C. EDMONDS ALLEN
Suite 3-R
806 Lexington Avenue
New York, N.Y. 10065
Tel. 212-308-0606
Fax. 212-308-0608 25 July 2017
ceallen@compass].com
Re TCR Reference Numbe:
TOR1492263343905
Robert Stebbins, Esq.
General Counsel
Securities and Exchange Commission
100 F Street, NE
Washington, De 20549
Dear Mr. Stebbins:
On behalf of my associate, Vikki Choudhry, I am enclosing
herewith the following documents:
1. Letter from Vikki Choudhry to Secretary, Ministry of
Information and Broadcasting Government of India concerning
vertical integration in broadcasting sector in India dated
April 6, 2017
2, Letter from Vikki Choudhry to Secretary, Ministry of
Information and Broadcasting Government of India concerning
clear violation of DTH guidelines by M/s Tata Sky Limited
dated April 13, 2017
3. Letter from Vikki Choudhry to Secretary, Ministry of
Information and Broadcasting Government of India concerning
Tata Sky's decision to challenge TRAI tariff dated May 2,
2017
4. TCR Reference Number: TCR1492263343905 which was filed
with the SEC on April 16, 2017.
To date, Mr. Choudhry has received no communication from
the SEC as to the status of this complaint.
We have been in touch with several ministries and the
Government of India stating that "It seems officers in the ministry
are overlooking these issues even after repeated reminder to them due
to some vested interest which gives rise to a needle of suspicion of
corrupt practices.
Where as per the DTH guidelines and the DTH license
agreement entered by Ministry of Information and Broadcasting, Govt.
of India on behalf of H.E President of India. It clearly states in
clause 1.4 “ The Licensee shall not allow Broadcasting Companiesand/or Cable Network Companies to collectively hold or own more than
20% of the total paid up equity in its company at any time during the
License period. The Licensee shall submit the equity distribution of
the Company in the prescribed pro forma (Table I and II of Form-A)
once within one month of start of every financial year. The Government
will also be able to call for details of equity holding of Licensee
Company at such times as considered necessary.”
However, the Annual Report filings of 21st Century Fox Inc
for the year 2014, 2015, 2016 clearly states in its filings to SEC
that it holds 30% of shares in M/s Tata Sky Limited through Star India
Pvt Ltd. This is in violation of article 1.4 of DTH licensing
condition, as a broadcaster can and /or any cable network companies
can only hold 20% individually or collectively in a DIH company
There are definitely FCPA violations either directly by
Twenty-First Century Fox, Inc. or indirectly through its 100% owned
subsidiaries operating in India and this conduct by a US corporation
has to be thoroughly investigated.
We would appreciate your having the appropriate SEC officer
contact Mr. Choudhry by email at vikki.choudhry@outlook.com or
telephone 011-91-98-11144467 or me at the address above.
We thank you in advance for your attention and
consideration of our request.
With best regards,
Sincerely yours,
CEG)
CEA/bg
Enes.
cc: Mr. Vikki Choudhry
ce: Curtis E. Gannon, Esq.
U.S. Department of JusticeBY SPEED Post
To
The Secretary
Ministry of Information & Broadcasting
Government of India
Shastri Bhawan “A “Wing
New Delhi- 11000 1
Dated: 06" April 2017
Subject: Vertical Integration in Broadcasting sector in india
Dear Sir
| would again like to bring in your notice a communication sent dated 18.02.2017 Subject:
Definition of IPTV (Internet Protocol Television) Enclosed. The Ministry of Information and
Broadcasting have conveniently used terminology of OTT “Over The Top “in order to safe guard
the business interest of M/s. Star india and its wholly owned subsidiary operated illegal IPTV
distribution platform operation viz, Hotstar.
Recently the Ministry of Information & Broadcasting has started contemplating ignoring the
important provisions of cross media holding restrictions, in order to again benefit the business
interest of none other but Star TV group.
This type of schematic aid and abetment is continuing for the chosen few, won't surprise us, if
someday we hear about a strict legal action under FCPA being taken against its parent company
in USA, while the wholly owned subsidiary continue with its acts of defiance under the
protection extended by none other, but the Government of india, to aid continued violations of
Up linking and Down linking guidelines, permitted duration of advertisement rules and
regulations for the past more than @ decade, unrestricted operations of an illegal IPTV DPO
Which the Ministry has conveniently termed as an OTT (without even understanding what it
actually means and that TRAI has already come out with its recommendations on OTT
messaging) and to the extent of even allowing soft pornographic content flowing on this illegal
IPTV DPO. " HotStar”
While US ~ Indian Business Chambers, Hong Kong based business chambers and Trade
chambers of various other countries are being used to pressurize the Government of India to
Femove various restrictions in media business operations here under the garb of freedom to
operate and expression
Page tof 6The existing restrictions, in respect of the cross-holdings between Broadcasters and DPOs and
amongst DPOs have been prescribed in the DTH and the HITS guidelines. The existing Cable TV
Rules and Up linking/ Down linking Guidelines for Broadcasters do not provide for any
Festrictions on cross-holding. Broadcasters should not be allowed to invest in distribution
platforms like OTH, MSO, IPTV, HITS, Mobile TV and Broadband and vice versa. DTH Operators,
HITS, MSOs, Mobile TV, IPTV operators also should not be investing in each other business
Restrictions must be put in place in respect of investment by the same Venture Capital (VC) and
Foreign Institutional Investors (Fils) in more than one media / broadcasting / Distribution
Company.
The understanding of value chain of the TV channel distribution market comprises
broadcasters, Distribution Platform Operators (DPOs) and consumers. Broadcasters, who have
Permission to downlink their satellite TV channels, distribute them to the consumers through
various categories of Distribution Platform Operators (DPOs). The DPOs can be categorized into
Cable Operator MSO, OTH, HITS and IPTV operator. This value chain can be depicted as below:
Broadcasters
Cable Operator (MSO) HITS Operator
DTH Operator PTV Operator
Distributor
IP Network
Lco Leo
Consumer
Broadcasting and Distribution Value Chain
For the purpose of cross-holding/ticontrolz, a broadcaster includes the broadcaster itself, its
subsidiary companies /associate companies/ companies of its relatives, its holding company
‘and subsidiary companies /associate companies/ companies of its relatives of its holding
company and any other broadcaster in its ,control2. Similarly, @ OPO includes the DPO itself, its
subsidiary companies /associate companies/ companies of its relatives, its holding company
and subsidiary companies /associate companies/ companies of its relatives of its holding
‘company and any other DPO in its ,control”
Page 2 0f 6Telecom Regulatory Authority of India (TRAI)
Find it pertinent to also mention here, TRAI the sectoral rogulator and an expert body, takes
WPI and GOP deflator from the World Bank website as 2 measure of inflation to conduct
holistic tariff analysis, takes oral industry demands and representations, basis which, tariff
amendment order is notified for an increase of up to 27.5% for the Pay TV Broadcasters to
charge from consumers, without undergoing any consultation process or an open house
alscussions with all stake holders and consumers, that too while the Country is undergoing
general elections in 2024
When this said tariff amendment order is finally set aside after a year by Hon'ble TDSAT in an
appeal, with directions to come out with a cost based, consumer friendly tariff, a tariff
consultation process gets initiated by TRAI in early 2016 and finally notified in March 2017 that
too will only come into effect after another 5-6 months or maybe more, as this TRAI tariff
fixation exercise has been challenged by Star India, as they want to sell and distribute their
monopoly, copyright content at a much higher price, than the high MRP fixed by TRA, ignoring
the fact that India is the second largest television market in the world, even then a cost based
{arf not been notified. (Won't come as a big surprise, how things are moving ahead so far,
Consumers are forced to pay Rs. 500 to watch an IPL Cricket match of few hours, next year. )
Whereas tll now the Pay TV broadcasters and also sectoral regulator TRAI are keeping silent on
the refund / adjustment of this 27.5% tarff hike been collected from the consumers and being
retained by the pay TV broadcasters in separate accounts to be maintained as per the order of
the Hon'ble TDSAT. /As per TRAI own annual industry reports, this excess amount collected on
account of the impugned tariff order and now due for refund / adjustment to consumers after
the fresh tariff amendment order now been notified, is more than Rs. 6000 Crores, which is
'ying in separate accounts maintained by pay TV broadcasters and their vertically aligned OPOs.
Telecom Regulatory Authority of India (TRAl) has recommended the following:
|. The entity that controls a broadcaster or the broadcaster itself, shall be permitted to ,contro!
only one DPO (of any category i.e. either an MSO/HITS operator or DTH operator) in a relevant
‘market and vice-verso,
ii The entity that controls a vertically integrated DPO or the vertically integrated DPO itself
shail not be allowed to ,control2 any other DPO of other category.
il f@ vertically integrated DPO, while growing organically or inorganically, acquires a market
share of more than 33% in a relevant market, then the vertically integrated entities will have to
restructure in such a manner that the DPO and the broadcaster no longer remain vertically
integrated.
Page 30f6It is Understood that Ministry of Information & Broadcasting is seriously thinking of
implementing these above TRAI recommendations in the broadcasting sector to again benefit
its chosen few. While no serious endeavors have been made so far to bring in transparency
and adequate credibility and competition in the existing Television rating system, improve
functioning of the EMMIC “Electronic Media Monitoring Centre” to effectively monitor private
TV channels for violations of rules and regulations, especially Rule 7 (10) and 7(11) of the CTNR
Act 1995 and making the public broadcaster a more popular choice for the consumers, by
making available events of national importance like Cricket Matches, IPL, Pro Kabbadi and
wrestling etc. also on DoorDarshan channels, those are being run on taxpayers monies.
‘The existing restrictions, in respect of the cross-holdings between Broadcasters and DPOs and
amongst DPOs have been prescribed in the DTH and the HITS guidelines, The existing Cable TV
Rules and Uplinking/ Downlinking Guidelines for Broadcasters do not provide for any
restrictions on cross-holding. Broadcasters should not be allowed to invest in distribution
platforms like DTH, MSO, IPTV, HITS, Mobile TV and Broadband and vice versa. DTH Operators,
HITS, MSOs, Mobile TV, IPTV operators also should not be investing in each other business.
Restrictions must be put in place in respect of investment by the same Venture Capital (VC) and
Foreign Institutional Investors (Fils) in more than one media / broadcasting / Distribution
Company.
AAs per OTH guidelines under Eligibility Criteria a reasonable restriction was provided for Cross media as
well as vertical integration.
1) Eligibility Criteria:
Applicant Company to be an indian Company registered under indian Company's
Act, 1956.
+ Broadcasting companies and/or cable network companies shall not be eligible to
collectively own more than 20% of the total equity of applicant company at any time
during the license period. Similarly, the applicant company not to have more than
20% equity share in a broadcasting and/or cable network company.
And as per HITS guidelines
|) Eligibility Criteria:
+ The Applicant seeking permission for providing HITS services shall be @ Company
‘registered in india under The Company's Act, 1956,
+ Broadcasting company(ies) and / or DTH licensee company(ies) will not be allowed
to collectively hold or own more than 20% of the total paid up equity in the
company at any time during the permission period. Simultaneously, the HITS.
permission holder should not held or own more than 20% equity share in a
broadcasting company and /or DTH licensee company. Further, any entity or person
Page 4 of 6holding more than 20% equity in a HITS permission holder company shail not hold
more than 20% equity in any other Broadcasting companylies) and for DTH licensee
‘and viceOversa. The restriction will not apply to financial institution investors.
However, there would not be any restriction on equity haldings between a HITS
permission holder company and a MSO/cable operator company.
If TRAIL recommendation is accepted and implemented then we will have an absolute
‘monopoly situation for two to three media companies as explained below:
Zee Group having interest in TV Broadcasting, Cable TV distribution, DTH, FM Radio business
and newspaper; Star TV group having interest in TV Broadcasting, DTH, IPTV and newspaper,
Sun TV group having interest in TV Broadcasting, DTH, Cable TV, FM Radio Business and
ewspaper in regional languages, Times Group having interest in TV Broadcasting, FM radio
Business and newspapers. These media companies have already become huge Media
Conglomerate and showing their power in the market. These all vertically horizontally
integrated companies are near monopoly in the industry. If the current restriction as provided
in DTH and HITS guidelines are removed and /or diluted then these companies will finish up all
small media companies which will be against the interest of the ignorant consumers at large
and the industry itself. Interestingly the above mentioned media companies are controlling 90%
of total revenue of the industry.
There should be a cross holding restriction between broadcaster and distribution Platform
operators (DPO) so as to avoid any creation of monopolies through vertical and /or horizontal
integration by the broadcaster and /or DPOs. Any broadcaster having more than 20% equity in
@ company could block the content of a competitive broadcaster in the OTH distribution
network by citing the reason of insufficient bandwidth. Similarly with more than 800 channels
that are being broadcasted, similar anti-competitive behavior is possible from the broadcasters
who may have a stake in DTH/Cable MSO/ HITS / IPTV operator
Broadcasters should not be allowed to invest in distribution platforms like OTH, MSO, IPTV,
HITS, Mobile TV and Broadband and vice versa. DTH Operators, HITS, MSOs, Mobile TV, IPTV
operators also should not be investing in each other business. Restrictions must be put in place
in respect of investment by the same Venture Capital (VC} and Foreign Institutional investors
(Fils) in more than one media / broadcasting / Distribution Company.
The media plays an important and multiple roles in society. The most obvious of these are
collection and dissemination of information, communication and entertainment among the
People. Further, through its reach to the people the media also transmits social and cultural
values and serves as a medium of education Thus a major motivation behind the restrictions on
cross media ownership is to preserve the diversity of media so that citizens have access to
diverse viewpoints that enable them to have access to a wide variety of views and thereby
participate fully in democratic process.
Page Sof 6Various foreign countries including USA and Australia have very stringent regulation in media
sectors including restriction in media sectors whether it is FDI and / or vertical /cross-media
restrictions. In India the current sets of regulators for different forms of media are toothless in
regard to handling an issue this complex. Hence, a comprehensive regulatory framework i.e.
Broadcast Regulation Act is need of the day for media for oversight on potential anti
Competitive behavior and outcomes in a fast growing and technologically developing sector.
Till then it’s requested not to allow and extend any further flexibility to these chosen few with a
preferential treatment in order to make their businesses super profitable at the cost of ignorant
consumers, national interest and security.
Thanking You
Yours sincerely
\ 0
Vikki Choudhry)
Member: BES, SCTE — india, DDCA and RAAG
8-10 Friends Colony (West) New Delhi~ 1100 65
Email: vikki.choudhry@outlook.com
Mobile: +91 98111 44467
@vikkichoudhry
Copy To:
Hon'ble Prime Minister of india
Shri. Nripendra Misra, Principal Secretary to Hon’ble PM
Shri. Ajit Doval KC, National Security Advisor
Hon'ble Minister for Information & Broadcasting
Hon'ble Minister of State, Ministry of Information & Broadcasting
Chairperson, Telecom Regulatory Authority of India
Shri Anurag Thakur, Chairman Parliamentary Standing Committee on information & Technology
All the Hon'ble members of Parliamentary Standing Committee, on Information & Technology
Page 6 of 6Y SPEED POs:
To,
The Secretary
Ministry of information & Broadcasting
Government of india
Room No 655.A Wing Shastri Bhavan
Dated: 13.04.2017
‘Sub: Clear Violation of DTH guidelines by M/s Tata Sky Limited
Dear sir,
This sin continuation to my recent letter sent by Speed Post dated 6” April 2017
Subject: Vertical integration in Broadcasting sector in India
{would like to put forward the violations of licensing conditions which various DTH
operators are committing, Some of these DTH operators have been violating the
ross-media restriction clause of OTH guidelines. During the process of getting DTH
license, DTH operators have signed a license agreement with the Ministry of
Information & Broadeasting wherein they have accepted the various licensing
Conditions of DTH guidelines and also given an affidavit to the ministry towards
this whereby clearly mentioning that they wil strictly abide by various licensing
Conditions including various restriction clauses vis-d-vis in shareholding, FDI ete
However, DTH operators seem to have been violating the license agreement and
‘the affidavit given in this respect and thereby violating the DTH guidelines,
One such example is about the violation of article 1.4 of elighility condition of
OTH guidelines by M/s Tata Sky Limited, one of the major DTH service provider in
lngia which has crossed about 13-14 million of subscribers base. The company is 2
Joint venture of Tata Sons and Star TV group.
AAs per the OTH guidelines of Ministry of information & Broadcasting, article 1.4
and 5 which stato as follows:
14 The Licensee shall not allow Broadcasting Companies and/or Cable Network
Componies to collectively hold or own more than 20% of the total paid up equity in
its company ot any time during the Ucense period. The Licensee sholl submit the
equity distribution of the Company in the prescribed proforma (Table | and 1! of
Form-A) once within one month of start of every financial year. The Government
will also be obte to call for details of equity holding of Licensee Company at such
times as considered necessary.
1.5 The Licensee company not to hold or own more than 20% equity shore in a
broadcasting and/or Cable Network Company. The Licensee shall submit the details
of investment made by the Licensee Company every year once within one month of
start of that financial year. The Government will also be able to call for details of
investment made by the Licensee Company in the equity of other companies at
such times as considered necessary.
However, tho Annual Report of 21st Century Fox (a company owned by Rupert
ch and oavner of Star TY group) for the year 2035, clearly
A Reminder To EOW Delhi Police On The Complaint Made Dated 1.08.2017 On Cheating To The Extent of More Than Rs. 6000 Crores Illegally Collected From Consumers