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Broadcasters can’t provide TV service directly to commercial subscribers: TRAI

MUMBAI: The Telecom Regulatory Authority of India (TRAI) has said that commercial subscribers cannot obtain television service from broadcasters directly and have to do so only from a distribution platform like cable TV, direct-to-home (DTH), headend-in-the sky (HITS), or internet protocol television (IPTV).

As per the amended tariff order pertaining to commercial subscribers notified by TRAI, commercial establishments that do not charge its customers for providing television programmes are to be treated like ordinary subscribers and should be charged on per-television basis.

However, in cases where commercial subscribers specifically charge their customers for providing television programmes, the tariff would be as mutually agreed between the broadcaster and the commercial subscriber.

It is expected that with the coming into force of these changes in the regulatory framework, the distribution of TV services to the commercial subscribers would be streamlined and the services would be available to them at competitive rates.

The authority had initiated a consultation process on the issue of tariff for commercial subscribers following a go-ahead from the Supreme Court. TRAI had issued a consultation paper (CP) on 11 June seeking comments/views of the stakeholders.

The CP discussed and raised related issues pertaining to various alternatives for tariff stipulations for commercial subscribers, the manner of offering of TV services to them, the definition of ‘commercial establishment’, ‘shop’ and ‘commercial subscriber’, and sub-categorisation of the commercial subscribers into similarly placed groups.

In response to the CP, 24 stakeholders submitted their views/comments to the authority. Subsequently, to further discuss the issues involved, an open house discussion (OHD) was also held at Delhi on 4 July, wherein 59 stakeholders participated in the discussions.

Definition of commercial subscriber

TRAI said that the definition of commercial subscriber has been amended and brought in line with the tariff prescription and the manner of offering of television services to the commercial subscribers.

The authority has defined ‘commercial subscriber’ as any person, other than a multi-system operator (MSO) or a cable operator, who receives broadcasting service at a place indicated by him and uses such signals for the benefit of his clients, customers, members, or any other class or group of persons having access to its commercial establishment.

Tariff for commercial subscribers

The authority said that the end consumer, whether at his home or at any commercial establishment, gets to view the same content with the same quality of signals. In both cases, the cost to the content owner (broadcaster) and the DPO, for supplying the signals, per se, does not vary based on where the signals are supplied.

Citing a Supreme Court judgment, the authority said that a TV service in a commercial establishment is only incidental to the service that the commercial establishment is providing to its clients. It cannot be construed as re-distribution or re-sale of TV services. In any case, there is no re-transmission.

However, in case the commercial establishment specifically charges its customers extra for viewing channels on its premises, there is a case for broadcasters to have a share in such revenue of the commercial establishment, the TRAI stated.

Therefore, where the commercial establishment is earning extra revenue from its clients specifically on account of providing TV services, the rates should be based on mutual negotiations between the broadcaster and the commercial subscriber, it added.

In such cases also, the commercial subscriber would be required to obtain signals of TV channels through a DPO/cable operator only.

In the CP, the authority had prescribed the following four alternatives for prescribing tariff for commercial subscribers.

(i) The tariff for commercial subscribers is the same as that for ordinary subscribers. (ii) The tariff for commercial subscribers has a connection with the tariff for ordinary subscribers. (iii) The tariff for commercial subscribers has no connection with the tariff for ordinary subscribers, but there are some protective measures prescribed to protect all the stakeholders such as mandatory a la carte offering, conditions to prevent perverse a la carte pricing vis-à-vis bouquet rates, etc. (iv)

The tariff for commercial subscribers is kept under total forbearance.

Manner of offering TV channels to the commercial subscribers

The authority said it has not allowed broadcaster to supply signals directly to subscribers, including commercial subscribers, since the guideline for downlinking of TV channels in India provide that TV channel signal reception decoders can only be provided to registered DPOs.

Broadcasters, the authority stated, should supply their signals through a DPO. According to the authority, this would also ensure competition in the market if a commercial subscriber can obtain TV signals from any MSO or its linked local cable operator/DTH operator operating in his area.

The authority had discussed three models of offering of TV channels to commercial subscribers in the CP. The first model envisaged that the commercial subscriber enters into an agreement with the broadcaster and obtains signals either from the broadcaster itself or a DPO designated by the broadcaster.

In the second model, the commercial subscriber is to enter into an agreement with the DPO and obtain the signals while the DPO and broadcasters have their own mutually agreed arrangements. The third model discussed in the CP is a combination of the first and second models.

Sub-categorisation of commercial subscribers

In view of the tariff prescription and the provisions regarding the manner of offering of TV signals to the commercial subscribers, the authority maintained that there is no need for sub-categorisation of the commercial subscribers into similarly placed groups for the purpose of prescription of tariff dispensation for commercial subscribers.

The only distinction required is to place the commercial subscribers into two broad classes—(i) those who offer television services/programmes as part of amenities to their guests and (ii) those who charge for the same.

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Broadcasters see red in TRAI’s new tariff order for commercial subs; MSOs & DTH ops happy