New Delhi, July 7 (IANS) The union cabinet Thursday approved expansion of FM radio broadcasting services through private operators to 227 new cities and allowed channels to broadcast news of All India Radio (AIR).

The cabinet also listed categories which will be considered as non-news for the purpose of broadcast.

Information and Broadcasting Minister Ambika Soni said the FM Phase-III policy will extend radio service to about 227 new cities, in addition to the 86 cities where it is already present. A total of 839 new FM radio channels will be launched in 294 cities.

She said foreign direct investment in a private FM broadcasting company has been increased from 20 to 26 percent.

She said the policy will result in coverage of all cities with population of one lakh and above.

The Phase I and Phase II policies have resulted in a total revenue accrual of about Rs.1,733 crore up to May 31, 2011, by way of one time entry fee, migration fee and annual fee and other charges.

Soni said the private FM channels will now be allowed to carry news items from All India Radio.

Asked why news from agencies has not been allowed to be broadcast as AIR also sourced information from wire services, Soni said she was not ruling it out.

She said her ministry had discussed the issue of allowing the private FM channels to air news sourced from agencies with other ministries, including the home ministry.

"When greater liberalisation takes place in time to come, it may be considered. It depends on what various ministries say and how the system functions," she said.

Asked why private broadcasters have not been allowed to air their own news, she said the government was gradually allowing news in the private radio stations.

"Let's see how it goes forward," she said.

The government will conduct e-auction of the licenses in batches in order to roll out the new stations. Soni said the ministry will be appointing an independent expert agency to conduct the e-auction.

The FM radio operators will be permitted to air news bulletins of AIR in unedited format.

Categories like sporting event information, traffic and weather, coverage of cultural events, festivals, coverage of topics pertaining to examinations, results, admissions, career counselling and availability of employment opportunities will be treated as non-news and non-current affairs and hence their broadcast will be permissible.

Broadcast about public announcements pertaining to civic amenities like electricity, water supply, natural calamities and health alerts, as provided by the local administration, will also be treated as non-news.

The limit on the ownership of channels, at the national level, has been retained at 15 percent. However, channels allotted in Jammu and Kashmir, northeastern states and island territories will be allowed over and above the 15 percent limit.

Soni said licences for stations in these regions will be at half the rate of annual licence fee for an initial period of three years.

"Moreover, they will be allowed to utilise Prasar Bharti infrastructure at half the lease rentals in the special regions," she added.

Private operators have been allowed to own more than one channel but not more than 40 percent of the total channels in a city subject to a minimum of three different operators in the city.

The cabinet has also cleared the information and broadcasting ministry's proposal for conducting ascending e-auction, as followed by the telecommunication department for the auction of 3G and BWA (broadband wireless access) spectrum.