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MSOs not required to have 500-channel headends: TDSAT

MUMBAI: The TDSAT has set aside a clause in the Telecommunication (Broadcasting and Cable Services) Interconnection (Digital Addressable Cable Television Systems) Regulations, 2012 that requires multi-system operators (MSOs) to have head-ends with a carrying capacity of 500 channels.

Providing a breather to the MSOs, the Telecom Disputes Settlement and Appellate Tribune (TDSAT) said that there was no need to regulate the carrying capacity if “market forces play an important and significant role” on the same.

The TDSAT pointed out that having a channel carrying capacity of 500 channels may be relevant in metro cities or ten million plus cities where the subscribers may have a wide ranged choice. However, it won’t serve any purpose in rural or semi-urban areas.

“There is, in our opinion, absolutely no reason as to why the metros and the rural areas would be treated equally,” the TDSAT said, before giving its verdict on a petition filed by MSOs Digicable and IndusInd Media & Communications Ltd (IMCL) challenging the Telecom Regulatory of India’s (TRAI) channel capacity regulation.

The tribunal also stated that no such restriction has been placed on DTH operators with whom the MSOs compete.

“The respondent (TRAI), on the one hand, cannot say that market shall take care of the situation and at the same time issue a mandate that the capacity of the head-end of the MSOs throughout the country should be to carry 500 channels,” the tribunal added.

However, TRAI may consider making provisions for MSOs to have a carrying capacity to carry number of channels based on different categories of area in which the MSO is operating, the TDSAT said.

The MSOs contended that there is no reason why they have to maintain a head-end of 500 channels when they are required to carry only 100 free-to-air (FTA) channels. They accused the TRAI of arbitrarily bringing in this provision.

TRAI counsel Meet Malhotra clarified before the tribunal that the MSOs are only required to maintain a head-end of 500 channels rather than mandatorily carrying 500 channels on their network.

The MSOs pointed out that maintaining a head-end capacity of 500 channels would entail an initial investment of Rs 180 million. However, TRAI counsel Saket Singh refuted MSOs’ claim by saying that the initial investment in setting up a headend with a capacity to carry 500 channels would only be Rs 51.35 million under different heads. The TRAI counsel quoted from a letter issued by IMCL.

Malhotra contended that the cable operators with a capacity of 500 channels would have an advantage over Direct-to-home (DTH) operators, who have a carrying capacity of 300 channels. Analogue cable currently has a carrying capacity of only 80-90 channels.

As per the interconnection regulation issued by TRAI on 30 April 2012, every MSO operating in Mumbai, Delhi, Kolkata, and Chennai (the first Phase digitised cities) shall have a minimum carrying capacity of 200 channels as on 30 June 2012, the deadline for Phase I of digitisation. The channel carrying capacity had to be enhanced to a minimum of 500 channels by 1 January 2013.

However, those MSOs having a subscriber base of less than 25,000 will have time till 1 April 2013 to increase their carrying capacity to 500 channels.

The TRAI’s logic behind having a mandatory 500 channel carrying capacity for MSOs is that the Information and Broadcasting ministry has already granted permission to 831 channels under uplinking/downlinking guidelines, as on 6 March 2012.

With more channels likely to get operational by 1 January 2013, it is only logical that maximum number of channels that may be required to be carried in a digital addressable cable TV system network be 500 channels per headend.

An analysis of the operational channels shows that the maximum number of channels relevant to a state or Union territory, language-wise, is 473 (in Andhra Pradesh) out of the 650 operational private channels (as on April, 2012).

Besides, there are 18 channels of the Prasar Bharati and one Lok Sabha channel (in total 19 channels) that may also be relevant for all the states and the UTs to cater to the infotainment requirements of minority populace of these States and UTs.