After deep deliberations on the TRAI tariff order for Digital Addressable Cable TV Systems (DAS) dated April 30, 2012, the Indian Broadcasting Foundation (IBF) has stated that it sees the order as a positive move for the industry.
In a conversation with exchange4media, Uday Shankar, President, IBF said that IBF’s view is that this is a welcome move, which has many positives to it. It is a sincere attempt to align interests of multiple stakeholders including broadcasters, Multiple System Operators (MSOs) and Local Cable Operators (LCOs). The notification brings a constructive order in terms of retail tariff, bringing a uniform order for DTH and digital cable, including recognising the role of MSOs and creating the right infrastructure for them.
The single big area of concern however is carriage fee. Carriage fee has crippled various broadcasters, especially the small sized companies, and it has restricted a broadcaster’s ability to invest in content and other activities of a channel. In the long-term, this impacts the consumer’s interests in context to access to good quality content.
The positive side
Shankar explained that IBF welcomed that retail tariff was left to market forces. He said, “We would have ideally liked wholesale tariff also to be left to market forces but the authority wanted to align DTH and digital cable, so we understand the logic behind this.”
The IBF also appreciated the emphasis laid for 500 channels, which was a bare minimum in a market such as India given its cultural and linguistic diversities. The order also attempted to create a content highway and tackle distortions that can come in play with insufficient frequency and bandwidth constraints.
The MSOs’ role is an important aspect of the order. The MSO is recognised as the key stakeholder in the delivery scheme. From compliance, transparency and book keeping point of view, it was important that the billing obligation is with MSOs. This is good from broadcasters’ viewpoint as the number of MSOs is manageable and their corporatisation is better in comparison to LCOs.
The MSO end of the business has been given enough structural support for it to access corporate capital and investment in a positive manner.
Shankar stated that in all, the order has pushed the case of digitisation in a significant manner.
Carriage fee an area of grave concern
As is known, the IBF has had a series of meetings with TRAI and Ministry of Information and Broadcasting to emphasise the problems emanating from carriage fees. This continues to be an area of concern in the new order as well. “There is no clarity on carriage fee yet except for making the figures public. But this is a complicated and an ineffective exercise. Any operator could state a carriage fee but it’s difficult to even scan it, let alone monitor it,” Shankar pointed out.
He added, “There must be intervention at this stage itself to make sure carriage fee is rationalised and it does not impact investment in content. Carriage fee has bankrupted broadcasters and has led to highly inadequate investment in content. Consumers will lose out on one of the primary benefits of digitisation, which is better content, if this is not addressed.”
IBF suggested that TRAI should immediately take note of this and bring in enough enablers in the digital tariff order to ensure that carriage fees are brought down to a minimum level.
IBF welcomed the fact that reporting and transparency has been set aside very clearly but some steps to deflate carriage fee must come in play.
In past meetings, the ministry and authority recognised carriage fee as a distortion and there were conversations to even suggest complete abolition. The order so far does not seem to make any attempt to rationalise or put a cap on carriage and that is disappointing.
A uniform digital order
Shankar observed that the order was not the most ideal for all but when there is an attempt to align different stakeholders, certain compromises have to be made. However, carriage fee is a very grave concern for the industry.
Does IBF expect TRAI to revisit the carriage aspect of the order? Shankar replied, “Why not? This is an order and no one expects the first order to be a perfect final thing. It is not legislation and it is the authority’s mandate to revisit the order time and again.”
Shankar emphasises on the fact that this was the first time when there has been a serious attempt to bring uniform play for digital cable and DTH. He said, “The order allows various stakeholders to package and charge consumers and that is recognition of enough competition in the market. This is a different leap on TV regulation altogether, so this is a big step forward. However, the carriage fee issue will have a deep impact. It can cause a dent to consumer interest and we hope that this area is addressed.”