New Delhi Trains Its Sights On Satellite Tv

Foreign owners may be forced to give up control

When satellite television came to India six years ago, Indian authorities hardly knew what hit them. While the government clung to its monopoly over terrestrial broadcasting, thousands of entrepreneurs set up their own dishes, slung cable wire over balconies, trees, and telephone poles, and distributed foreign channels beamed down from above. Today, up to 17 million Indian households are wired to pick up signals from Rupert Murdoch's Star TV, Turner Broadcasting's CNN and TNT/Cartoon Network, the Discovery Channel, ESPN, Viacom's MTV, and a host of home-grown private stations.

However, on June 16 in New Delhi, a special Parliamentary committee began deliberating a broadcast bill that could reverse many of the gains of these foreign broadcasters in India. The bill would reimpose state control over what Indians can watch and who can provide it. The measure calls for media companies to bid for licenses to beam into India. Perhaps most alarming of all, the proposed bill bars satellite channels that have more than 49% foreign equity or foreign managerial control from doing business in India.

REACTIONARY MOVE. Thus, under the proposed legislation, Star TV or TNT, which are, of course, 100% owned by non-Indians, could not acquire the needed license. Neither could any joint ventures controlled by foreigners. To obtain the license, these companies would have to become minority partners in local subsidiaries.

This reactionary move has the global media companies up in arms. Says Bhaskar Pant, president of Turner International India: "All of the channels have sales and marketing arms in India. To say you'll have to water down your equity doesn't sit too well with any of us." The big foreign corporations may pull out, adds Kiran Karnik, managing director of Discovery Communications India. "The better brands will be very, very reluctant to give away control," he says.

Why is the government turning on foreign broadcasters now? Most analysts say the proposed law is aimed at Rupert Murdoch, who is embroiled in a feud with his joint-venture partner, Subhash Chandra, over control of Zee TV, one of India's most popular and profitable local channels. Industry observers say Chandra used his political clout to scuttle Murdoch's planned launch of a direct-to-home satellite service, and has influenced the proposed legislation as well. "Murdoch discounted Subhash Chandra's ability to wage a guerrilla war against him in the policy environment," says media consultant Iqbal Malhotra, a former Murdoch adviser. Chandra's ally is C.M. Ibrahim, an influential member of the coalition government's cabinet.

Zee officials deny deliberate sabotage. But a rollback of foreign control would clearly strengthen Chandra's hand. And other Indian media aspirants also hope to use the time Murdoch is losing to get their own satellite broadcast plans off the ground. "We are happy he has been delayed," says Lalit Modi, president of Modi Entertainment, which has been working for three years to get its own service up and running. "It gives us a chance to catch up."

LOBBYING PUSH. Murdoch is fighting back. Under the auspices of the American Business Council, Star TV and other foreign broadcasters are lobbying legislators. The outgoing chairman of the U.S. Federal Communications Commission, Reed E. Hundt, is also expected to raise the issue during an upcoming visit. Critics of the proposed bill argue that Indian officials should set programming and content rules rather than focus on who owns the company. They say foreigners are fueling massive growth in India's domestic television production by buying locally made serials, game shows, and other programs, but warn that the bill would discourage further investment.

Indian lawmakers will need lots of convincing. Control of the airwaves is a hot-button issue for many Indians, who are already nervous about the rapid pace of change in their society and the lure of the West. Leftists think that even a 49% foreign equity cap is too high and are demanding it be lowered to 25%. "It's no longer a rationality issue, it's an emotional issue," says Discovery's Karnik. Unless reason prevails, however, India's burgeoning television industry could find itself coming unplugged.