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Category: TRAI

  • Trai issues amendments to the regulatory framework for broadcasting and cable services

    Trai issues amendments to the regulatory framework for broadcasting and cable services

    Mumbai: The Telecom Regulatory Authority of India (Trai) on Tuesday issued the telecommunication services tariff order, 2022 and the telecommunication services interconnection regulations, 2022.

    In consonance with the complete digitisation of the cable TV sector, Trai on 3 March 2017 notified the new regulatory framework for broadcasting and cable services. After passing legal scrutiny in Madras High Court and Supreme Court, the new framework came into effect from 29 December 2018.

    As the new regulatory framework changed quite a few business rules, many positives emerged. However, upon implementation of the new regulatory framework 2017, Trai noticed some inadequacies impacting the consumers. To address certain issues that arose after implementation of the new regulatory framework, after a due consultation process with stakeholders, Trai on 1 January 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 High Court of Bombay and Kerala. The court upheld the validity of the new regulatory framework 2020 except for a few 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 a 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 has enabled further savings to the consumers to the tune of 60 per cent on second (and more) television sets.

    However, as per RIOs filed by the broadcasters in November 2021, the new tariffs reflected a common trend i.e., the prices of their most popular channels including sports channels were enhanced beyond Rs 19 per month. Complying to the extent provisions, as regards the inclusion of pay channels in a bouquet, all such channels that are priced beyond Rs 12 per month are kept out of the 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 organisations. 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 the 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.

    In order to address the issues as identified by the stakeholders’ committee; Trai issued a consultation paper for seeking stakeholders’ comments on points/issues which are pending for full implementation of the new regulatory framework 2020. The consultation paper sought comments and suggestions from various stakeholders, on 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.

    The authority analysed the comments of the stakeholders and to protect the interests of consumers has notified the amendments to tariff order 2017 and interconnection regulations 2017. The main features of the amendments are as follows:

    a.    Continuance of forbearance on MRP of TV channels

    b.    Only those channels which are having MRP of Rs 19 or less will be permitted to be part of a bouquet.

    c.    A broadcaster can offer a maximum discount of 45 per cent while pricing its bouquet of pay channels over the sum of MRPs of all of the pay channels in that bouquet.

     d.   Discount offered as an incentive by a broadcaster on the maximum retail price of a pay channel shall be based on combined subscription of that channel both in a-la-carte as well as in bouquets.

    All the broadcasters shall report to the authority, any change in name, nature, language, MRP per month of channels, and composition and MRP of bouquets of channels, by 16 December 2022, and simultaneously publish such information on their websites. The broadcasters who have already submitted their RIOs in compliance with the new regulatory framework 2020 may also revise their RIOs by 16 December 2022.

    All the distributors of television channels shall report to the authority, DRP of pay channels and bouquets of pay channels, and composition of bouquets of pay and FTA channels, by 1 January 2023, and simultaneously publish such information on their websites. DPOs who have already submitted their RIOs in compliance with the new regulatory framework 2020 may also revise their RIOs by 1 January 2023.

    All the distributors of television channels shall ensure that services to the subscribers, with effect from 1 February 2023, are provided as per the bouquets or channels opted by them.

    Trai in the present amendments, addressed only those critical issues which were suggested by the stakeholders’ committee to avoid inconvenience to consumers while implementing the tariff amendment order 2020. The stakeholders’ committee also listed other issues for subsequent consideration by Trai. In addition, the authority held multiple meetings with representatives of LCOs including an online meeting which was attended by more than 200 LCOs from across the country. Several issues were put forward during these meetings. Trai has noted the suggestions and may take further suitable measures to address the ensuing issues, if the situation warrants.

  • Trai has to play a balancing role: advisor of broadcasting & TCSR DG Anil Bhardwaj

    Trai has to play a balancing role: advisor of broadcasting & TCSR DG Anil Bhardwaj

    Mumbai: In an interaction with independent consultant Anuj Gandhi at Ficci Frames Fasttrack 2022, Trai advisor (broadcasting) and TCSR DG Anil Bhardwaj said that the regulator has to play a balancing role. He compared it to making a decision about what to do with a screw. One either loosens or tightens it, he said.

    In addition, he also mentions that a consultation process is going on regarding NTO 2.0. One side wants everything controlled, while the other does not want the regulator to control anything at all. The industry, he said, needs a regulator because they cannot sort out their issues. The aim is to have as light a touch of regulation as possible. That is Trai’s ethos.

    While saying that Trai has done some good things, he admitted that some bad things may have been done. But Trai is willing to review, consult, and come back. He also noted that while content is king, distribution remains extremely important. For the linear TV ecosystem to sustain, the stakeholders have to nurture and support each other. There are 1,00,000 LCOs in the country. Each has two to three people on the ground. That is the kind of distribution power available. “Ignore them at your own peril. Everybody is at a crossroads with everybody else. A linear TV channel needs a content creator, an aggregator, or a broadcaster. You need an integrator and then the last mile operators. If someone is dying and someone else is making money as a result, ultimately, who will suffer? Linear will be dead if one arm starts killing the other. Linear TV will grow if people are willing to nurture and sustain each other,” he noted.

    He said that regulation does not put a cap on pricing. One can charge Rs 100 for a channel. What he is against is the mirage of pricing that happens with bundling. That results in consumers being misled, which is what Trai is completely against. Certain channels, he said, are sold at Rs 6 through reverse deals and have fixed the MRP (maximum retail price) at Rs 19. Privately, he has asked them why this is being done. As a regulator, data is obtained and almost everything comes to Trai. The reason given is that the channel level will go down if it is not priced at that rate. “This is the mentality of the distribution head of one of the largest broadcasters in our country. In that situation, you need a regulator. We have not asked a niche English channel not to price themselves at Rs 50 or Rs 100. They have shut down because they could not sustain their model. They were showing ads and they also wanted to charge a certain fee. Previously, this was being driven through deals done with the distributor, which today is not possible because there is transparency in the system. For bundling, we said a mirage of price was created. So we will have some semblance. We tried Rs 19. We thought of Rs 12. The purpose is not to tell the industry what to fix. It is to avoid misleading the consumer. We are again reviewing that in the consultation. We have kept postponing the implementation of NTO 2.0 till we are through with this consultation process. We want to know if the price of Rs 12 is okay or not.”

    He further said, “We have done certain good things. Maybe we have done some bad things. That is why nothing is cast in stone. We are willing to come back and consult. We are willing to forego regulation provided the market matures. If we reduce or remove regulation, we will find that the market is not functioning as it should.” He noted that in the current consultation, one side says control everything and the other side says do not control anything. One side desires a minimum level of assurance regarding distribution effort. So a balancing role has to be played by Trai. The market is not mature. There are issues, he noted, with broadcasting, with channels shutting down. He also noted that channels are sometimes shut down by distribution as a certain show or content might cause a problem for some people. “This is the kind of country that we live in.”

    He said that as a regulator, Trai has to act strongly, but it cannot be done tomorrow or people will complain of high-handedness. The market has to mature to a level where certain things are known and numbers and facts are known. He gave the example of hundreds of MSOs getting audits done themselves by one of the 52 auditors chosen by Trai. That is, until you reach a certain place. “Without distribution, no ecosystem can survive.” On the content front, he said that Arpu is Rs 273. The ecosystem decides this, not the regulator. “If the industry is dying, please raise prices. Content is king, which is why digital media is paying five times more for content production compared to linear broadcast. So, if broadcasters need more revenue for content investment, then please review your models. Trai has never said not to invest in content. Broadcasters should make models in such a way that the money invested comes back. We will not stop you. Please make good content.”

    He added that numbers for the broadcasting industry are coming down, which could be due to a combination of factors, including OTT, DD Freedish, and Covid. Today, there are 900 or so TV channels. There are 1,000 odd MSOs. DTH is 70 million homes, and cable is not at 70 million. The balance is DD Freedish, which is growing. “Linear TV is finding its own new paradigm, new place. The punch is with OTT. It is important to understand why. Content is king, but distribution remains extremely important,” he said.

    He stated that some consumers believe that content is better on digital or OTT apps. That is why some have cut the cord. A broadcaster should allow a user to have five screens at the same cost or at a much lower cost than what is charged for linear TV. Then users will not go elsewhere. There are millions of smart connected TVs today.

    He also noted that India is unique in many ways. He gave the example of the mandatory content sharing bill for events of national importance. That applies to some sports events, even if the acquisition price is high. The aim is to have the events seen by the masses, and it goes beyond the ambit of commercial deals done. This is something that the Supreme Court has agreed with. “We are a very different country. It is an evolution. I am not saying that we are 100 per cent correct or that the US is correct,” he concluded.

  • 5G auctions likely in May

    5G auctions likely in May

    Mumbai: 5G spectrum auction in India is expected to be held in May this year subject to the Telecom Regulatory Authority of India (Trai) submitting its final recommendations on various aspects of the sale process by March, said a senior official of the telecom department.

    Trai is expected to respond to DoTs request for recommendations on modalities such as reserve price, band plan, block size, and quantum of spectrum to be auctioned by next month, following which the department will initiate the auction.

    “Trai has indicated that they will send it (recommendations) by March. Thereafter, it will take us a month to make a decision around it,” Telecom secretary K Rajaraman told PTI.

    Rajaraman also informed that the DoT has already selected MSTC as the auctioneer for the upcoming auction.

    Meanwhile, the telecom regulator has asked telecom and satcom companies to submit any additional comments before 15 February, especially with details around methods for valuation of the spectrum. While both stakeholders have argued for a steep cut in the band price, they remain divided on other aspects including the auction of a high-frequency range of 27.5- 28.5 GHz.

  • Trai to form committee for smooth rollout of NTO 2.0

    Trai to form committee for smooth rollout of NTO 2.0

    Mumbai: The Telecom Regulatory Authority of India (Trai) has decided to form a committee with representation from leading pay TV industry associations to ensure the smooth implementation of the New Regulatory Framework 2020 and identify impediments with counter-measures for the overall growth of the broadcast sector.

    In a letter dated 22 December, accessed by Indiantelevision.com, Trai had asked the Indian Broadcasting and Digital Foundation (IBDF), the All India Digital Cable Federation (AIDCF), and the DTH association to nominate a maximum of two representatives to be part of the implementation committee.

    Early this November, the regulator had notified stakeholders that implementation of the new tariff order (NTO 2.0) would be delayed until 1 April 2022. This decision was taken after various stakeholders expressed concerns to the regulator with respect to the timeframe for migration of 150 million pay TV consumers and sufficient time for service providers to upgrade their IT systems and incorporate various channels/bouquets before offering the same to consumers.

    In the latest development, Delhi-based Cable Operators Welfare Federation (COWF) has written to Trai to be a part of the implementation committee and include two local cable operator (LCO) representatives from four zones or four representatives from the All India Federation. “LCOs deserve to be treated as frontline workers who touch base with each subscriber at least once a month. During the implementation of the regulatory framework the best way to reach the subscriber is to communicate in person, in their language, using printed handouts to evaluate options and help subscribers make a well-informed decision,” the letter reads.

    The LCOs also argue that market discovery of prices of pay-TV channels and consumption pattern evolution cannot be back-end driven, rather the front-end instructions should drive the backend. “The DPOs manage the back-end that would implement the service requests coming in from the front-end and therefore should not impose any packages and choices on subscribers,” it added.

    COWF has now also written to prime minister Narendra Modi to halt the implementation of new tariff framework, discard NTO 2.0, and consider making “cable-operator friendly amendments” in Digital Addressable Systems (DAS) law. The operators also suggest that linear TV channels no longer be distributed on OTT platforms. They lettered dated 29 November, also says that the NTO 2.0 regulation will increase unemployment and result in the downturn of lakhs of people employed by the cable TV industry.

  • Trai asks broadcasters, DPOs to comply with interconnection agreements regulations

    Trai asks broadcasters, DPOs to comply with interconnection agreements regulations

    Mumbai: The Telecom Regulatory Authority of India (Trai) has asked broadcasters and distributors of TV channels to immediately implement the provisions of the Telecommunication (Broadcasting and Cable) Services Register of Interconnection Agreements and all such other matters Regulations, 2019.

    The regulator has asked broadcasters and distributors to submit the compliance report within 15 days from the date of issue of the letter on 8 December failing which actions would be taken as per provisions of the said regulations and the Trai Act, 1997.

    The regulations were supposed to come into force on 2 January 2020 but were challenged by the All India Digital Cable Federation (AIDCF) in the Kerala high court. The high court in its order dated 9 January 2020 had ordered that no coercive action will be taken by the respondents.

    The court disposed of the said writ petition, in its judgement dated 12 July, and partially set aside the provisions of the said regulations to the extent they require registration of placement/marketing agreements. Thus, all the provisions of the said regulations, except to the extent they require registration of placement/marketing agreements, are in operation.

    The regulator had developed a B&CS integrated portal system (BIPS) for the purpose of filing data/details pertaining to the said regulations. The regulations require broadcasters and DPOs to furnish, via their compliance officer, its reference interconnection offers when the same is published on their websites.

    The regulations are applicable to all commercial and technical arrangements entered into by broadcasters, distributors of television channels and local cable operators for providing broadcasting services. If broadcasters and distributors default in complying with the provisions, then Trai would take action by imposing a financial disincentive.

  • Trai seeks suggestions to enhance ease of doing business in telecom and broadcasting sector

    Trai seeks suggestions to enhance ease of doing business in telecom and broadcasting sector

    New Delhi: The Telecom Regulatory Authority of India (Trai) has released a consultation paper on “Ease of Doing Business in Telecom and Broadcasting Sector”.

    The industry stakeholders can send their comments by 5 January 2022, and counter comments can be submitted by 19 January 2022.

    The regulatory body highlighted that the telecommunication and broadcasting sectors have emerged as key drivers of economic and social development and has made the country a favorite business destination amongst investors. According to Trai, both the sectors have immense potential to move on the higher trajectory of growth, “if business environment could be made more attractive by simplifying the existing provisions of policy frameworks in various ministries and departments including the ministry of information and broadcasting, department of telecommunications, ministry of electronics and information technology involved in issuing permission, registrations, and licenses to the players of the sector.”

    It said that the larger aim behind floating this consultation paper is to identify various concerns in the existing processes and suggest measures for the reforms required in the regulatory processes, policies, practices and procedures in the telecom and broadcasting sector for creating a conducive business environment in India.

    The consultation paper also seeks comments of the stakeholders on various issues and difficulties being faced by them in commencement and operation of their businesses in telecom and broadcasting sectors in the country.

    It also seeks suggestions on measures for making the existing processes simple, business friendly and creating an ecosystem for attracting more and more investment in the sectors. It also emphasises the single window concept for submitting applications and getting approvals from different agencies without running to each agency separately for its approval.

    Suggestions are also invited on simplifying the applications which have just the required details for the conduct of business and well-documented timelines with query response systems, having seamless integration with other ministries, etc. Apart from that, the stakeholders have also been requested to provide their comments on adoption of new technologies for all the issues raised in this consultation paper.

  • DoT permits laying of overhead fiber ahead of 5G roll out

    DoT permits laying of overhead fiber ahead of 5G roll out

    New Delhi: The Department of Telecommunications (DoT) has amended the Indian Telegraph Right of Way Rules (RoW), 2016 by way of a gazette notification permitting laying overhead optical fiber cable (OFC).

    This will be applicable to all digital infrastructure (including Digital CATV & Broadband distribution).

    Optical Fiber is a fundamental and structural part of both mobile and fixed broadband networks. Faster rollout of fiber is important for backhauling a large amount of data at high throughput, improving reliability, and reducing latency. The decision paves way for creating the necessary infrastructure to cater to forthcoming 5G rollouts in the country.

    “These amendments will ease RoW-related permission procedures for establishment and augmentation of digital communications infrastructure across the country,” a statement issued by the DoT said. “To achieve the objective of universal broadband connectivity at 50 Mbps to every citizen, fiberisation of telecommunication networks is essential.”

    The amendment prescribes a one-time compensation of Rs 1,000 per kilometer for laying overhead OFC, which will bring further uniformity in charging of fee/ levy by local authorities for grant of permissions for this critical infrastructure.

    Digital Infrastructure Providers Association (DIPA) director-general T R Dua told IANS, ” We are sure this is just the beginning and this amendment will pave the way for other major reforms in line, encouraging investments and faster deployment of critical broadband infrastructure in the country enabling rollout of 5G and various new technologies.

  • Trai vs broadcasters: Impact could be larger than expected

    Trai vs broadcasters: Impact could be larger than expected

    Mumbai: The TV industry is eagerly awaiting the outcome of the court battle between the Telecom Regulatory Authority of India (Trai) and TV broadcasters led by the Indian Broadcasting Foundation (IBF) on the new tariff order (NTO) 2.0 case that will be heard on 30 November.

    The decision taken by the Supreme Court in the final hearing will significantly alter the dynamics of the TV broadcast industry that have been in place for more than a decade. The conflict essentially from Trai’s point of view is the fight for consumer’s choice that is being taken away by broadcasters.

    There are 346 pay-TV channels available to consumers, out of which leading broadcasters own and operate 255 pay channels. It’s standard industry practice to offer their pay channels in a bouquet that has a significant discount. This way the broadcasters can cross-subsidise their channels in a way that even a weak channel has an opportunity to get viewership.

    There are driver channels whose viewership is self-driven and niche channels that have a small but dedicated viewership. Trai’s contention is that broadcasters are pushing these ‘extra’ channels on to consumers to increase their revenues from advertising which accounts for two-thirds of their overall revenues.

    A senior expert in the broadcasting industry remarked that this view of Trai does not consider the complexities of the sector and understand what the broadcast consumer wants. “India is a price-sensitive market – we want everything to be free or at the cheapest but, at the same time, the best-in-class service,” he said requesting anonymity.

    There’s always going to be content on TV that the consumer doesn’t want to watch. On linear TV if the consumer wants to watch different content, he/she may switch the channel and watch something else. That’s why it makes sense for the consumer to have the option of multiple channels available.

    With the agenda of allowing consumers to pay only for the channels that they want, Trai mandated that broadcasters announce a-la-carte tariffs of their channels. To ensure that broadcasters do not entice consumers into opting for bouquets that are heavily discounted it created provisions in the amendment order to counter the practice. It mandated that a channel must have MRP no greater than Rs 12 to be included in a bouquet. It also prescribed a linkage between the a-la-carte price and bouquet by mandating that the sum of the a-la-carte price of channels in a bouquet will not be more than 1.5 times the bouquet price.

    Whatever consequence Trai had intended, the outcome of the NTO 2.0 has been very different. While the case is being fought in the SC, on 15 October broadcasters announced their reference interconnection offers (RIOs) and new channel rates adhering to the regulator’s order. If the consumer chooses to keep the same number of channels, then his/her content costs are likely to go up when the new tariffs come into effect on 1 December. They have listed the MRP price of their popular channels greater than Rs 12 which means that none of these channels will be a part of the broadcaster’s bouquets.

    There isn’t enough data to predict the resulting consumer behaviour after the implementation of the amendment order. The only example of a-la-carte implementation is the conditional access system (CAS) in 2007. CAS is a digital mode of transmission of TV channels via set-top-box (STB) and was rolled out in select metros – Mumbai, Delhi, Kolkata, and Chennai.

    “When CAS was implemented on a small population the consumer had opted for about 5-15 pay channels,” said a senior official from a leading cable operator on condition of anonymity.

    Note that this was a period when Star India was offering about eight channels versus 76 it is offering today. “Back then you had to offer every channel a-la-carte and Trai had fixed a ceiling price for pay channels at Rs 5,” he added.

    NTO 2.0 implementation will have an impact on a much larger scale. There is a huge economic divide between TV viewing audiences in India. As the official from the cable company puts it, “On the one hand, you have a consumer who decides to be economical and only watch FTA channels. We estimate that there are 30-50 million audiences who only watch Doordarshan on DD Free Dish. On the other hand, you have consumers who are ready to pay Rs 2, 000 to get an OTT subscription including Netflix, Prime Video, Disney+ Hotstar, SonyLIV, ZEE5, and Voot and they will have access to all their TV content as well. The rest of the consumers fall in between these two extremes.”

    So, what will be the consequence of broadcasters pulling their MRP channels out of the bouquet? “Personally, I have yet to see a car (niche channels) run without an engine (driver channels)” said the cable operator spokesperson. “Till date, driver channels have taken other channels to the same viewership level.”

    According to Trai, broadcasters are exploiting the freedom afforded to them by the NTO 2.0 provisions for a-la-carte pricing and have arbitrarily hiked the prices of their channels and that the new tariffs do not reflect consumer demand. The Tamil Nadu Digital Cable TV Operators Association has gone as far as to send a legal notice to Trai demanding that it intervene and ask broadcasters to reduce channel prices. It claimed that the new tariffs may inflate consumer bills by 100-200 per cent.

    “The distributed platform operators (DPOs) have begrudged broadcasters who are not only able to launch more channels, but they also get advertisement revenue. This has led to a corporate rivalry where unfortunately Trai has lent an ear to DPOs without understanding what’s best for the consumer and the larger creative ecosystem,” said an expert from the broadcast business.

    “The success of over-the-top platforms proves that without an overzealous regulator and fragmented/unruly intermediary, the content creators are able to know the pulse of their audience and cater to their needs and tastes. Additionally, content and carriage are neatly differentiated with transparency and accountability,” he added.

    OTT platforms have a mix of blockbuster and long-tail content that they offer to consumers. Most consumers come to OTT platforms to watch their blockbuster content, and some may also enjoy their longtail content. The OTT player can continue making enormous investments in fresh content because of the steady monthly subscription fee that it charges the viewer.

    It’s clear that the implementation of the NTO 2.0 based on the tariffs announced by leading broadcasters will essentially increase content costs for the consumer. The consumer must either opt for fewer channels to keep TV bills at the same levels or pay a higher cost in subscriptions. Trai has said that it will keep an eye on the industry and ensure that consumer bills do not go up. 

  • TRAI designates Telecom Engineering Centre as testing agency for CAS

    TRAI designates Telecom Engineering Centre as testing agency for CAS

    New Delhi : The Telecom Regulatory Authority of India (TRAI) has designated Telecom Engineering Centre, Department of Telecommunications as a testing and certification agency for Conditional Access Systems (CAS) and Subscriber Management Systems (SMS) of broadcast and Cable TV services.

    TEC will carry out the overall administration, execution and co-ordination of testing of CAS and SMS according to the Interconnection Regulators, 2017. It will also notify and maintain Test Schedules and Test Procedures (TSTP) as well as empanel and declare the final list of accredited testing laboratories that fulfill the requirements for carrying out the testing.

    The Centre will also provide certification for all products tested and certified by the accredited testing laboratories, and maintain the version and deployment details of CAS and SMS deployed in India, said the regulatory body.

    The decision was taken following several complaints from broadcasters and distribution platform operators regarding unauthorised distribution of their signals, much of which occurs due to the deployment of CAS or SMS that do not comply with security protocols.

    Sub-standard CAS and SMS also render the distribution network vulnerable to hacking and content piracy.

  • Twin conditions ensure broadcasters do not engage in ‘perverse’ pricing: TRAI

    Twin conditions ensure broadcasters do not engage in ‘perverse’ pricing: TRAI

    Mumbai: The twin conditions introduced in the New Tariff Order (NTO) 2.0 seek to ensure that broadcasters do not engage in “perverse pricing”; that consumers do not get a raw deal; and that choices offered by and to all market participants remain real. Both conditions are important in their own ways, observed Telecom Regulatory Authority of India (TRAI).

    The regulator made these statements in its counter-affidavit submitted to the Supreme Court quashing the writ petitions by the Indian Broadcasting Foundation (IBF) and other broadcasters to halt the implementation of NTO 2.0.

    The twin conditions introduced in the NTO 2.0 seek to discourage unfair bundling, stated TRAI. The first condition prescribes that the aggregate a-la-carte (MRP) prices of channels in a bouquet must not be more than 1.5 times the bouquet price, hereafter referred to as the “Aggregate Test”. So, if a bouquet has five channels A, B, C, D, and E (with their individual a-la-carte) and a bouquet price of X, the total/aggregate of A+B+C+D+E should not be more than 1.5 times X.

    The second condition, which alone has been struck down by the Bombay high court judgement, states that the MRP of any individual channel in a bouquet, i.e., its a-la-carte price, should not exceed three times the average MRP of a pay channel in that bouquet, hereafter referred to as the “Average Test”.

    TRAI alleges that broadcasters want to maximize their advertising revenue and hence are bundling their popular channels along with less popular channels to claim higher subscription and advertising revenues. The high-demand channels that do not need to be pushed, henceforth called driver channels, are bundled with those channels in which consumers otherwise have no interest.

    “In a large number of cases bouquet prices are the same as the a-la-carte price of the driver/popular channel. In many cases, the bouquet price artificially has reached such perversity that the bouquet price is cheaper than the driver channel in it,” observed TRAI.

    This perverse pricing compels the consumer to pick a bouquet over a-la-carte channel not by choice but out of compulsion, it alleged. 

    In a prior hearing, SC expressed three concerns with NTO 2.0 order: a) Whether the “Average Test” in the twin conditions formed a part of the pre-consultation process b) Are broadcasters and DPOs being treated equally c) Is “Average Test” severable from “Aggregate Test”.

    Referring to a) TRAI responded, “Both twin conditions were fully deliberated on prior to making of the 2020 framework. There is ample correspondence between TRAI and the broadcasters concerning the implementation of the twin conditions. Even the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has found broadcasters to be in violation of such twin conditions prescribed by TRAI in the past, and held that all reference interconnect offers had to be in consonance with those conditions.”

    TRAI denied discriminating between broadcasters and DPOs stating that there are exhaustive notes on the subject matter that point to the contrary.

    Referring to c) TRAI responded, “The 2020 framework seeks to address two major issues arising out of the formation of the bouquet by broadcasters. The first concerned heavy discounting of bouquet prices, and the second related to ‘pushing’ of unwanted channels to consumers.”

    “TRAI is duty-bound to resolve both issues, in order to safeguard the interest of all service providers and consumers,” it said. 

    The next hearing will be held on Tuesday 7 September.