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TRAI to slap penalty on MSOs for not providing bills to consumers in DAS

MUMBAI: Non-implementation of consumer billing in digital addressable system (DAS) could prove to be an expensive proposition for multi-system operators (MSOs) as the Telecom Regulatory Authority of India (TRAI) has notified amendments to the DAS quality of service (QoS) regulations. Consequently, erring MSOs will be penalised for not providing bills to the subscribers.

As per the amendment, MSOs will have to pay a fine of Rs 20 per subscriber if they fail to comply with the provisions regarding billing and issue of receipts for payments made by subscribers. TRAI is of the view that financial disincentives will be an effective deterrent to prompt MSOs to issue bills and receipts to subscribers.

In the amended regulation, an explanation has been incorporated that states that the pre-paid option offered by MSOs shall be implemented through electronic pre-paid mechanisms.

Furthermore, to ensure that MSOs honour the pre-paid or post-paid option chosen by subscribers in a timely manner, a fine of Rs 100 per subscriber shall be imposed on the MSO for each contravention.

The QoS regulations prescribe that cable TV services shall be offered to subscribers both on pre-paid and post-paid payment models.
The authority has given MSOs a time of 60 days to align their business processes for compliance with the provisions of the regulations.

“Imposition of financial disincentives would effectively curb the non-compliance of the provisions of the regulations and would benefit consumers and the cable TV sector,” TRAI said.

LCOs left out of penalty provision

Incidentally, TRAI has decided to leave out local cable operators (LCOs) from the penalty provision.

Spelling out the rationale, the authority explained that MSOs are responsible for providing services to their subscribers in accordance with the subscription agreement.

Moreover, the headend, conditional access system (CAS) and subscriber management system (SMS) should be installed and maintained by the MSOs.

However, in cases where cable TV services are being provided by an MSO through its linked LCOs, the responsibility of compliance with QoS norms and billing can be shared between the MSOs and LCOs through suitable agreements, the authority clarified.

Subscribers can be charged interest for delayed bill payment

In order to instil financial discipline in the subscribers, the authority has allowed MSOs to levy a simple interest on due amount at a rate up to 15 per cent per annum on a subscriber for delayed payment.
TRAI has arrived at the interest rate based on weighted average cost of capital (WACC) of the service provider.

The MSOs have to enter details of payment received from subscribers into the SMS as soon as possible, but no later than seven days from the date of payment. This is to ensure that the subscriber account is updated well before the start of the next billing cycle.

TRAI has notified the amendments to the existing QoS regulations for DAS following exhaustive consultation process.

Consumer grievances not addressed

The authority also said that the prescribed norms for billing and issue of receipts for every payment made by subscribers are not being complied with by the MSOs. Such non-compliance, it stated, has resulted in numerous legitimate consumer grievances.

In the absence of a bill, a subscriber cannot ascertain whether the amount demanded by the MSO for the cable TV services is correct or not, the authority said in the statement. Similarly, in the absence of a receipt for the payment made, there is no means to get a grievance redressed in case of any billing-related dispute with the operators, it further added.

The authority further contended that the information of actual subscription vis-à-vis billing and payment details are not being entered into the SMS due to non-delivery of bills and receipts by the MSOs.

“Consequently, commercial deals and financial transactions among operators are not being carried in a transparent manner. It is adversely affecting smooth implementation of DAS as mandated by law,” the authority averred.

It also said that in the absence of proper billing and accounting of receipts, there is a very real possibility of a loss of revenues accruable to the government. “It is essential that the government gets its due tax revenues arising out of the business of the cable TV services sector,” it noted.

Backdrop

TRAI had issued draft amendment on 28 August 2014, inviting comments from stakeholders. In response to this consultation process, as many as 32 comments were received from stakeholders, including consumers.

Subsequently, an open house discussion was also held on 29 September 2014 in Delhi, which was attended by a large number of stakeholders. Additional time up to 10 October 2014 was given to the stakeholders for further comments on the draft amendments to the regulations.

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