TRAI Report on Media Ownership: Occupation of media by 'natural' market forces

Note: The trend of occupation of media by 'natural' market forces has been unfolding for quite a while. Indeed "media regulation" is "essentially a bargain between power brokers in the media and the competing elements within the political domain" amidst "concentration of ownership".  Hasn't TRAI recommended something like a Third Press Commission “headed by a retired Supreme Court judge” to examine the structural changes in the media landscape? 


First Press Commission was set up Nehru Govt. The Second Press Commission set up by Morarji Govt and reconstituted by India Gandhi Govt. There was a demand for the 3rd Press Commission which Dr Manmohan Singh government agreed to it. It sought its Terms of Reference twice from Kuldeep Nayar but failed to set it up. The Parliamentary Standing Committee (PSC) on Information Technology in its report in 2013 has observed on cross-media ownership and its adverse impact on "democratic structure”. Besides Nayar, senior journalists like Ram Sharan Joshi and Ram Bahadur Rai have been demanding the setting up of the Third Press Commission. 


In a rigorous analysis, Sukumar Muralidharan recorded that Delhi Union of Journalists (DUJ) has commended the TRAI initiative but suggested that the magnitude of the problem of media monopolies remained to be accurately assessed. The market share of the major media entities was of course germane, but so too was the disproportionately large share they obtained of the aggregate advertising expenditure in the economy. 


The fact of The Times of India (TOI) questioning TRAI’s jurisdiction into the policy space on print media is quite predictable. Notably, TOI has questioned the role of Press Council of India too in the past.  TOI's division which manages radio broadcasting assets put on record its “fundamental” belief that the “growth of media in a democracy as vibrant and heterogeneous as India is possible only if the industry is allowed to grow to its full potential governed only by market forces and not restricted by suffocating regulations”. TOI's the internet division told TRAI, "(i)nstead of trying to harm the Media Industry...TRAI must be sensitive to efforts to protect the Media Industry against existing wrong practices like wage boards for newspaper employees, which allows government the power to decide the salaries of journalists and non-journalists." Such submissions of likes of TOI and STAR are part of profit at any cost ideology who find 'public interest' an idea of the by gone era for whom media freedom means freedom to make profit and externalize costs. 


Will the new government concede to the  demand for the Third Press Commission? Drawing on the 2009 report on media ownership by the Hyderabad-based Administrative Staff College of India (ASCI), the TRAI recommendations makes a case for it.   


Gopal Krishna

Citizens Forum for Civil Liberties (CFCL)

TRAI Report on Media Ownership

The Press’s Curious Response

The Telecom Regulatory Authority of India recently released its report on media ownership to a studied indifference from the print media which otherwise debates this issue vigorously. Why have the newspapers avoided a serious and vigorous engagement with the report's consequential recommendations?
Sukumar Muralidharan (sukumar.md@gmail.com) is a senior journalist and political commentator based in New Delhi.
Given the general tone of public discussions on the media, there could be a prize reserved for any statement that avoids the term “fourth estate”. In its report on media ownership released on 12 August, the Telecom Regulatory Authority of India (TRAI) fails to resist the cliché, resonantly pronouncing in its very first line that the “fourth estate” plays a “crucial role in a democracy”.1
TRAI’s exploration of media ownership stays true to form here, but reserves an element of surprise in the recommendations it puts forward. At issue are two among the constitutional rights: property and free speech. Property may have been demoted in the reigning constitutional orthodoxy from being a fundamental right to merely a “legal right”, but it remains an entitlement protected with greater zeal than life itself. And free speech is of course a right of very wide amplitude which has in much public discussion been reduced, unfortunately to merely a matter of the media. These are difficult knots to cut through and after placing all its thoughts on the table, TRAI leaves the task of unravelling the multiple complexities involved, to a future body, perhaps a commission “headed by a retired Supreme Court judge”.
Perception of Media
Public agencies and deliberative bodies have of late shown a proclivity to blow the whistle on the more blatant abuses creeping into the Indian media. In 2013 the Parliamentary Standing Committee (PSC) completed its inquiries into the contagion of “paid news” or “cash for coverage”, identifying the progressive marginalisation of the craft of journalism within the media industry’s calculus, as a contributory factor. This raised hopes that the journalistic community would gain some sort of redress for their multiplying woes, a hope which quickly proved misplaced since general election season was coming up and the political establishment was unwilling to risk a confrontation with those who wielded real power within the media industry.
With the TRAI report now, as with the PSC’s report in 2013, the principal actors have played true to form. The official inquiry has stepped boldly beyond the limits of political feasibility in suggesting a course of action that would cut deeply through the shield of media industry autonomy. However, the media industry itself has responded with studied indifference. A sampling of the English language print media where the policy dialogue is customarily carried on with the greatest vigour, uncovers a curious indifference, with most newspapers relegating the TRAI recommendations to an insignificant spot on an inner page, often avoiding a serious engagement with its most consequential recommendations.
By pure coincidence, within days of the TRAI report, the Congress Party completed the pretence of an internal inquest into the savage mauling received in the recent parliamentary general elections. It was never in doubt, even if the elaborate rituals of honest stocktaking were followed, that the dynastic leadership of the party would evade all blame. The only point of interest in the outcome then, was in the discovery of a new scapegoat for the Congress’s abject failure. As a Congress spokesperson said after the report was completed, “manipulation of media coverage by the BJP” and the reciprocal favours done by the media which allegedly focused only on the BJP’s leader Narendra Modi while “painting a negative image of the Congress” were the principal elements that determined the election outcome.2
The diagnosis speaks eloquently of a party that has lost all ideological moorings except to the principle of power. But the perception that the media has now acquired the capability to influence political outcomes is widely shared, as evidenced by research agendas in schools of journalism, which have chosen the Narendra Modi campaign for 2014 as a case study of effective political communication. However it is assessed by future researchers, the mere fact that the perception exists that an election outcome was influenced to an unprecedented degree by the media, is sufficient indication of how the balance of forces lie today. The media will seek to leverage the perception of its strength to obtain maximum advantage. The political establishment will gladly yield that advantage as long as it sees that its vital interests are not impaired. And with media regulation being essentially a bargain between power brokers in the media and the competing elements within the political domain, the cause is unlikely to register much progress.
Negotiating Complexities
TRAI seeks to cut through the many ambiguities that have made media regulation a distant goal. Public interest is its only ostensible guide, as too the reasonable premise that pluralism is a desirable end. Pluralism as an end is defeated by concentration of ownership, but when media entities are either protected by accounting confidentiality or enabled to conceal the controlling hand behind a complex mesh of interlocked equity holdings, concentration is a difficult parameter to judge. Market power likewise is difficult to estimate when linguistic segmentation is the rule.
Partly by borrowing concepts first mooted in a 2009 report on media ownership by the Hyderabad-based Administrative Staff College of India (ASCI), TRAI manages to negotiate these complexities with fair success. Ownership is assessed by requiring media entities to follow a regime of transparency and there is likely to be little amiss in imposing more stringent disclosure norms on these firms, on grounds of public interest. The more difficult notion of “control” could be quantified using equity ownership as the proxy variable. Where interlocking ownership occurs, the multiplicative rule is recommended, i e, for an entity that owns a certain percentage of the equity of another, which in turn owns a known share in yet another, the degree of control could be assessed by multiplying the first shareholding percentage by the second.
Equity holding of 20% or above, judged in accordance with the above procedures, would under the TRAI recommendations, connote the degree of “control” at which corrective measures would be triggered. Similarly, any entity with the power to appoint more than half the membership of the board of directors of a media enterprise, or holding 50% or more of the voting rights, would be deemed to have a controlling interest. TRAI also brings loans into the reckoning, since these have been used in recent years as a means of acquiring decisive influence over media agendas. Any entity which advances a loan that constitutes 51% or more of the total book value of a media unit’s assets, would be regarded as controlling its operations.
In its methodology for assessing market power, TRAI further develops on the suggestion made in ASCI’s 2009 study, that the Herfindahl Hirschman Index (HHI) be the relevant measure. Market share is assessed segment-wise, i e, in accordance with the language of broadcast and the state to which it is relevant, and measured using circulation for the print media and viewership for TV news channels. The English language media, both print and broadcast, would be assumed to have a pan-Indian audience. The HHI, which is the sum of the squares of the market shares of all players in percentage terms, would then give the figure for the degree of concentration in all the markets of interest. The HHI, it would be readily seen, could vary from a theoretical minimum of zero – when there are an infinite number of players in a market, each with infinitesimally small shares – to a maximum of 10,000, when there is one player with a 100% share. TRAI has suggested an HHI figure of 1,800 as a threshold figure. An HHI that exceeds 1,800 in any market would trigger certain recommended measures. Any single entity that has a contribution of 1,000 or more to the HHI in any market of interest (such as, for example, the print media in the Tamil language) would not be allowed then to have a like contribution to another (as for example, TV news in the same language). The controlling entity would then be required to dilute its control below the threshold level of 20% in one of the two markets of concern.
TRAI does not account for concentration of ownership across language markets, as with an entity controlling dominant shares in both the Tamil and English print media in a particular geographical region. In principle, the same procedure could be applied here, of a threshold level of the HHI at which action to dilute control would be triggered. Data availability is likely to be a hindrance since circulation and viewership information are only available after a certain time lag. Business units could argue that in a constantly changing market scenario, it would be unfair to subject them to legal sanctions on the basis of data pertaining to the past and having no reference to current and future realities.
Constitutional Challenge
Any effort to legislate the measures that TRAI proposes will almost certainly run into a constitutional challenge. Particularly troublesome would be the proposal to prohibit certain kinds of entities, such as political parties and religious bodies, from entering the news broadcast domain. A similar proposal was built into the broadcast regulatory bill that the United Front coalition brought in months before its short-lived tenure was ended by a withdrawal of Congress support in 1997. Legislation of this nature could conceivably have passed then, but facts have since been created on the ground that would defeat any such effort. Occupation, it is said, is one-half of the law and the number of religious bodies and political parties that operate broadcast channels through thinly disguised front organisations, is multiplying by the month.
Unsurprisingly, TRAI leaves these rather knotty legal issues to a future commission headed by an eminent jurist. But the existing jurisprudence on the issue is not favourable, with the Supreme Court having held in at least two decisive judgments that media freedom – derived in turn from the right to free speech – cannot be curbed on the grounds other than those strictly specified in the Constitution. This can be illustrated through the 1961 judgment in the Sakalnewspaper case, wherein the Court held that the Constitution did not permit any abridgment of the right to free speech of any strata of society (read, the media industry) “on the ground of conferring benefits upon the public in general or upon a section of the public”. The case then pertained to the so-called “price-page schedule” by which a restraint was sought on predatory pricing in the newspaper industry, which enabled the bigger players to leverage their superior access to advertisement revenue to drive out smaller entities through price competition. That object was not seen in the Supreme Court’s judgment, as justifying the means of restraining the bigger newspapers from a commercial strategy that would best serve their interests.
Similar principles were underlined in the context of a move to ration newsprint allocations in a situation of extreme scarcity. In the 1972 case of Bennett Colemann and Companythe Supreme Court held the effort to safeguard the interests of small newspapers by restricting newsprint consumption by the large newspapers, to be unconstitutional. The freedom of speech, it held “could not be restricted for the purpose of regulating the commercial aspects of activities of the newspapers”. In equally treating “newspapers which are not equal” in terms of their “needs and requirements”, the newsprint allocation policy fell foul of Article 14 of the Constitution, which upheld the principle of equality before the law.
Media Industry’s Arsenal
TRAI’s study comes at a time when the public mood over a runaway media is in a state of considerable aggravation. But if the debate is to advance any further, it should reckon with a consistent history of indifference by the government and obstruction by the media industry. Illustratively, the 2009 ASCI report, for all its methodological rigour and clarity, suffered a strange fate. Despite having commissioned it, the Ministry of Information and Broadcasting (MIB) effectively mothballed it and put it beyond the pale of public discussion. Close to three years later, the PSC attached to the MIB observed that “print and electronic media integration (was) taking place”, creating “behemoths (that were) acquiring a mind-share disproportionate to what is permissible in a competitive market environment”. The committee took note of the ASCI report and in response to its pointed inquiry, the MIB undertook as a “first step” to upload the entire document on its website. Public reactions would be sought and “views so received would be shared with TRAI for a relook on the entire issue”, the MIB promised.
There was of course, no explanation from the MIB of the delay in placing in the public domain a report on a matter of considerable importance. Neither is it known how long precisely the document remained on the MIB website. A fortnight after the parliamentary committee’s report was tabled in the house, the MIB secretary wrote to TRAI, to initiate a further series of consultations on the issue of media ownership. “Many players are looking for expanding their business interests in various segments of print and broadcasting sectors”, read the letter: “In this scenario, the issue of media ownership and the need for cross media restrictions assumes significance.” TRAI responded in February 2013 with yet another consultation paper. What were recommended as concrete policy options in the ASCI report became in TRAI’s paper a series of open-ended questions on which “stakeholders” – as the term of art would have it – were invited to comment.
Events that followed hewed very closely to the template set in earlier such junctures when changes to the media regulatory regime were proposed and public participation was called for. Media industry entities and their lobbies mobilised in force, deluging TRAI in verbiage that had one basic purpose: to establish the futility of any manner of regulation. Working journalists managed to put together a solitary submission through the Delhi Union of Journalists (DUJ), commending the TRAI initiative and suggesting that the magnitude of the problem of media monopolies remained to be accurately assessed. The market share of the major media entities was of course germane, but so too was the disproportionately large share they obtained of the aggregate advertising expenditure in the economy, the DUJ argued.
There were a few other interventions from independent advocacy bodies and academia. Yet all these paled in comparison with the arsenal assembled by media industry groups to dismantle the case for regulation. The business group that owns The Times of India questioned TRAI’s intrusion into the policy space on print media, where it had absolutely no jurisdiction. The division which manages radio broadcasting assets within the same group, put on record its “fundamental” belief that the “growth of media in a democracy as vibrant and heterogeneous as India is possible only if the industry is allowed to grow to its full potential governed only by market forces and not restricted by suffocating regulations”. And as if the group’s interests were not adequately represented, the internet division stepped into the fray with the stern admonition that
(i)nstead of trying to harm the Media Industry...TRAI must be sensitive to efforts to protect the Media Industry against existing wrong practices like wage boards for newspaper employees, which allows government the power to decide the salaries of journalists and non-journalists.
And then, to complete this awesome display of the group’s corporate power, the Times TV Network came up with a positive celebration of cross media holdings.
STAR India, the Rupert Murdoch-controlled distribution platform which has, since beginning India’s first 24-hour news channel, withdrawn from the arena for an exclusive focus on distribution, scoffed at the entire purpose of the consultation. In a 335-page response in which the operative portions alone ran to 120 pages, followed by nine appendices, Star argued that the “existing media ownership regime itself has outlived its relevance and is ripe for dissolution”. An especially irksome example it cited was the 20% direct shareholding restriction by a foreign player in the DTH sector, which imposed an ownership restraint on Murdoch’s Sky Television. “Media companies”, said Star, “continue to be stymied by rules passed more than a decade ago – a time that bears no resemblance to the modern one in which they operate”.
Backroom Policy
If in comparison to this frenzy of activity in response to the TRAI’s initial call for responses, the media industry has responded in low key fashion to the recent report, the reasons are fairly clear. The battle is not one to be fought in the full glare of public attention. Media policy rather is to be determined in the backrooms where trade and barter take place, where the two principals arrive at rules of engagement that would best serve a mutuality of interests. TRAI’s invocation of the doctrine of the “fourth estate” may have had a certain resonance as an aspirational statement. But it has long since ceased having any relevance in the real world.
Notes
1 Telecom Regulatory Authority of India, Recommendations on Issues Relating to Media Ownership, 12 August 2014, Delhi; available for download at the website of the authority: www.trai.gov.in
2 See the stories titled “Rahul Gandhi Not to Blame for Congress’s Lok Sabha Poll Rout: Antony” in The Times of India, 16 August, extracted on 20 August 2014 at: http://timesofindia.indiatimes.com/india/Rahul-Gandhi-not-to-blame-for-Congresss-Lok-Sabha-poll-rout-Antony/articleshow/40312124.cms; another well-known news platform, India Today, carried a story attributed to the Congress spokesperson and headlined “Media Focused Only on Modi: Azad”, on 16 August 2014; extracted on 20 August at: http://indiatoday.intoday.in/story/congress-blames-media-narendra-modi-lok-sabha-polls-2014-ghulam-nabi-azad/1/377334.html

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