Pvt FM players to Trai: Keep not-for-profit firms out of community radio space | The Financial Express

Pvt FM players to Trai: Keep not-for-profit firms out of community radio space

“If I am running a larger organisation, I will be able to create an NGO and take a community radio licence … then why is there a need for auction of spectrum by the government,” he said.

Pvt FM players to Trai: Keep not-for-profit firms out of community radio space
Section 8 of the Companies Act includes companies formed to promote commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object. Such companies also intend to apply their profits or other income to promote their objectives.

Private radio players such as Radio Mirchi, Radio City and Big FM have urged the Telecom Regulatory Authority of India (Trai) not to recommend allowing not-for-profit companies to run community radios.

The companies, through industry body Association of Radio Operators for India, have said granting permission to not-for-profit companies falling under Section 8 of Companies Act, 2013, would come at a financial loss to the exchequer. They said such companies would become eligible for benefits like reduced license fee, access to spectrum without auction, lower spectrum usage charges, among others, thereby reducing revenue for the government and giving strong competition to small community radios.

Community radio stations broadcast content that is of specific interest to people in a particular geography. The programmes may be related to education, entertainment and other interests of users in that community. As per current rules, only civil society and voluntary organisations, educational institutes, state agriculture universities, Krishi Vigyan Kendras, registered societies and autonomous bodies, and public charitable trusts are allowed to operate community radio stations.

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“Section 8 companies are set up by large organisations, and through community radio stations they will get a back door entry to commercial radio broadcasts at negligible costs,” said Uday Chawla, secretary general of Association of Radio Operators for India, during an open-house discussion conducted by Trai on the subject.

“If I am running a larger organisation, I will be able to create an NGO and take a community radio licence … then why is there a need for auction of spectrum by the government,” he said.

Section 8 of the Companies Act includes companies formed to promote commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object. Such companies also intend to apply their profits or other income to promote their objectives.

In July, Trai had sought comments from stakeholders on whether not-for-profit companies under Section 8 should be allowed to set up community radio stations. The consultation paper from the regulator followed a suggestion from the ministry of information and broadcasting to this effect.

“Basic purpose for community radios is to cater to people in a particular geography. However, Section 8 companies are thematic and incorporated for special purposes, therefore, they may not be able to serve specific interest of a community and should not be allowed,” said Prashant Ramdas, legal head at Entertainment Network (India), operator of Mirchi FM.

While the government has kept certain levies for community radios at a bare minimum, the industry has been struggling for a sustainable business model owing to lack of recognition compared to other media platforms, fewer advertisements, and limited access.

“Community radio as an industry is struggling. We want the government to provide us financial support,” said BS Panwar, president, Community Radio Association of India. He said community radios proved their worth through their useful services during the pandemic.

The association, along with community radio station operators, has urged the Centre to provide them annual grants and ask state governments to use community radios as a preferred medium to advertise their policies.

According to Trai, there are 356 community radio stations operational in the country.

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First published on: 12-11-2022 at 02:45 IST