13.8.10

FM auctions phase III

The government has offered broadcasters the option of online bidding in the third phase of FM radio station auctions, in which at least 700 frequencies will go under the hammer. It has also proposed to issue 15-year licences in this phase, instead of the 10-year licences that were issued earlier, and said it may allow existing licensees to shift to 15-year licences for a fee. Information and broadcasting minister Ambika Soni made these proposals at a meeting on Monday with representatives of the FM radio industry, said three people who attended the meet- ing. They requested not to be named as the meeting was held behind closed doors. Only some of the frequencies to be auctioned this time will be available for metros; the rest will be for small towns. The proposed e-bidding could be on the lines of the auction for third-generation mobile telephony spectrum this year, when the government earned several times more than expected.

Online auctions are open and transparent. Instead of filing secret one-time bids, radio station operators can monitor rival bids and continue to re-bid until just one operator is left. The operators are divided on the issue. Those who want to bid for metro frequencies are open to the e-auction, but others say it may escalate entry fee.

There is more support for the proposal to issue 15-year licences. The industry has, in fact, been trying to get the 10-year licences issued in 2006 extended to 15 years, claiming the recession and the high cost of operations have put paid to their hopes of making money in a decade.

Phase III guidelines also include a proposal to raise the foreign investment cap in private radio from 20% to 26%, as recommended by the Telecom Regulatory Authority of India.

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