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TRAI issues revised tariff with overall ceiling for cable TV services in non-CAS areas

05-October-2007
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TRAI issues revised tariff with overall ceiling for cable TV services in non-CAS areas

The Telecom Regulatory Authority of India (TRAI) has issued a revised tariff order with an overall ceiling for cable TV services in the non-CAS areas. The revision is in the form of Telecommunication (Broadcasting and Cable) Services (Second) Tariff (Eighth Amendment) Order, 2007 that was issued on October 4. In a press statement, TRAI has ordered broadcasters to offer all channels on an a la carte basis to multi system operators (MSO).

The order is aimed at protecting the interests of the consumers in a more transparent and effective manner. This order amends some of the provisions of the existing tariff order for cable services in the non-CAS areas. The order was based on invited comments from all stakeholders, followed by open house discussions in Jaipur, Hyderabad, Kolkata and Lucknow.

TRAI has fixed the tariffs based on the status of cities. The categories are A, A-1, B, B-1 and Others. While the tariffs fixed vary from a minimum of Rs 77 for all categories for free-to-air channels, the highest tariff fixed is Rs 260 for A and A-1 cities, where the offer is a minimum of 30 free-to-air channels and more than 45 pay channels.

“Broadcasters must provide all their channels on a la carte basis and declare a la carte rates to the MSOs. Bouquets of channels can also be offered. But to prevent perverse pricing of bouquets and to make the a la carte choice effective, it has been provided that the bouquet rates and a la carte rates of channels, forming part of a bouquet, should satisfy certain conditions. The sum of a la carte rates should not exceed one and half times the bouquet rate, and a la carte rate of each channel cannot be more than three times the average rate of the pay channel in the bouquet,” said the statement.

According to the statement, other conditions that need to be fulfilled are that the rates of bouquets and standalone channels as existing on December 1, 2007 cannot be increased by more than 4 per cent by the broadcasters. Also, the composition of bouquets as existing on December 1, 2007 cannot be changed. Appropriate provisions have been made to address situations such as non-availability of channel for distribution due to termination of contractual obligations, conversion of a pay channel to free-to-air, or vice versa.

Broadcasters can introduce new pay channels and also new bouquets consisting of new or existing pay channels and decide the prices thereof. But this will be subject to conditions for preventing perverse pricing as indicated above, and will be further subject to interventions by TRAI, based essentially on the existing principle that rates of new channels should be similar to similar channels.

The existing tariff order issued in 2004 essentially froze the cable charges payable at different levels of the distribution chain at the rates prevailing as on December 12, 2003, while making provisions for increases on account of new pay channels and inflation. The implementation of the existing Tariff Order was difficult because there was no uniform ceiling in absolute terms. The ceiling was in terms of freezing whatever cable charges were being paid individually by each of the millions of consumers or service providers, the statement said.

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