Whether the private FM radio industry likes it or not, the UPA government wants this. Intentions have been spelled out clearly. Transparent mode of auctioning the 806 FM stations?in the frequency band of 88-106 mega hertz?in the third phase of FM radio expansion is now a top priority for the government. Thus, a GoM headed by Pranab Mukherjee will decide whether a clock auction model should be adopted for the FM radio rollout in India or the conventional sealed tender auction still holds good.
Huge revenues raised from the 3G-BWA clock auctions have led to demands from the cabinet secretariat and the department of revenue that the same model be followed for FM radio as well. And why not? The industry is virtually in its 10th year of operations and, therefore, its plea of running financial losses does not hold water when it?s also eyeing FM-III. Most existing radio operators have already worked out their finances for the third phase; some have also lined up investments. Had the radio industry been financially non-viable, the country would not have 249 operational private FM stations generating over Rs 800 crore in annual revenue. The logic that the clock auction model will make FM radio unviable but the sealed tender mode will not is difficult to explain.
It is understandable that the FM radio industry is resisting changes. But that should not stop the government from introducing new means, especially ones that have been successfully tested. The long legal tussle with the music industry over royalties has also been sorted out by the Copyright Board. Further, the FM-III policy is bundled with new opportunities for the radio industry. The cap on foreign investments has been raised to 26% from 20%. Ownership of multiple FM channels by a single operator in a city has been allowed.
Networking between stations across towns has also been allowed, which will drastically reduce the cost of programming for radio stations. All such measures are a first for the radio industry, which will not only help in luring foreign investors but can also make the sector financially viable ?something which was not possible with FM-I and FM-II policies.