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Govt to come out with cable monopoly guidelines: I&B minister

MUMBAI: With the inter-ministerial committee having endorsed the Telecom Regulatory Authority of India’s (TRAI’s) recommendations on ‘Monopoly/ Market Dominance in Cable TV Services’, the stage is set for the government to come out with guidelines on cable monopoly, said Information and Broadcasting (I&B) minister Manish Tewari.

manish-resizedAddressing the closing ceremony of the National Consultation on Women & Media in the capital, Tewari said that the government was in the process of issuing guidelines that would keep a check on cable monopolies that have cropped up in many states.

“We initiated a consultation process through TRAI. We got their recommendations. The inter-ministerial committee has accepted those recommendations and we are in the process of issuing guidelines which will ensure that no single entity has monopoly insofar as distribution of electronic media content is concerned,” Tewari stated.

Tewari also said that the cable monopoly guidelines would ensure diversity and pluralism in news giving the consumer more choices.

He noted that the menace of cable monopoly had resulted from the absence of a regulatory framework at the time of the inception of the sector.

“If content is king, distribution is god in the electronic media business. Unfortunately, distribution in most Indian states has been controlled either through surrogate political ownership or by monopoly interests,” he stated.

In its consultation paper, the authority noted the existence of monopoly in Tamil Nadu (state-owned Arasu Cable TV), Punjab (Fastway Transmission), Orissa (Ortel) and Kerala (Asianet Satellite Communications).

These monopolies, according to TRAI, could have serious implications for competition, pricing, quality of service, and above all, for the healthy growth of the cable TV sector.

On 26 November, the authority had issued comprehensive recommendations that prevented a multi-system operator (MSO) from having more than 50 per cent market share in any state.

An MSO holding more than 50 per cent market share in a state would be required to bring down its excess holding within a period of 12 months, the authority had stated.

The authority had also recommended that any M&A among MSOs or between an MSO and an LCO in a relevant market would require prior approval of the regulator.

Any arrangement that results in ‘control’ of MSO(s)/LCO(s) in a relevant market by an entity should require the prior approval of the regulator. The decision on any proposal, complete in all aspects, would have to be conveyed within 90 working days, the authority had said.

A single-entity MSO, which has an existing market share of more than 50 per cent in a state, however, would not need to cut down on its majority control. But it would not be permitted to merge or acquire the control of any other MSO or local cable operator (LCO) in that market.

TRAI had also suggested that the state should be considered as the relevant market for assessing monopoly/market dominance of MSOs in the TV channel distribution market. The percentage of share should include only the cable TV market in that state.

The market dominance would be determined based on market share in terms of the number of active subscribers of MSOs in the relevant market.

For measuring the level of competition or market concentration in a relevant market, the Herfindahl-Hirschman Index (HHI) should be used.

According to TRAI, the HHI, which is calculated based on the market shares of different firms operating in the relevant market, reflects both the distribution of the market shares of the top firms and the composition of the market outside the top firms.

The TRAI had also warned that it would closely monitor its must-carry provisions and quality of service (QoS) for any anti-competitive practices.