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TRAI notifies model and standard interconnect deals for MSOs, LCOs

MUMBAI: The Telecom Regulatory Authority India (TRAI) has notified the formats of the model interconnect agreement (MIA) and standard interconnect agreement (SIA) to be signed between the multi-system operators (MSOs) and local cable operators (LCOs) for digital addressable system (DAS) areas.

The objective behind prescribing formats of MIA and SIA is to reduce dispute between the MSOs and LCOs.

The MIA and SIA define rights, obligations, roles and responsibilities of the MSOs and the LCOs.

The MIA will be applicable in cases where the parties have mutually agreed on the responsibility corresponding to each role and the revenue settlement.

The SIA would be applicable in cases where the parties are not able to arrive at a mutual agreement on sharing of the responsibilities or the revenue.

TRAI had issued the draft MIA and SIA on 9 December 2015, inviting comments and counter comments from stakeholders.

TRAI has retained the fallback revenue share option of 55:45 for free-to-air channels and 65:35 for pay channels in SIA and MIA.

In the amended interconnect regulation, TRAI has given the right of packaging and pricing of the service offerings to the MSOs since in DAS it is the MSO who receives a programming service from broadcasters and performs technical functions of a headend (turn-around, encoding, encryption, multiplexing, modulation, combining and subscriber management).

It also said that it is not practically feasible to formulate the composition of services as per the individual requirement of each LCO.

However, TRAI has included a clause in the MIA and SIA where the MSO has been asked to intimate to the LCO at least 15 days in advance in respect of any proposed changes in the package composition or the retail tariff being offered to the subscriber.

The MSOs will have to give a written option to all linked LCOs to modify their existing agreements in accordance with the MIA or SIA, as the case may be within 30 days from the date of commencement of the Telecommunication (Broadcasting and Cable Services) Interconnection (Digital Addressable Cable Television Systems) (Seventh Amendment) Regulations, 2016.

The MSOs will have to enter into an interconnection agreement in accordance with the terms and conditions of the model interconnection agreement or standard interconnection agreement, as the case may be within a period of 30 days from the date of receipt of request from the LCO to provide the signals of TV channels.

Every MSO or its authorised agent will have to provide the signals of TV channels to an LCO within 60 days from the date of receipt of the written request. In case the request for providing signals of TV channels is not agreed to, the reasons for such refusal will have to be conveyed to the LCO, making a request within 60 days from the date of request.

TRAI said that the ownership and upkeep of the individual party is limited to the portion that the individual party owns.

The authority has put the obligation of bill generation on the MSO since the QoS regulations 2012 put an obligation on the MSO that the bills for the services availed by the subscriber must be generated from the SMS automatically at the end of the billing cycle.

The MIA and the SIA put an obligation on the part of MSO to provide to the LCO, at least 2% of the total set-top boxes (STBs) active in the network of LCO with an upper cap of 30 STBs as maintenance spare, which are not pre-activated, to ensure speedy restoration of service affected due to any fault in STBs.

TRAI noted that the regulatory framework provides that the LCO can seek interconnection with one or more MSOs and the interconnection between them is on non-exclusive basis.

However, LCO exiting the interconnection from the MSO must provide proper notice for disconnection and reasons thereof in the terms of the Interconnection Regulations 2012 or as applicable from time to time.

The authority also said that the LCO cannot replace the STBs of one MSO with the STBs of any other MSO without receiving the request from the subscriber through a disconnection application form.

On the issue of revenue share, the authority said that the parties should mutually decide the revenue settlement and its modalities depending on the responsibilities shared between them in the terms of MIA.

In terms of SIA, the MSO will have to share the complete information relating to the subscribers billing and receipt of the payments with the LCO. The LCO will issue monthly invoice to the MSO towards dues payable by the MSO for revenue settlement.

On the aspect of default in payment by parties, the authority has decided that the interest rate of 2% over and above the base rate of SBI is reasonable and accordingly the provision has been made in the MIA and SIA.

To address the problem of default, the authority stated that in cases where any of the parties has failed to make payment on or before due date for three consecutive months in the past, the other party will have the right to demand an interest-free security deposit, which shall not exceed average of immediately preceding six months billing amounts and the same shall be maintained for the remaining term of the agreement.

In case of revocation of registration of any party, the other party shall have right to terminate the interconnection agreement.

The authority said that the prescription of formats of MIA and SIA will pave the way for growth of the sector, leading to a reduction in disputes between the MSOs and LCOs, and provide a level playing field to the parties and increase healthy competition in the sector, which ultimately will help in better quality of services to the subscribers.

click here for Model Interconnect Agreement

click here for Standard Interconnect Agreement