV’s business was more transparent because it clearly owned a lot of infrastructure and decided on editorial management.
The ministry’s recommendation to an inter-ministerial group and, subsequently, to a Group of Ministers from law, justice and company affairs, finance and home (apart from I&B) ministries would be a “factsheet” based on its study of STAR’s applications and the clarifications given by the company.
Last fortnight, broadcasters who have got together and formed the Indian Media Group (IMG) had urged the Centre to ensure that, among other things, 51 per cent of the equity of TV news companies were held by an Indian individual or family or group of Indian individuals.
Though MCCS technically has 26 per cent foreign direct equity, they point out that STAR Television and STAR News Broadcasting, which are licensing the “STAR News” brand, are foreign-owned.
IMG representatives are expected to meet deputy Prime Minister L.K. Advani and I&B minister Ravi Shankar Prasad tomorrow. They are understood to have sought a meeting with the Prime Minister.