Govt to Raise License Fee For Cable Businesses

The government is mulling over measures to better regulate the cable television market by making it mandatory for foreign television channels to register their businesses here.

• License fee mandatory for channel companies and distributors
• License fee mandatory for DTH satellite broadcasting
• Renewal fee on income-sharing or profit-sharing basis
• Frequency to be sold on auction in case of shortage
• Rs 25,000 per channel for broadcasting IPTV programs

If this proposal translates into law, international channels like Star, Sony and CNN will have to get ´downlink´ licenses to broadcast their contents in Nepal. The draft of new National Broadcasting Regulation states that licenses to air paid channels containing advertisements will be issued upon payment of Rs 50,000. Paid channels sans advertisements will have to furnish a deposit of Rs 25,000 to get license.

In other words, channels like Star Plus that contain advertisements will have to pay Rs 50,000 to air their programs in Nepal, while paid channels devoid of advertisements, like Star Movies, will have to pay Rs 25,000 to get a license, if the draft regulation is endorsed.

Currently, paid international channels are airing their contents for free via distributors, who have exclusive rights to distribute the programs. To bring authorized distributors of paid channels into the legal ambit, the new regulation also aims to make it mandatory for them to get licenses before selling or broadcasting the contents here.

If the proposal is endorsed by the Parliament, authorized distributors, which sell programs of international channels, will have to get licenses after paying Rs 25,000 for each channel within six months of enactment of the bylaw. As per the existing bylaw, Rs 25,000 has to be paid by distributors for distributing up to 10 channels, though this provision has not come into practice.

However, no changes have been made in license fee for cable television companies that purchase international channels from distributors to broadcast them here. This means a deposit of Rs 100,00 for cable companies distributing more than 10,000 lines and Rs 5,000 for cable companies distributing up to 500 lines have been kept intact.

But while renewing the license, an annual broadcasting fee equivalent to two percent of the income generated or ten percent of the net profit or saving, whichever is higher, has to be paid by cable companies, if the draft regulation is endorsed. This provision also applies to all broadcasting companies, including domestic television channels, and FM and other radio stations, among others. At present, fee equivalent to four percent of the total income is being collected from broadcasting companies.

The government is also planning to regulate direct-to-home (DTH) satellite broadcasting by making it mandatory for companies providing such service to acquire licenses before distributing their services. The draft regulation has slapped a license fee of Rs 25,000 per channel on DTH satellite service, which provides more entertainment options than cable operators.

The draft regulation also states that companies wishing to broadcast IPTV -- television programs using internet protocol (IP) -- platform can do so upon depositing a license fee of Rs 25,000 per channel.

The draft regulation -- which also includes a provision of selling the frequency on auction in case of shortage -- is now being sent to the law ministry. After this, it will be forwarded to the parliament for final approval.