'Conditional nature of participation will harm broadcasters'

CHENNAI: A day after the Madras High Court issued an interim order allowing the Sun Group to participate in the July 27 Phase-III auction process of FM radio, an FM broadcaster Entertainment Network India Limited moved the court contending that the conditional nature of their participation would harm other broadcasters.

The court had yesterday ordered that results of the auction be kept in a sealed cover till further orders.

The judge had also said that the decision is subject to the result of the main writ petition filed by the Sun Group, seeking a direction to quash the order passed by the Information and Broadcasting Ministry.

The Ministry had disallowed the group from taking part in the auction process on the basis of non-security clearance from the Union Home Ministry.

The company, in its impleading petition today, sought a direction from the court to conduct auctions after conclusion of final hearing on the petitions filed by the Sun Group and to expedite the hearing since extensions given to licenses of all phase-II players expires in September 2015.

Justice M Sathyanarayanan, before whom the impleading petition came up for hearing, posted the matter to August 21 and directed the SUN Group to file its counter-affidavit.

The court said it would also hear on that day the six petitions filed by three Sun Group companies - KAL Radio, South Asia FM and Sun TV Network - also.

Entertainment Network made it clear it had no objection to participation of the Sun Group in the auctions and said no useful purpose would be served by keeping the results in a sealed cover as all broadcasters participating in the auction have simultaneous multiple-round ascending e-auctions.

This system entails each broadcaster having a separate computer terminal where they can follow the progress of the auction and whether they had won it for a city or not.

"To that extent, the result is already public and no useful purpose would be served by keeping the results in a sealed cover," the company said.

As per the conditional order, the entire migration process would remain in suspended animation leading to 'complete chaos and uncertainty' on the future of the present licensees because the bid prices would determine non- refundable one-time migration fee, the company said.

It would also lead to reckless bidding as the Sun Group and similarly-placed bidders would have no obligation to operate the licenses even after winning, should the court finally disqualify them. It would raise bids unfairly and hurt the interests of other fellow bidders and broadcasters, it said.

If bidding was done afresh, there would be a further problem as bidders would already have exposed their strategies in the cancelled auctions, it said.