TRAI may issue amended broadcast tariff norms in Oct second half

The authority culminated the consultation process on the matter with an Open House Discussion on September 8

e4m by Javed Farooqui
Published: Sep 20, 2022 7:50 AM  | 4 min read
TV

The Telecom Regulatory Authority of India (TRAI) is planning to come out with amended broadcast tariff guidelines between October 15 and 25, a senior official told exchange4media. The amended tariff framework will put an end to the long-drawn tussle between broadcasters, distribution platform operators (DPOs) on one side and the TRAI on the other side.

The broadcast industry and TRAI have been at loggerheads over New Tariff Order (NTO) 2.0 which saw the MRP cap for inclusion in a bouquet getting reduced to Rs 12, besides restrictions on bouquets due to the introduction of twin conditions.

The TRAI initiated a consultation process in May to relook at the NTO 2.0 after the broadcasters agreed to withdraw petitions from the Supreme Court. The broadcasters had failed to secure any relief from the apex court and the Bombay High Court, which had upheld the NTO 2.0 barring the second part of the twin conditions. The broadcasters challenged the Bombay High Court verdict in the Supreme Court.

The consultation process on 'Issues related to New Regulatory Framework for Broadcasting and Cable services' culminated with the Open House Discussion (OHD) on September 8. The deadline for sending comments/counter comments on the consultation paper ended in June.

TRAI Advisor (B&CS) Anil Kumar Bhardwaj said that the regulator generally takes 6 to 8 weeks to issue a regulation once the consultation process gets completed with the OHD. "We normally take 6 to 8 weeks after OHD. Given that, we should be able to come out with the outcome of the ongoing consultation on regulatory framework between 15th and 25th October," Bhardwaj told e4m.

The regulator has received 38 comments and two counter-comments from different industry bodies, organisations, and individuals. Apart from the comments/counter comments and OHD, the regulator also held more than 10 one-on-one meetings with different stakeholders from the TV broadcasting ecosystem.

While stating that the amended tariff order and regulations are still a work in progress, Bhardwaj said that the regulator will look at three key aspects while finalising the guidelines. "Our primary aim is to protect consumer interest. We also want to take care of the interests of all stakeholders in the value chain be it broadcasters or operators. We will create a level playing in the industry," he averred.

Noting that the regulator is aware of the challenges faced by the pay-TV industry, Bhardwaj said that the TRAI will do its level best to ensure that the industry remains competitive in view of the changing content consumption pattern.

"We are aware of the challenges faced by the pay-TV industry and we have also categorically mentioned the same in the consultation paper. If the DTH and cable service providers see a dip in the customer base, it will also impact the broadcasters. We will do our best to assuage the concerns of the industry," he stated.

The TRAI has thrice extended the deadline for implementing NTO 2.0 due to the court cases and the consultation process. Recently, the deadline for enforcing NTO 2.0 at the consumer level was moved to February 28, 2023.

Broadcast industry remains a divided house

While none of the stakeholders are happy with NTO 2.0, the new tariff regime has sharpened the divide in the broadcasting sector. Broadcasters, multi-system operators (MSOs) and DTH operators agree to disagree on most issues related to tariffs and regulation.

In its recent submission to the TRAI, the Indian Broadcasting and Digital Foundation (IBDF) urged the TRAI to deregulate broadcast tariffs and remove restrictions on channel bundling. It also stated that TV broadcasters are losing subscribers as well as revenue.

While making a point that there is no need to tinker with the present regulatory regime (NTO 1.0), the IBDF said that the consumers presently have the choice to subscribe to channels as part of a bouquet or a la carte offering.

If IBDF is against the reduction in price cap to Rs 12 and twin conditions, the AIDCF, which is the apex body of leading MSOs, has come out in support of the same. In its submission, the AIDCF said that the Rs 12 MRP cap will ensure transparency and safeguard the interest of consumers from perverse pricing. The federation also argued that twin conditions will create a linkage between bouquet and channel prices.

DTH Association suggested that the TRAI must adopt price forbearance as regulatory micromanagement has stagnated the growth of the Pay-TV industry. The association also stated that the sector has become uncompetitive against DD Free Dish and OTT due to discriminatory policies.

On the TRAI's prescription of a 35% distribution fee (20% fixed and 15% variable), the DTH association said that the margin is too lopsided and discretionary and is the root cause of negotiations, disputes, and litigation in a very straightforward content owner/content distributor relationship.

The AIDCF, on the other hand, suggested that the distribution fee should be kept flat at 35% for both a la carte channels and bouquets. This, the AIDCF contended, will ensure that the DPOs are not arm-twisted to meet unreasonable penetration targets set by the broadcaster.

 

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