23 Nov 2017
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Stakeholders suggest TRAI amend draft model and standard interconnect agreements

MUMBAI: Multi-system operators (MSOs), local cable operators (LCOs) and broadcasters have suggested some amendments to the Telecom Regulatory Authority of India’s (TRAI) draft model and standard interconnection agreements.

The stakeholders have different views on the time duration for termination of interconnect contract, TV signal piracy and migration of LCOs to any distributor of signals.

Termination of contract

To begin with, the All India Digital Cable Federation (AIDCF) has suggested the authority amend Clause 3.1 of the proposed draft to provide 51 days’ time to the parties to terminate the contract, which includes 30 days to cure the breach of agreement. In case it cannot be cured, either party will send a 21 days’ termination notice after the expiry of 30 days.

The Indian Broadcasting Foundation (IBF) has argued that providing 21 days for disconnecting after 30 days to cure the breach is against the intent of the regulation and the same should be reduced to 14 days from 30 days.

AIDCF has suggested that the handing over of the properties after termination must be subject to the scheme opted by the subscriber as in terms of TRAI regulations there are various schemes through which the hardware and STBs may be provided to the consumers. Therefore, it depends on the scheme chosen by the consumers.

Hathway has suggested that the defaulting party that fails to hand over the properties after termination must pay simple rate of interest calculated at the base rate of State Bank of India, which is 9 per cent, plus 4 per cent.

TV signal piracy

The IBF has stated that Clause 8.7 should be rephrased to make MSOs and LCOs accountable for signal piracy because the broadcasters provide content and they are the ones who stand to lose in case of piracy.

On the provision of service, AIDCF has suggested that the “MSO shall non-exclusively make available signal of TV channels to the LCO in order to re-transmit the same (only in digital mode) to the subscribers in the territory in the same format and manner as received from MSO, in terms of this agreement and as per prevailing norms, policies, the applicable laws and rules, regulations, directions and orders of the concerned authorities”.

DEN Networks has requested TRAI to amend Clause 6.2, which states that MSOs will have to sign agreements with broadcasters for re-transmitting signals. The MSOs submitted that there are situations when the agreements with the broadcasters and the MSOs are at the negotiation stage, and the services are availed from the broadcasters through a written memorandum of understanding.

Imposing such restriction in the draft agreement will put superfluous stress on the MSOs to sign the deals in a hurry without analysing the impact and would give an opportunity to the broadcaster to arm-twist and make the MSO sign on dotted lines and unreasonable terms, DEN stated.

Bill generation

AIDCF has suggested that MSOs generate bills within seven days from the end of the billing cycle, as three days’ period is too short to put the data in the subscriber management system (SMS).

The federation has submitted that the MSO will be responsible for encryption of the complete signal, transmitted through its network until it reaches the network of the LCO. However, the LCO will then be responsible for the same up to the STB installed at the premises of the subscriber.

On the generation of consumer bills, the federation has submitted that the MSO will generate bills/invoices on OYC (to be delivered to the subscribers) on the last day of every month. The LCO will take printouts from OYC of subscriber’s bills/invoices and distribute/issue all such bills/invoices to the respective subscribers on or before the seventh day of the date of the invoice.

The LCO shall collect activation charges, subscription fee (as fixed by MSO) applicable taxes, rental amount of STB and/or any other charges due from subscribers on or before the 15th day of the date of the invoice and deposit all payments received from subscribers into the bank account of MSO on or before 24 hours of such collection from the subscribers.

LCO migration and swapping of set-top boxes

It has also suggested that TRAI should expand the clause to add that the LCOs cannot migrate to any other distributor of signals without following due process of law in Clause 9.5.

On the same point, DEN has suggested that the draft agreement should provide a proper mechanism to act as a safeguard for MSOs against the malpractices of LCOs such as swapping of boxes.

In Clause 9.6, it has proposed that the LCO shall not provide connection to any commercial subscriber and to any other entity using the signals for further retransmission of cable TV signals.

It has also urged TRAI to amend the quality of service (QoS) regulation to mandate the LCOs to share the responsibility of establishing a complaint monitoring system along with the MSOs as the LCOs are directly dealing with the subscribers and are aware of the technical issues at their networks.

TRAI has suggested that the responsibility to generate unique identification number (UIN) for the applicant will be on the MSO and not on the LCO as suggested in the draft.

AIDCF has urged TRAI to remove Sub-clause 17 (iv), which puts the overall responsibility of customer redressal on the MSO, as it has too wide an interpretation and would lead to unnecessary litigations.

On the payment of taxes to the government, the federation has suggested that the addition of words “as per applicable rules and regulations of the respective tax authorities”.

The federation has requested removal of the paragraph that mandates the MSO or LCO to update details in the SMS in case of default of payment by the subscriber, as the same is not required and may create confusion.

In case of default of payment, the federation has recommended that the defaulting party be made to pay simple rate of interest at SBI rate plus 4 per cent.

DEN has also urged TRAI to prescribe the fallback arrangement and execution of SIA part of the draft agreement as mandatory in case where the parties fail to arrive at a consensus on the revenue sharing terms.

What LCOs think

The Maharashtra Cable Operators Federation (MCOF) has suggested that though the MSOs should generate bills, the bill should also have the name of the last mile operator (LMO). It has suggested that the MSO shall raise invoice on LMO for transfer pricing, i.e. based on the ICA terms with corresponding customer base consumption details every \nth.

It added that the revenue share may be decided mutually by MSO and LMO, and may include customer billing, placement fees and advertising income on cable channels.

The Cable Operator Federation of India (COFI) has suggested that the MSOs should not disconnect signals in case of default at the customer’s end and that they should rather tray to retain the connection.

In many cases, MSOs who do not own the last mile force the LCOs to disconnect such subscribers due to which LCOs lose business, COFI added.

The federation also stated that interconnection agreements must bind MSOs and LCOs in a permanent or semi-permanent relationship so that together they move towards building a well-integrated network providing all broadband services and not just TV channels.