Exclusion of Broadcasters from Bidding for DTH Licenses

In MAG Entertainment (Pvt) Ltd. vs. Independent Newspapers Corporation (Pvt) Ltd. and others (2018 SCMR 1807), the Supreme Court of Pakistan addressed the legality of excluding broadcasters from bidding for Direct To Home (DTH) licenses under the Pakistan Electronic Media Regulatory Authority (PEMRA) Ordinance, 2002. The Court upheld PEMRA's authority to prevent vertical integration of media ownership by excluding broadcasters from DTH distribution licenses to promote fair competition and diversity of media ownership.

Background:

The case arose from a challenge to PEMRA’s decision to exclude broadcasters from participating in the bidding for DTH licenses, a decision aimed at preventing undue concentration of media ownership. PEMRA initiated the bidding process for DTH licenses in June 2016 and issued relevant regulations that excluded broadcasters from participating. Independent Newspapers Corporation (Pvt) Ltd. filed a writ petition against these exclusions, arguing that the PEMRA rules and regulations exceeded the authority granted under the PEMRA Ordinance, 2002.

The Lahore High Court declared certain PEMRA rules ultra vires, allowing broadcasters to bid for DTH licenses. PEMRA and successful bidders for the DTH licenses appealed this decision to the Supreme Court.

Key Issues:

Authority of PEMRA to Exclude Broadcasters from DTH Licenses: Whether PEMRA has the statutory authority under the PEMRA Ordinance, 2002, to exclude broadcasters from obtaining DTH distribution licenses to prevent vertical integration.

Legality of PEMRA’s Rules and Regulations: Whether the rules and regulations framed by PEMRA, particularly Rule 13 of the PEMRA Rules, 2009, and relevant provisions of the DTH Regulations, 2016, are consistent with the objectives and provisions of the PEMRA Ordinance.

Interpretation of Provisions Related to Media Monopolies: The proper interpretation of Sections 23 and 39 of the PEMRA Ordinance concerning the prohibition of monopolies and the regulation of media ownership concentration.

Court's Analysis:

Statutory Authority of PEMRA: The Supreme Court affirmed PEMRA’s authority to prevent undue concentration of media ownership under Section 23 of the PEMRA Ordinance, 2002. The Court held that PEMRA is empowered to regulate media ownership to promote diversity and prevent monopolistic practices, including barring broadcasters from also holding DTH distribution licenses.

Legality of Rules and Regulations: The Court found that the relevant rules and regulations, including Rule 13 of the PEMRA Rules, 2009, and the DTH Regulations, 2016, were consistent with the objectives of the PEMRA Ordinance. The regulations were designed to promote fair competition and prevent the concentration of media ownership, which aligns with the legislative intent of the Ordinance.

Interpretation of Media Monopoly Provisions: The Court clarified that Sections 23 and 39 of the PEMRA Ordinance provide PEMRA with the discretion to define and prevent undue concentration of media ownership. It emphasized that ensuring a competitive media landscape with multiple independent voices is essential to safeguarding public interest and freedom of expression. The Court rejected the High Court’s interpretation that the Ordinance allowed broadcasters unrestricted rights to participate in DTH licensing, stressing that the provisos must be interpreted to align with the broader regulatory framework established by PEMRA.

Court's Conclusion: The Supreme Court allowed the appeals, setting aside the Lahore High Court’s judgment. The Court upheld PEMRA’s authority to exclude broadcasters from bidding for DTH licenses to ensure diversity and prevent undue concentration of media ownership.

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