TRAI's amendments to interconnection norms upset MSOs

The MSOs feel that the latest amendments will adversely impact their business model. MSOs are set to take up this issue with TRAI and may also approach the TDSAT

e4m by Abid Hasan
Updated: Oct 1, 2013 8:05 AM
TRAI's amendments to interconnection norms upset MSOs

Some amendments made by the Telecom Regulatory Authority of India (TRAI) to the interconnection regulations applicable for Digital Addressable Systems (DAS) as well as the tariff order for DAS have the multi-system operators up in arms.

The amendments highlight three basic things in the DAS agreement, which the MSOs say will adversely impact their business model.

These key highlights are:
• Removal of carrying capacity of 500 channels
• MSOs disallowed from seeking a channel from a broadcaster, while at the same time seeking carriage fees from it
• MSOs forbidden from charging placement fees

Talking to exchange4media, Subhashish Mazumdar, Senior Vice President, In Cable remarked, “Carrying capacity is market driven. MSOs, if they so desire, will carry over 500 channels. However, every increase of channel capacity adds up to the capital cost and sometimes it may not be viable, both in business sense or even customer sense.”

He agreed that seeking a channel from a broadcaster, while at the same time asking for carriage fee was injustice. Mazumdar noted, “This is again based on market needs. If a channel needs advertising revenue, it will try to be there in major networks with maximum reach.”

The amendment in placement fees is the big issue as MSOs are not getting their maximum share in subscription revenues and the debate and evaluation is still going on in TRAI. In order to maintain the balance, MSOs put various channels in different bands such as Prime and Premium, which affects channel visibility.

Commenting on TRAI’s amendment forbidding placement fee, Mazumdar said, “MSOs can decide any placement of channels genre wise. Some broadcasters will have problems. Again these are all mutual business needs.”

While the intention of the regulator in prescribing these conditions is to link the a la carte rate of channels to the bouquet rates in order to ensure effective choice to the consumer, prescription of these conditions, however, does not intend to take away the freedom of the platform operators to price and package their offerings at the retail level.

Talking to exchange4media, Sisir Pillai, Chief Strategy Officer, Digicable felt that the amendment will impact the market a lot. “Abolishing capacity of 500 channels will not work as no one was going to carry it anyway,” he said, adding, “Currently, everybody is carrying 200 channels and if market demands will allow it, we will go beyond 500 channels.”

He further said that various MSOs are in talks and will take up this matter with TRAI soon. If the matter is still not resolved then they might knock at TDSAT’s door to look into the entire issue.

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