Broadcasters could gain stronger audit powers under TRAI’s proposed DRM framework

The Telecom Regulatory Authority of India’s proposed audit manual for digital rights management (DRM)-based television distribution systems could strengthen broadcasters’ ability to scrutinise subscriber data and identify revenue discrepancies, while increasing the compliance burden on distribution platform operators (DPOs), including internet protocol television (IPTV) providers.

The draft, dated October 9, sets out detailed procedures for auditing digital addressable systems, covering subscriber management, channel encryption, fingerprinting, set-top boxes and software applications used to deliver television services. Stakeholders have been invited to submit comments by October 30.

The proposed framework is significant for the commercial relationship between broadcasters and distributors, where the accuracy of subscriber records and monthly subscription reports affects revenue reconciliation. By prescribing more detailed audit procedures, the manual seeks to make technical compliance and subscription reporting easier to verify.

"The biggest benefit would be a more structured way to verify the numbers being reported by distribution partners. When subscriber records across different systems do not match, a standardised audit trail can help establish where the discrepancy has occurred,” said an executive at a television broadcasting company.

Broadcasters gain a clearer route to challenge discrepancies

Under the proposed framework, auditors would examine the distributor’s subscriber management system (SMS) and DRM system, including the information maintained across the two systems. The audit would also cover channel and package configurations, activation and deactivation records, encryption, fingerprinting and the identification of individual consumer subscriptions.

These checks could help broadcasters establish whether reported subscriber figures correspond with the underlying system records. The manual also provides for the examination of inventory and configuration details, as well as the verification of relevant information supplied by broadcasters.

A key commercial implication is the proposed treatment of discrepancies in subscription reporting. If an audit identifies a variance of more than 0.5%, the distributor would have to inform the broadcaster so that invoices already issued and paid can be revised, as applicable.

This could make discrepancies more consequential for distributors, particularly where differences arise from data-management practices, system integration or incomplete records. For broadcasters, it offers a more defined basis for seeking reconciliation rather than relying solely on the distributor’s reported figures.

However, the existence of an audit finding would not, by itself, establish deliberate under-reporting. Differences could also arise from operational or technical issues that need to be examined through the prescribed process.

Distributors face greater documentation and coordination requirements

For DPOs, the draft could mean closer scrutiny of the systems used to manage subscribers, activate services and generate reports. Distributors would need to ensure that relevant records are accessible, consistent and capable of being extracted for audit.

The proposed manual also sets out documentation requirements covering system architecture, servers, reporting infrastructure, customer acquisition processes and the management of subscriber data. The audit scope includes checking the relevant compliance requirements for DRM, encryption, fingerprinting and set-top boxes or software applications used on consumer devices.

The manual proposes retaining relevant audit records for three years and requires distributors to notify broadcasters of changes to their systems within seven days. Such requirements could necessitate more structured internal processes, particularly for operators whose subscriber management and DRM platforms are maintained across multiple systems or locations.

"The challenge is not simply the audit itself. Operators will need to ensure that data from different platforms can be extracted, reconciled and presented in the prescribed format. That requires coordination between technology teams, subscriber management teams and external auditors,” said an executive at a television distribution company.

The compliance impact could vary across operators. Distributors with integrated systems and established audit processes may be better placed to meet the requirements, while operators relying on older systems or multiple technology vendors could need additional time and resources to organise records and address gaps.

Infrastructure sharing could complicate audits

The proposed framework also addresses cases where multiple distributors share infrastructure, including elements of their addressable systems.

In an audit of an infrastructure seeker, the review would be limited to its own system and the components obtained through the sharing arrangement. An audit of an infrastructure provider, meanwhile, would cover the systems under its ownership as well as elements shared with other distributors.

The manual indicates that joint audits may be advisable where distributors share infrastructure, particularly when they use a common SMS. Broadcasters could also conduct joint and simultaneous audits covering distributors sharing such infrastructure, where permitted under the applicable regulations.

This could improve visibility across interconnected systems, but it would also require distributors to coordinate access to records and technical infrastructure. Operators would need clarity on which party is responsible for producing specific records and addressing any deficiencies identified during an audit.

Auditors and technology vendors will also be affected

The draft places greater emphasis on the scope and documentation of audit work. Auditors would need to examine compliance against the relevant regulatory requirements and record deviations or abnormalities in their reports.

Technology vendors supplying DRM, subscriber management, reporting and related systems could face greater demands from distributors for audit-ready records, reliable data extraction and documentation of system configurations. The extent of any additional development work would depend on the systems already deployed and the gaps identified during audits.

For auditors, standardised procedures could make reports more consistent and improve comparability across operators. At the same time, the detailed scope would require adequate technical expertise and careful documentation of findings.

The proposed manual does not replace the underlying Interconnection Regulations. Its significance lies in specifying how audits of DRM-based addressable systems should be conducted and documented.

For broadcasters, that could improve the ability to verify subscription information. For distributors, the central question will be whether the requirements can be implemented without disproportionate operational costs or repetitive checks. The consultation will give both sides an opportunity to flag practical concerns before the framework is finalised.