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CAN TRAI KEEP A TAB ON TV ADS?….Nikhil Kanekal
The powers of the Telecom Regulatory Authority of India (Trai) to regulate content and advertising on television channels had been unknown to most people until a regulation landed on the regulator’s website on 14 May. But can Trai really tell TV channels how much advertising they can allow on air?
First, here’s what the regulation says: channels cannot have more than 12 minutes of advertising per hour of airtime. Other measures include stipulations that there should be at least 15 minutes of programming between commercial breaks, 30 minutes in the case of movie channels and no interfering with the screen (drop-down boxes, graphics, among others) in the case of live sports broadcast; all of which sound like a TV viewer’s delight.
The regulation was notified by J.S. Sarma, Trai’s former chairman and a career bureaucrat, on his last day in office, after two months of consultation, raising some eyebrows over the alacrity with which the regulator moved. It would have been easy to predict that such a regulation would be challenged, given the commercial interests riding on it. Could Trai have prevented a potentially costly, lengthy litigation that is certain at some juncture?
At the outset, the regulation seems to be appropriate given the erratic and unruly manner of advertising that TV viewers frequently encounter although the Indian advertising industry does create some engaging commercials. A deeper examination of the regulation belies this view—it will likely upset the economic viability of programming and create gated communities of audiences since most channels will be forced to go the pay TV way.
But before looking at the market forces that will come into play, what drew attention was the fact that Trai’s decision may not be enforceable. According to the sanction granted to it by the ministry of communications and information technology in 2004, Trai’s powers are only “recommendatory” in this regard.
And this is notwithstanding the robust fortress of constitutional law carefully constructed by the Supreme Court that guards the freedom and interests of the media to express and disseminate news, views and pretty much anything else. Inherent here is the freedom to advertise, especially if this advertising is intrinsic to the economic sustenance of the media entity in question. Although the court’s rulings are in the realm of the print medium, by logical extension, they can be applied to television, radio and the Internet. In effect, they are medium-agnostic.
The programming and broadcasting industry isn’t quite sure what to make of Trai’s regulation, which at first appeared to be populist, but in the long term is detrimental to the larger television viewing audience. Channels that are restricted from taking on advertising that is proportional to their cost of production will eventually have no choice, but to take the pay TV route.
Currently, of the 670 channels operating in India, 507 are free-to-air and the rest are pay channels that require a periodic subscription fee. But even paid-for channels rely on advertising for a proportion of their revenue. There’s only one way this is going: the cost of TV viewing will increase and poorer consumers will not be able to afford more channels, if any, should the regulation take effect. Free channels will be fewer and paid-for channels will get costlier.
Prima facie, the Trai regulation appears to ride roughshod over precedent on the freedom to advertise. And this is despite broadcasters bringing to the regulator’s notice several objections to the new rules, before they were formalized. Internationally, there are norms for advertising on television and these include the volume of advertising, too. But the Indian market is quite different from foreign ones. Television viewing in advanced economies is expensive, especially if it is live sports or commercial-free movie screenings. The difference between more mature markets and India is that the norms have come into place abroad in a largely voluntary fashion and the revenues of broadcasters are not so skewed in favour of advertising.
Unsurprisingly, conversations with broadcast networks and their counsel revealed that they’re preparing for a legal battle. They’re likely to move ahead as a group, they said. For now, the discussions are on which forum they should approach—the Delhi high court or the Telecom Disputes Settlement Appellate Tribunal—depending on the line of attack the channels will choose.
The questions on the merits of the challenge are, in fact, an advanced proposition, in the opinion of some broadcasters—whether Article 19(1)(a) (freedom of speech and expression) and 19(1)(g) (right to livelihood) can be limited by a regulation of this nature? They first want to test whether Trai even has the jurisdiction and powers under the Cable Networks Act to impose such a regime.
My money is on the broadcasters prevailing. However, certainty in legal battles, even if bolstered by substantial case law, is elusive. Much rides on the judges who will hear the challenge to the regulation—whether they can be convinced that restricting advertising to just 12 minutes per hour is unreasonable, is the Rs.12,000 crore question. That’s the estimated size of television advertising at the end of 2011.
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