"Ownership is a huge concern how do you know that a TV channel operated out of Bhopal owned by a local MLA or MP is conveying the truth rather than tinted version of the truth.

This is one problem with political ownership," said Trai Chairman Rahul Khullar while releasing recommendations on 'Issues Relating to Media Ownership'.

About corporate ownership, the regulator said, it has to be seen as to how much independence is enjoyed by the editorial team in a media house owned by them.

"To what extent the editorial is actually independent and how thin is the line between the newsroom and the boardroom. Second problem with media corporate ownership is this business of advertorials, private treaties. I am sorry to say it has reached scandalous position. You cannot carry on by passing out advertisements as news," Khullar added.

Trai also recommended that in case of "advertorials", a clear disclaimer should be mandated, to be printed in bold letters, stating that the succeeding content has been paid for.

Commenting on corporates entering media, Trai said: "On grounds of the inherent conflict of interest, the Authority recommends that ownership restrictions on corporates entering the media should be seriously considered by the Government and the regulator."

Telecom Regulatory Authority of India (Trai) suggested that entities including 'political bodies, religious bodies, central and state government ministries and government funded entities be barred from entry into broadcasting and TV channel distribution sectors'.

The regulator even suggested that even surrogates of such entities "should be barred from entering into the sector".

Trai has suggested enactment of a new legislation through a executive decision for it. It has also suggested that an exit route option should be provided in case permission to any such organisations have already been granted.

In the recommendations, Trai relies heavily on media articles and TV documentaries to illustrate how political parties own channels in various states and how they and newspapers black out news that are adverse to their interests.

Trai has recommended a single independent media regulatory authority - headed by a retired Supreme Court judge and comprising predominantly of eminent non-media persons - for TV and print media to check and impose penalties for "paid news", "private treaties" and issues related to "editorial independence".

The proposed regulator would have powers to probe and impose penalties, if the media houses are found guilty for being on the wrong side.

"The media regulator would be looking at and deciding all the complaints. It would be adjudicating with admonishing an punishing powers," Khullar said.

On cross holding, he said an owner cannot hold more than 32 per cent in both electronic and print media if they are concentrated.

In order to determine concentration Trai has given three metrics - volume of consumption, reach and revenue of the media house.

"We would look at the market and see if the TV media is concentrated or the print media is concentrated and if there is concentration in both and one particular person has more than 32 percent share. Then, sorry, that guy has to dilute equity in either TV or print," he added.

Trai has recommended a rule based on Herfindahl Hirschman Index (HHI) be implemented.

"If the television as well as newspaper markets are concentrated (HHI> 1800 in each), then, an entity contributing more than 1000 to the HHI of the television market, cannot contribute more than 1000 towards HHI in the newspaper market as well, and vice-versa. If it does so, it will have to dilute its control in one of the two segments," Trai said in its recommendation.

HHI of 1,000 is almost equal to 32 percent.

It further added that all mergers and acquisitions in the sector will be permitted only to the extent that the rule based on HHI is not breached.

On the issue of paid news, Khullar said that in such instances both the parties including media firm should be held liable.

"Liability should be on the both the parties in such case," he said.

On "paid news", Trai said that both media organization and persons like an MP or MLA paying for favourable news should be held liable and not only the politician.

However, Trai has kept online media and FM radio out of the purview because of low penetration. However, Khullar said that the moment it takes prominence, "we would add it".

On the "media regulator", Trai said: "Government should not regulate the media; there should be a single regulatory authority for TV and print mediums; the regulatory body should consist of eminent persons from different walks of life, including the media. It should be manned predominantly by eminent non-media persons."

Besides, it said, strengthen arm's length relationship between Prasar Bharati and government and take measures to ensure functional independence and autonomy.

Commenting on the Trai recommendations, global consultancy firm KPMG said that cross-media integration provides media owners with opportunities to leverage content, advertiser relationships, build economies of scale and to enhance viability.

"Most mature markets do have some level of cross-media restrictions but India must be careful to frame its regulations in a way that encourages healthy growth rather than restrict scale," said KPMG Partner and Head of Media and Entertainment Jehil Thakkar.

Rapid structural changes in the media and entertainment industry have occurred over the last few years. The industry especially print is fragmented to some degree with great scope for consolidation, he added.

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