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TRAI notifies ‘twin conditions’ for retail pricing of TV channels

MUMBAI: With the objective of making a la carte pricing more affordable, the Telecom Regulatory Authority of India (TRAI) has notified the ‘twin conditions’ for retail pricing of TV channels that seeks to link the a la carte rates of TV channels with bouquet rates.

The conditions state that (a) the a-la-carte rate of a pay channel forming part of a bouquet shall not exceed two times its RIO rate offered by the broadcaster for addressable systems; and (b) sum of a la carte rates of all the channels in the bouquet shall not exceed three times the bouquet rate.

This amendment will come into effect on 1 April 2016, providing enough time to platform operators to carry out such changes in the a la carte rates of channels or composition of the bouquets.

Each platform operator will be required to specify a la carte rates of all the pay and free-to-air (FTA) channels provided on its platform. Such a la carte rates will be valid for that platform operator across all the bouquets offered by him. Each bouquet rates will have to fulfil the twin conditions based on published a la carte rates of channels.

TRAI said that the condition (a) in the twin conditions will provide flexibility to operators to package the channels as per their business plan while, at the same time, the restriction prescribed through the linkage ensures that the a la carte prices are not rendered illusionary to the consumers.

Similarly, the condition (b) prescribes ensuring that whenever the bouquet rates are reduced, the a la carte rates of channels are also proportionately reduced, enabling effective choice to the consumer in the form of a la carte rates of channels.

It has also mandated that platform operators in no case give a discount of more than 66.66 per cent over the sum of a la carte rates of channels in the bouquet.

Any discount of more than 66.66 per cent in forming the bouquet rates clearly indicates that the a la carte rates have been fixed at an unreasonably high price, TRAI stated.

In case, a platform operator reduces the a la carte rates of some channels to form a bouquet, the revised rates must be considered to satisfy the twin conditions in all such bouquets where such channels form part of the bouquet.

Since many stakeholders are of the view that deriving the ascribed value is too complicated and difficult to implement on the ground, the authority has prescribed a simplified provision in this tariff order that does away with the need to arrive at an ascribed value while maintaining the basic relationship between a la carte rates and the bouquet rates.

TRAI has decided to maintain forbearance on HD channel rates. Hence, the operators are free to offer such channels only in a la carte or as a separate bouquet, in case their business model does not support offering such channels as part of the same bouquet having both SD and HD channels.

Regarding comments of DTH operators that broadcasters force them to offer maximum numbers of channels in their entry package, the authority said that if any broadcaster insists platform operators to include any channel/channels, or bouquet/bouquets, then it will amount to a violation of TRAI’s interconnection regulations and such broadcasters will be subjected to penalty as per the TRAI Act.

Further, any platform operator who accedes to any such force inclusion by the broadcaster also violates the regulations framed under TRAI Act.

Therefore, the concern of DTH operators that broadcasters force them to offer maximum numbers of channels in a given bouquet is not tenable, TRAI noted.

The stakeholders’ concerns regarding restrictions on change in the price or composition of subscribed channels during the first six months from the date of enrolment have also been addressed in this order as the provisions of the Standards of Quality of Service (Digital Addressable Cable TV Systems) Regulations, 2012 (12 of 2012) and the Direct to Home Broadcasting Services (Standards of Quality of Service and Redressal of Grievances) Regulations, 2007 (8 of 2007) will supersede this tariff order.

TRAI had issued the draft tariff order on 30 September 2015 for consultation after its earlier tariff order was challenged in the Telecom Disputes Settlement & Appellate Tribunal (TDSAT). The authority had submitted before the tribunal that it was willing to consider the grievances of the petitioners.

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