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TRAI asks broadcasters to roll back 27.5% tariff hike
MUMBAI: In a surprise move, the Telecom Regulatory Authority of India (TRAI) has asked 54 pay TV broadcasters to roll back the 27.5 per cent inflation-linked tariff hike in non-addressable system areas in the wake of the Supreme Court refusing to grant stay to the broadcasters.
A letter dated 23 July, signed by TRAI Joint Advisor (B&CS) Group Capt. Umesh Kumar, has asked the broadcasters to revise their wholesale tariff for the non-conditional access system (CAS) and digital addressable system (DAS) areas to those that existed before the implementation of the two tariff orders.
The broadcasters have also been asked to file the revised tariff with TRAI within 10 days from the date of receipt of the letter.
In the letter, Capt. Kumar has elucidated that the Telecom Disputes Settlement & Appellate Tribunal (TDSAT) had set aside the tariff orders through which TRAI had allowed inflation-linked increase in non-addressable area tariff.
Although the broadcasters have challenged the TDSAT order in the Supreme Court, no stay has been granted so far. This compelled TRAI to comply with the TDSAT order.
According to a source in TRAI, the sector regulator is unhappy with the broadcasters for not signing interconnect agreements with multi-system operators (MSOs) for DAS (digital addressable system) Phase III areas. The broadcasters are yet to publish their rates for Phase III areas as they are waiting for the tariff hike case to be settled in the Supreme Court.
“Broadcasters are not signing interconnect agreements with MSOs in DAS Phase III despite so many meetings. It’s more than six months and interconnect agreements are still pending. They are not declaring their rates also,” the official said.
He further added that using artificial ceiling as an excuse for not signing agreements in Phase III is a pure hogwash as no broadcaster does deals based on a la carte (popularly known as RIO or reference interconnect offer) rates.
TRAI had allowed broadcasters to increase their rates up to 27.5 per cent in two instalments (15 and 12.5 per cent). The first instalment of the 15 per cent hike came into effect from April 2014 through tariff order dated 31 March 2014 and the remaining 12.5 per cent came into effect from January 2015 through tariff order dated 31 December 2014.
The increase in the wholesale prices for non-addressable systems resulted in the corresponding increase in tariff in DAS areas. As per a Supreme Court verdict, the addressable system tariff is 42 per cent of the non-addressable system tariff.
The tribunal through its order dated 28 April 2015 had set aside the tariff orders, thereby quashing the inflationary increase of 27.5 per cent in the wholesale prices for non-addressable systems and consequently the DAS systems.
Earlier, the tribunal had asked all stakeholders to keep a separate account with regard to the collections based on the order.
In case the appeals are successful, the individual subscribers making any excess payment in terms of the order will be entitled to adjustments for the succeeding months from the respective local cable operators/MSOs.
Similarly, the operators will be entitled to adjustments from the MSOs and the LCOs. The MSOs will be eligible for adjustments from the broadcasters, the tribunal had stated.
The tribunal had questioned the justification for giving a 27.5 per cent hike in non-CAS areas, noting that the agreements being entered in DAS areas were at rates far lower than the prescribed ceiling of 42 per cent of non-CAS areas.
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