August 12, 2003  Copyright Mediaware Infotech Pvt Ltd

The Foreign Influence
The major viewpoint (subscribed by politicians as also by nationally controlled media) is that editorial control should be in the hands of resident nationals to ensure sovereignty of the country. Some have even compared this with the executive, legislature, or judiciary being controlled by people who are not Indian citizens. Ignoring a most important difference that the latter bodies are not commercial organizations!

Nonetheless, the media after all does act as a vital link between institutions and the individual. And plays an even more important role in influencing public opinion. Making effective control of media equivalent to excessive influencing of public opinion, with further implications on freedom of expression & multiplicity of opinion.

Changing Roles
To go back in history, many newspapers were major contributors to the freedom movement. In recognition of this, newspapers were granted many concessions and sops post-independence from the (new) government. However, after 5 decades, many of these sops may not even be justified (as newspapers operate as commercial ventures in a de-regulated free market). However, news content is still a sensitive issue. (This notwithstanding the recent reports of paid news & ads embedded in content.) And it is here that newspapers, newsmagazines as well as News Channels play a central role.

Meanwhile, that juggernaut called economic liberalization & globalisation rolled in. Industries consolidated & merged. Control passed on to trans-national companies, resulting in large flows of foreign investments into the country. And ushering electronic media like television & radio. Bringing in benefits of investments, experience, expanded markets & competition.

Back-door Control
Taking all these factors into account, the Indian government had stipulated a 26 per cent equity cap when it finally opened up newspapers & news channels to foreign investment. However, foreign media owners opted for a back-door control by setting up shell companies which abided by the letter but not the spirit of the law. By which a co. with a paid-up capital of Rs 0.1 million ended up controlling a 24 hour television news channel!

Realising that editorial control was being exercised through the backdoor by foreign media moguls prompted Indian media houses to close ranks under the banner of the Indian Media Group (IMG), and asked the Prime Minister to establish comprehensive guidelines for FDI in all media along with a regulatory authority to enforce them.

Rationale for Regulating Foreign Editorial Control
All said & done, what are the reasons for ensuring that no foreigner should control a nation's media content?

One line of reasoning is as follows: if the law permits foreigners to directly control editorial, it will make it difficult (if not impossible) for any government to take action on a foreign national for publishing / broadcasting seditious, anti-national content. Here, it is relevant to mention here that many developed countries including U.S.A. & U.K. permit foreign companies to control newspapers & news channels within their country. Perhaps the assumption here is that no commercial organization will indulge in publishing / broadcasting content which is seen as harmful to the nation/people. At least not beyond a point as it will diminish their value in the eyes of their readers/viewers. And certainly not for long !

Although it is possible to set up stringent guidelines, its very "immediate" nature does not permit putting news through pre-publishing / pre-broadcasting checks. To prevent foreign companies from acquiring control over Indian newspapers & news channels (if that is the intention), ceiling on FDI is the preferred method. And that is exactly what the Indian Govt. has done.

However, it is apparent that some foreign conglomerates have set up shell companies which adhere to the letter of the law (FDI cap), but violate them in spirit (operations including content are funded, created & supplied by foreign companies). There is of course, no justification for this.

The Indian Govt. must put comprehensive regulations in place, which includes a common policy for all media segments. Leaving the door open a little wider for foreign institutional investors (FIIs) who are interested returns.