The curious case of Arasu, APSFL: Why state govts must exit broadcasting business

New Delhi: Even as the Tamil Nadu government is fighting to retain its control over Arasu Cable TV (TACTV), the current outstanding of Rs 350 crore it owes to local cable operators and broadcasters is yet another reason why it should exit the broadcasting business, said industry veterans.

The fresh revelations surfaced as the advisory barring governments from broadcasting business issued by the Ministry of Information and Broadcasting completed two years on Monday. 

Two years on, Tamil Nadu and Andhra Pradesh governments continue to own their broadcasting businesses Arasu Cable and Andhra Pradesh State Fibernet Ltd (APSFL), respectively. 

While Arasu Cable took refuge through a writ petition in the Madras High Court against the I&B advisory, APSFL argued that their business was fulfilling social obligations and hence it may be allowed by the Centre.

Even though the draft Broadcasting bill stands withdrawn as of now, the state governments have picked up its Clause 20 which allows any entity to be in the business if it meets social obligation.

Earlier this month, BestMediaInfo.com reported that Arasu Cable lost 44% of subscribers in the last five years, from 2.8 million subscribers in the September quarter of 2019 to 1.5 million subscribers in the latest June quarter.

Broadcasting is a union subject and the Supreme Court order in the Cricket Association of Bengal (CAB) matter laid out that the state should not own spectrum. Instead, the apex court said it should be owned by the public otherwise, any political party can misuse the spectrum causing harm to the democracy.

In a reply to an RTI filed by one of the stakeholders, the attorney general of India reiterated that other than Prasar Bharati, no government should be in the business of broadcasting.

While Arasu Cable provides cable services at Rs 140, APSFL offers IPTV services clubbed with internet at Rs 350 per month. Even Punjab Chief Minister Bhagwant Mann had announced that his government would provide cable services for Rs 100, which eventually did not take off.

Industry observers told BestMediaInfo.com that the logic of providing a level playing field goes for the toss with these subsidised rates. 

“How will private players do the business in that case,” asked an industry veteran who did not want to be named.

As of today, the petition filed by Arasu Cable in the Madras High Court has not moved an inch and there is no stay on the I&B advisory.

The I&B ministry is understood to have briefed Ashwini Vaishnaw, Minister of Information and Broadcasting, last month explaining that both Arasu Cable and APCL are in violation.

Industry sources also informed BestMediaInfo.com that the I&B Ministry has recently filed its reply to the writ petition.

When asked why the ministry is not taking any action, I&B sources said, “In the federal system, advisory does not attract any penalty, etc. Because the matter is in the court, the ministry is not taking any further steps beyond negotiation.”

On the arguments of social obligations put forward by the Andhra Pradesh and Tamil Nadu governments, the ministry source clarified that APSFL also provides internet services, which could be considered a social obligation but not cable and broadband services.

“State governments are subsidising broadcasting distribution which is not their domain. It is akin to saying that the state govt will build rail network or national highways to fulfil their social obligations,” said the source.

Several broadcasters, who are chasing Arasu Cable for their outstanding bills running into crores, told BestMediaInfo.com that the model is not sustainable. 

“Broadcasters and LCOs are being denied their rights to do business as their payment is not cleared. This is another reason besides the existing laws that they must not be in the business of broadcasting. Instead, they should allow private parties to takeover,” a senior broadcast veteran told BestMediaInfo.com.

The curious case of Arasu Cable

TRAI in its regulations released in 2008 and 2014 had said no government should be allowed to be in the business of broadcasting.

When Arasu Cable was denied a licence in 2007, the Madras High Court was urged for relief until TRAI gave its final recommendation. 

Following this, a provisional MSO permission was given to Arasu Cable on April 2, 2008, subject to the outcome of the final decision on the TRAI recommendations.

After that, TRAI released its recommendation twice but the provision licence remains intact.

When DAS was implemented, Arasu Cable was given a provision registration as MSO on April 17, 2017, with the condition that in case the Central government decides to accede to the TRAI recommendations, then their registration is liable to be cancelled or revoked.

On October 21, 2022, BestMediaInfo.com raised this issue when the Tamil Nadu government-owned Kalvi TV made its way to Tata Play.

It was in this context that I&B issued an advisory after three days on October 21, 2022, asking state governments to exit the business of broadcasting by December 31, 2023.

Instead, Arasu Cable found asylum in the Madras High Court which at many points appears to be defying any logic whatsoever.

Arasu Cable in its writ petition filed on December 13, 2023, argued that the Tamil Nadu government-owned cable network is not political but the Telecom Regulatory Authority of India (TRAI) is political.

Citing the orders of the SC in the Cricket Association of Bengal (CAB), Arasu Cable stated that the Central Government has wrongly interpreted the Court order.

“Supreme Court’s observation was with regard to “state authorities like TRAI”, as they have been indirectly controlled by the Central Government and, in turn, controlled by the political parties in power by implying that TRAI is not independent,” the petition said.

Arasu accused the I&B ministry of wrongly targeting them because they neither have any monopoly nor any control over the broadcasting business. 

“It does not have any relationship with D/o Information & Public Relations and acts in an independent manner,” the petition claimed.

Arasu Cable’s petition charged that TRAI is an internal body of MIB and it always acts in favour of its master.

“Recommendations like the one issued by TRAI should have come from an unbiased “independent organisation or committee” where MIB should have no control. The recommendation of TRAI on entry of certain entities into the broadcasting sector is like a “fixed game” as MIB asked its own department to give a recommendation as it wished and the subordinate organisation fulfilled its wish,” the PSU of Tamil Nadu government argued.

Arasu Cable claimed that TRAI cannot issue such a recommendation without consultation with relevant stakeholders which include state governments.

The recommendation of TRAI is not binding on TACTV as it is against Section 4 of the CTN Act 1995, said Arasu Cable.

Section 4 states that “Registration as Cable Operators (1) any person who is desirous of operating or is operating a cable television network may apply for registration or renewal of registration as a cable operator to the registering authority. Section 2 states that person means (iii) a company as defined in Section 3 of the Companies Act 1956.

As TACTV is a company which is permitted by law, the Advisory of MIB is not legally binding on it, the company said claiming that that a legally established entity like TACTV cannot be dismantled with an ordinary departmental letter of MIB.

The curious case of APSFL

Andhra Pradesh State Fibernet Ltd (APSFL) is a Government of Andhra Pradesh Enterprise offering IPTV services.

APSFL on April 25, 2016, furnished a self-declaration to the I&B ministry for providing IPTV services in the entire state of Andhra Pradesh

A 100% government-owned entity of the AP govt (Investment and Infrastructure Dept), APSFL Provides Triple play services - ISP, IPTV, and Telephone (one STB).

The company provides triple-play services at an affordable price of Rs 350 per month.

APSFL on September 9, 2023, had urged the I&B ministry to review the advisory as it poses challenges to APSFL’s sustainability and objectives, conflicting with their unified license agreement.

Then the ministry asked APSFL to provide a roadmap or timeline to extract themselves from the distribution of broadcasting activities.

APSFL in their representations to the I&B ministry highlighted that the draft BSR Bill, 2023 indicates an enabling provision for state government entities, like APSFL to provide broadcasting services for the fulfilment of social obligations and therefore, MIB may keep the advisory in abeyance.

As of today, the I&B ministry is actively pursuing Arasu Cable and APSFL to extract themselves from cable distribution businesses.