TRAI finally releases consultation paper on broadcast tariff

The paper seeks stakeholders’ comments on points or issues that are pending for full implementation of New Regulatory Framework 2020

e4m by exchange4media Staff
Published: May 7, 2022 12:02 PM  | 6 min read

Telecom Regulatory Authority of India (TRAI) has issued Consultation paper on Issues related to New Regulatory Framework for Broadcasting and Cable services.

The authority is issuing this consultation paper for seeking stakeholders’ comments on points or issues that are pending for full implementation of New Regulatory Framework 2020. This paper primarily discusses issues related to discount given in the formation of the bouquet, ceiling price of channels for inclusion in bouquet, and discount offered by broadcasters to DPOs in addition to distribution fee.

In consonance with the complete digitization of the cable TV sector, TRAI on 3rd March 2017 notified the ‘New Regulatory Framework’ for Broadcasting and Cable services After passing legal scrutiny in Hon’ble Madras High Court and Hon’ble Supreme Court, the new framework came into effect from 29th December 2018.

Upon implementation of the New Regulatory Framework 2017, TRAI noticed some inadequacies impacting the consumers. As the New Regulatory Framework changed quite a few business rules, many positives emerged. To address certain issues that arose after implementation of new regulatory framework, after a due consultation process with stakeholders, TRAI on 01.01.2020 notified the New Regulatory Framework 2020.

Some stakeholders challenged provisions of Tariff Amendment Order 2020, Interconnection Amendment Regulations 2020 and QoS Amendment Regulations 2020 in various High Courts including in the Hon’ble High Court of Bombay and Kerala. Hon’ble High Courts upheld the validity of New Regulatory Framework 2020 except for a couple of provisions.

The provisions related to Network Capacity Fee (NCF), multi-TV homes and long term subscriptions of New Regulatory Framework 2020, have already been implemented and due benefits are being passed on to the consumer at large. Every consumer now can get 228 TV channels instead of 100 channels earlier, in a maximum NCF of Rs. 130/-. It has enabled consumers to reduce their NCF for availing similar number of channels as per 2017 framework, by an estimated cost varying Rs. 40/- to 50/-. Additionally, the amended NCF for multi-TV homes have enabled further savings to the tune of 60% on second (and more) television sets.

However, as per RIOs filed by the broadcasters, the new tariffs reflect a common trend i.e., the prices of their most popular channels including sports channels were enhanced beyond Rs. 20/-per month. Complying to the extent provisions, as regards the inclusion of pay channels in a bouquet, all such channels those are priced beyond Rs. 12/- per month are kept out of bouquet and are offered only on a-la-carte basis. The revised RIOs as filed indicate a wide-scale changes in composition of almost all the bouquets being offered.

Immediately after new tariffs were announced, TRAI received representations from Distribution Platform Operators (DPOs), Associations of Local Cable Operators (LCOs) and Consumer Organizations. DPOs highlighted difficulties likely to be faced by them in implementing new rates in the system and migrating the consumers to the new tariff regime through the informed exercise of options impacting almost all bouquets, especially due to upward revision in the rates of pay channels and bouquets declared by broadcasters. Therefore, TRAI engaged with all the different associations and consumer groups including representatives of LCOs.

To deliberate on the various issues related to implementation of New Regulatory Framework 2020 and suggest a way forward, a committee consisting of members from Indian Broadcasting & Digital Foundation (IBDF), All India Digital Cable Federation (AIDCF) & DTH Association was constituted under the aegis of TRAI.
The purpose of the Committee was to facilitate discussions among various stakeholders to come out on a common agreed path for smooth implementation of Tariff Amendment Order 2020. Stakeholders were advised to come out with an implementation plan with minimum disruptions and hassles to the consumers while implementing the New Regulatory Framework 2020.

The Committee listed several issues related to New Regulatory Framework 2020 for consideration. The stakeholders, however, requested TRAI to immediately address critical issues which could create impediments for smooth implementation of Tariff Amendment Order 2020.

Written comments on the consultation paper are invited from the stakeholders by 30th May 2022. Counter comments, if any, may be submitted by 6th June 2022.

Summary of Issues for Consultation

Q1. Should TRAI continue to prescribe a ceiling price of a channel for inclusion in a bouquet?

a. If yes, please provide the MRP of a television channel as a ceiling for inclusion in a bouquet. Please provide details of calculations and methodology followed to derive such ceiling price.

b. If no, what strategy should be adopted to ensure the transparency of prices for a consumer and safeguard the interest of consumer from perverse pricing? Please provide detailed reasoning/ justifications for your comment(s).

Q2. What steps should be taken to ensure that popular television channels remain accessible to the large segment of viewers. Should there be a ceiling on the MRP of pay channels? Please provide your answer with full justifications/reasons.

Q3. Should there be ceiling on the discount on sum of a-la-carte prices of channels forming part of bouquets while fixing MRP of bouquets by broadcasters? If so, what should be appropriate methodology to work out the permissible ceiling on discount? What should be value of such ceiling? Please provide your comments with justifications.

Q4. Please provide your comments on following points with justifications and details:

a. Should channel prices in bouquet be homogeneous? If yes, what should be an appropriate criteria for ensuring homogeneity in pricing the channels to be part of same bouquet?

b. If no, what measures should be taken to ensure an effective a-lacarte choice which can be made available to consumers without being susceptible to perverse pricing of bouquets?

c. Should the maximum retail price of an a-la-carte pay channel forming bouquet be capped with reference to average prices of all pay channels forming the same bouquet? If so, what should be the relationship between capped maximum price of an a-la-carte channel forming the bouquet and average price of all the pay channels in that bouquet? Or else, suggest any other methodology by which relationship between the two can be established and consumer choice is not distorted.

Q5. Should any other condition be prescribed for ensuring that a bouquet contains channels with homogeneous prices? Please provide your comments with justifications.

Q6. Should there be any discount, in addition to distribution fee, on MRP of a-la-carte channels and bouquets of channels to be provided by broadcasters to DPOs? If yes, what should be the amount and terms & conditions for providing such discount? Please provide your comments with justifications. Q7. Stakeholders may provide their comments with full details and justification on any other matter related to the issues raised in present consultation.

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