TRAI buying time through deadline extension to clear NTO 2.0 mess?

From the fear of consumer backlash to UP elections, reasons why the regulator granted four months' time to the industry, according to stakeholders

e4m by Javed Farooqui
Updated: Nov 12, 2021 11:40 AM  | 5 min read

The Telecom Regulatory Authority of India (TRAI) has extended the deadline for implementing New Tariff Order (NTO) 2.0 to 1st April 2022 following requests from the broadcasters and distribution platform operators (DPOs). The new pricing declared by the broadcasters was expected to come into force from 1st December.

While the extra time frame provided by the regulator is laudable, broadcast sector stakeholders are questioning the real motive behind TRAI's decision to grant almost four months time to the industry. One industry source said that the TRAI had not provided so much time even when the original NTO was being implemented for the first time in 2019. Another source said that the regulator didn't want a consumer backlash considering the pricing declared by the broadcasters. A third source believes that the four-month extension indicates that the TRAI did not want any trouble so close to the high-stakes 2022 Uttar Pradesh assembly elections.

According to a top-level executive from a media distribution firm, TRAI has avoided trouble by extending the implementation date. He added that the regulator didn't want any consumer backlash at a time when several key states including UP are slated to go to polls next year.

“Basically, the TRAI didn't want any disturbance till the UP elections, which is scheduled to take place next year. Otherwise, what's the point of giving so much time? TRAI didn't give so much even at the time of NTO 1.0 implementation. TRAI is buying time. Nobody knows what is going in their heads. They didn't want chaos in the next 20 days, so they have postponed it,” the executive said. 

“Anyone who buys time wants to look at some alternative measures. They will try to find a solution to this problem in the next four months. Right now, they are badly stuck in this NTO 2.0 quagmire. They cannot afford to implement NTO 2.0 with the kind of pricing that broadcasters have given.”
A senior official from the legal team of a broadcasting company said that these are incremental steps that TRAI is taking to come out of the NTO 2.0 mess. “The NTO 2.0 is far from implementation. Right now, only broadcasters have filed RIOs. Implementation will only happen when DPOs go to subscribers with their offerings and take the consumer choice. However, DPOs have told TRAI that they will not be able to implement NTO 2.0 because broadcasters have raised the prices. Since broadcaster RIOs are out, the DPOs will have to declare their prices. But what will they declare when they are unwilling to implement it?” the official said. 
While there is no change in TRAI's stance, the official said that the industry is hopeful that the regulator will take some corrective measures in the interest of the consumers. “So far, there is no change in TRAI's stance as far as NTO 2.0 is concerned, but the regulator will hold discussions with broadcasters and DPOs to find a way out of this situation. The industry is hopeful of some breakthrough as the present TRAI chairman PD Vaghela is much more receptive to suggestions. The TRAI also wants to keep its options open since the NTO 2.0 matter is also coming up for final hearing in the SC on 25th November,” he added.

The CEO of a leading cable TV company said that the TRAI has given enough time to the industry to migrate to NTO 2.0 regime. “DPOs will have to create their own offerings, educate the consumers about the new pricing, and get their choice. All of this needs time to implement. Consumers will get a choice to make a selection,” he stated.

He further stated that the price hike by broadcasters will compel subscribers to drop channels. “Unless broadcasters change their pricing, it will not be possible to bundle channels that are priced above Rs 12. If somebody does something which flouts the regulation, then it will lead to court cases. It's not possible to do deals with one broadcaster and ignore the other. Under NTO 2.0, we can't make bouquets with à la carte channels, even if we want to.”

The CEO also said that the TRAI cannot go back on NTO 2.0 having fought for its implementation in Bombay High Court and now in the Supreme Court. “It's not possible for TRAI to go back on NTO 2.0 implementation since it fought legally in the Bombay High Court and won the case. It has submitted affidavit in the Supreme Court in support of NTO 2.0. Now, it can't just turn around and say that all this was wrong, and we want to change it. NTO 2.0 will get modified only if there is an adverse verdict against TRAI in Supreme Court.”

Another senior official from a cable TV company said that the multi-system operators (MSOs) had asked for deferment of NTO 2.0 and not an extension. TRAI, he said, has extended the implementation date to prevent consumer backlash. He added that NTO 2.0 cannot be implemented in its current form as the prices will see huge inflation.

“We cannot afford to increase prices as our customers are going to OTT. Survival will become very difficult for cable TV service providers due to NTO 2.0. TV broadcasting sector has become over-regulated due to frequent interventions by TRAI. Today, a JioFiber customer will get all the OTT platforms and high-speed broadband service for just Rs 999 per month. This regulation will indirectly benefit telecom operators and OTT platforms. Broadcasters will also stand to gain since they can offer content through OTT, which is unregulated. The DPOs will end up losing customers to telcos and OTT. TRAI is behaving like a telecom regulator and treating the broadcasting sector like a stepchild,” he contended.

The official also said that TRAI makes regulations as per its whims and fancies and doesn't value any feedback from stakeholders. “Even DPOs had challenged NTO 2.0 in Kerala High Court. Unlike broadcasters, who have got pricing freedom on à la carte offerings, all the revenue streams of DPOs has a price cap whether it is Network Capacity Fee, carriage fee, or distribution margin.”

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