TRAI's call for curbs on media ownership and control and full disclosure of facts lie ignored since 2008
In August 2014, the Telecom Regulatory Authority of India (TRAI) gave wide-ranging suggestions to transform the country’s media landscape. The aim was to impose restrictions on media ownership, and prevent dominance by a few media houses. It was the third time—first in 2008, then in 2012—that the regulator made the effort. For over a decade, four regimes refused to accept or reject them.
The reasons were obvious. Some of the views went against politicians and parties which owned media in several states. Some went against large media companies owned by big business houses, as also media houses that had ventured into non-media areas. Media, thus, was against TRAI. In addition, as media itself became fragmented and polarised, there were not enough voices to push through the decisions.
However, TRAI’s conclusions highlighted negative trends in media, especially those related to ownership. Both political and corporate ownership was up, and needed to be curbed. There was a lack of mandatory disclosures. Cross-media ownership had expanded. There were no laws to prevent horizontal integration—across genres like print, TV, cable, digital, etc.
Experts agree with TRAI on political ownership. “Recent research shows examples of major media groups’ connections with politicians and political groups,” says Marius Dragomir, director, Center for Media, Data and Society, Hungary-based Central European University.
Reiterating the points it made in 2008 and 2012, TRAI stated that political bodies, religious bodies, state agencies, state-funded entities, even government joint ventures and affiliates, should be “barred from entry into broadcasting and TV channels distribution sectors”. If any such entity has an existing permission, “an appropriate exit route has to be provided” to it. Even “surrogates” of the above-mentioned entities need to be banned, it recommended.
There are problems with such generalisations. Firstly, since every party, or politicians from them, own media, no regime will accept this bar. It may impact the constitutional right under freedom of speech and choice. If you don’t wish to curtail choices, you cannot do so with restrictions on speech.
The regulator felt that there was an “inherent conflict of interest” vis-a-vis corporatisation of media—in cases of ownership by large businesses, it is “driven by vested interests”. TRAI noted, “Media is used for corporate propaganda in order to alter the business environment to one’s advantage.” It added, “In India, the problem of corporate ownership is further aggravated by the lack of publicly available ownership records of media entities.”
More importantly, many traditional media houses were being run for profits, and not to disseminate “accurate and unbiased news and information to the public”. For example, a senior executive of the Times of India Group stated in a 2012 New Yorker article that the group is not in the news business, but the advertising business: “We are a derived business. When the advertiser becomes successful, we are successful. The advertiser wants us to facilitate consumption.”
According to Dragomir, an ongoing study that may be published in March 2020 shows that in terms of flow of funds and incomes generated in Indian media, “a dozen powerful companies and/or wealthy families dominate”. He adds that this is “astonishing, given the size and (supposed) diversity in India, which should make it difficult for a company to expand its control at such a level”. And let’s not forget the entry of unsavoury entities like realtor, contractors, chit funds and plantation firms.
Experts feel this may be due to a mix of local, cultural and business factors. For example, Dwayne Winseck, professor of journalism, Carleton University, Canada, explains that the Indian situation is unique compared to western nations, but nearer to the standards in emerging economies. In the latter, “many communication and media players are heavily integrated into dominant business, political, and religious groups”.
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TRAI said the government needs to “seriously” consider “ownership restrictions on corporate entering media”. These could be in the form of caps on equity holding, extent of loans extended and other provisions related to control. This is important because the regulator made a distinction between mere ownership—a subset of the larger universe of control. Indeed, as TRAI fears, control could be exercised indirectly on media firms by outsiders. One was through loans given by large businesses to channels and newspapers. These loans could be converted into equity if not repaid within a period, thus having the potential to effectively change ownership. In most media acquisitions in the past two decades, this was the standard mode.
Another mode was through outside board members. One trend TRAI noted was that the “board of directors of a number of media companies now include representatives of big corporate entities that are advertisers”. This allows the latter to influence media decisions.
On ownership, TRAI maintained that equity caps should consider both direct and indirect holdings. For, in some cases, A may hold 50 per cent in media company B. This is straightforward. But A can hold 100 per cent in C, which owns 50 per cent in B. The overall holding of A (50 per cent of 100 per cent) remains the same. If A owns 100 per cent in C, which owns 80 per cent in D, which owns 60 per cent in B, A’s overall holding in B (80 pc of 60 pc) is 48 per cent.
Such restrictions on equity, loans, board representations and the nature of secret contracts and deals may not work in practice. For these can change, and will change, regularly, making it tough to monitor. A more useful tool mentioned by TRAI was mandatory disclosures by those linked to media organisations. An increase or decrease in loans to a media firm should be updated immediately.
TRAI looked at cross-media, and ways to curb the dominance of a few players. It said that the fact that India had tens of thousands of newspapers, over 350 news channels, and hundreds of news websites in different languages didn’t imply diversity. What mattered was the presence of outlets not in the context of a national market, but in the relevant geographic one. A relevant market is one where the content available through different outlets is substitutable. In India, this whittles down to a particular language or state.
TRAI felt that if the market was thus defined, there were clear signs of dominance over news by a few media organisations.
In the 2014 report, TRAI gave the formula to measure dominance through the global Herfindahl Hirschman Index (HHI). An HHI of more than 1,800 each in print, TV, and digital, was accepted as a market that was dominated by a few powerful players. In such a scenario, any outlet that contributed more than 1,000 HHI in one market, say news channels, could not contribute more than 1,000 HHI in any other, say print. If it did so, it “will have to dilute its control in one of the two segments”. Rough calculations indicate that this is indeed the case in several southern, western, and eastern states.
Clearly, some of TRAI’s 2014 recommendations may need a relook, and a few others need to be fine-tuned. Some, like the calculation to measure dominance, can be implemented. But media is ripe for full and mandatory disclosures.