Only 100 per cent of Indian companies will be allowed to broadcast in the 3.7 Mhz spectrum in the band of 104.4 to 108 MHz. "They will be 100 per cent Indian companies with no foreign equity involved but obtaining of technology would remain permissible under the prevailing policies," the note says.

The auction process is going to be a transparent, simple and continuous one. "In the licensing arrangement it is proposed that wherever the number of applicants exceeds the number of available channels, time slots allocation would be open auction in which all applicants shall pay a reserve price fixed in advance and the reserve price shall continue to be enhanced by 10 per cent in the auction till such time as the number of applicants in the auction equals the number of channels available,"the cabinet note says.

What is more, applicants wanting to continue in an auction shall be required to pay the enhanced quantum of the reserve price in the form of demand draft.

Importantly, FM channels will not be allowed to use the brandname or the product name of the broadcaster. Creation of brand identity - either through a name or a number or a combination thereof -- will, however, not be denied. In addition to an eligibility criteria, a disqualification criteria -- any company with foreign holding, any company not registered in India, any company controlled by convicted offenders, religious or political bodies or advertising agencies -- has been laid down in the cabinet note.

Various centres in which FM broadcasting will be allowed has been catergorised into `A+',`A', `B', `C' and `D' categories. The proposed reserve licence fee for `A+' category is Rs 1.25 crore which will go up by a certain percentage point very year. Similarly the price for category `A' is Rs one crore, `B' is Rs 0.75 crore,`C' is Rs 0.50 crore and `D' is Rs 0.20 crore (please see chart), which goes up every year for the next 10 years.

Importantly, the licence fee increases at the rate of 15 per cent over the pervious year's fees.

The metros or category `A' centres will have as many as 12 FM centres, followed by other categories which will have a smaller number of channels. A minimum of two channels is proposed per centre. The services will be opened up for private broadcasting in the four metros to begin with, and gradually to other centres.

The channels will be given on lease to the private broadcasters for a period of 10 years. Importantly, they must have their own technical and studio facilities. These licences are non-transferable and cannot be leased out.

Networking amongst channels will only be allowed by the government for events of national or regional significance.

The note also says that "licence fee shall be paid every year in advance within seven days of the beginning of the concerned year, failing whichthe licence will be cancelled". The government may direct the information and boadcasting ministry take over the cancelled licence or issue the licence to another Indian company under the open auction mechanism.

Importantly, the cabinet note says that each licensee will be allocated only one frequency, thereby allowing a single entity to go for only one channel per centre.

On value added services, the note has the following to say: "value added services or auxiliary channels or sub-carriers such as Radio Data System or Radio Data Channel would be permitted for applications of information dissemination, excepting news and news based information".

A caveat in the note says that licencees will have to sign on an agreement which calls for abiding by the rulings of an independent regulatory body, as and when it is set up.

The channels will be allowed to broadcast in the specific areas of entertainment, music, education and information.

Besides, commercial broadcasters, the channels will be made availableto NGOs, education institutions. Community radios will be allowed for education and public service broadcasting though no set criteria for this was spelled out in the cabinet note.

The need for privatisation of FM broadcasting has been necessitated by the fact that the earlier privatisation drive had failed to take off. Litigation led to discontinuation of private channels over the last one year.

The note also specifies the number of channels per centre. Delhi will have 12, Calcutta 12, Mumbai 11, Chennai 12, Lucknow 4, Kanpur 2, Jaipur 2, Jullunder 2, Ludhiana 2, Indore 5, Srinagar 3, Varanasi 2, Agra 2, Bhopal 3, Allahabad 2, Jabalpur 2, Chandigarh 2, Hyderabad 2, Bangalore 6, Cochin 2, Coimbatore 2, Madurai 2, Visakhapatnam 8, Tiruchy 2, Trivandrum 2, Tirunelveli 2, Mysore 2, Ahmedabad 4, Pune 7, Panaji 3, Nagpur 2, Raipur 2, Rajkot 2, Jamnagar 2, Patna 3, Guwahati 3, Shillong 2, Cuttack 2, Bhubaneshwar 2, Aurangabad 2.