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TRAI set to develop holistic tariff structure for distribution platforms

MUMBAI: After much prodding from the Telecom Disputes Settlement & Appellate Tribunal (TDSAT), the Telecom Regulatory Authority of India (TRAI) has finally come out with a consultation paper to review existing tariff arrangements and develop a comprehensive tariff structure for addressable TV distribution across delivery platforms (DTH, cable TV, HITS, IPTV) at both wholesale and retail levels.

TRAI is seeking to bring in transparency and non-discrimination in interconnect deals between broadcasters and distribution platform operators (DPOs).

On carriage, TRAI has sought stakeholder opinion on whether it should be regulated. The sector regulator also wants to know if there is a need to prescribe cap on maximum carriage fee to be charged by DPOs (Cable, DTH, etc) per channel per subscriber. Should the carriage fee be reduced with increase in the number of subscribers for the TV channel? Should the practice of payment of placement and marketing fees amongst stakeholders be brought under the ambit of regulation?

The sector regulator wants to frame a tariff structure that will protect the interests of the consumers in areas like choice of channels and budgeting their expenses.

TRAI also feels the need to identify significant market powers and is considering whether a differential regulatory framework should be introduced for the sector.

Titled ‘Tariff issues related to TV services’, the consultation paper has been issued with the objective of examining the tariff dispensation in a holistic manner in light of the emerging trends in the TV broadcasting sector and changing consumption patterns of the consumers.

The objective is to ensure that the tariff structure is simplified and rationalised so as to ensure transparency and equity across the value chain.

It also aims to reduce the incidence of disputes between stakeholders across the value chain, thus encouraging healthy growth in the sector besides ensuring that subscribers have adequate choice in the broadcast TV services while they are also protected against irrational tariff structures and price hikes.

TRAI also intends to encourage investment in the TV sector and ensure production of good quality content across different genres.

This consultation paper is meant to create an enabling environment for growth of the sector in light of various developments related to technology, emergence of multiple distribution platforms, evolving business models, and enhanced addressability across platforms.

The major issues covered in the consultation paper are as follows:

  • Tariff models at wholesale and retail levels
  • Channel pricing mechanism and methodologies
  • Genre caps for pricing the channels
  • Issues related to niche channels
  • Pricing of high-definition (HD) channels
  • Ease of channel or bouquet subscription
  • Channel visibility on electronic programme guide (EPG)
  • Pay-per-programme viewing and tariff options
  • Variants of channels
  • Carriage, placement and marketing fees

Some of the questions TRAI has asked are:

  • Is there a need to create a common GEC genre for multiple GEC genre using different regional languages such as GEC (Hindi), GEC (English) and GEC (Regional language)?
  • What should be the measures to ensure that price of the broadcast channels at wholesale level is not distorted by significant market power?
  • What should be the basis to derive the price cap for each genre?
  • What percentage of discount should be considered on the average genre RIO prices in the given genre to determine the price cap?
  • Should there be a linkage of HD channel price with its SD format?
  • Should similar content in different formats (HD and SD) in a given bouquet be pushed to the subscribers?
  • Is there a need to regulate variant or cloned channels i.e. creation of multiple channels from similar content, to protect consumers’ interest?

TRAI has asked stakeholders to offer their comments/views latest by 4 March. Counter-comments, if any, can be submitted by 18 March.

The Supreme Court had in August last year asked TRAI to conduct a fresh tariff exercise based on the directions given by the TDSAT while setting aside the authority’s 27.5 per cent tariff hike for non-addressable system.

The apex court had upheld the TDSAT order on 4 August and directed TRAI to reconsider the matter considering the observations made in the order and to pass a fresh order.

The tribunal, in its order dated 28 April, had directed TRAI to have a relook at the various tariff orders in a holistic manner and come out with a comprehensive tariff order in supersession of all the earlier tariff orders.

Recently while pronouncing its verdict in the NSTPL vs Star India/Taj Television case, the TDSAT had advised TRAI to frame a consolidated broadcasting code to replace the current maze of regulations that are being amended from time to time. However, the tribunal had also clarified that this was not a direction to TRAI.