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TRAI’s interconnect agreement proposals between MSOs and LCOs

MUMBAI: With multi-system operators (MSOs) and local cable operators (LCOs) continuing to wrangle over interconnect agreements that would fix their commercial terms, the Telecom Regulatory Authority of India (TRAI) has come out with a solution.

In case there is a dispute, TRAI has proposed a standard interconnection agreement (SIA) that could be followed as a draft model. Earlier, the sector regulator had said that it would be best left for market forces to sort out interconnection agreements between the MSOs and the LCOs.

The objective of the draft model and standard interconnection agreement is to reduce disputes between MSOs and LCOs, provide a level playing field to both, and ensure compliance of the regulatory framework for digital addressable system (DAS).

TRAI has, thus, released a single document, namely draft model and standard interconnection agreement consisting of a model interconnection agreement (MIA) and a SIA.

In cases where the revenue settlement is mutually agreed between the MSO and the LCO, TRAI has proposed that the MIA part of the draft agreement should be applicable.

However, in case the MSO and the LCO could not mutually arrive at revenue settlement and it is decided to continue relationship based on the fallback subscription revenue share arrangement, the SIA part of the draft agreement would be applicable.

It is pertinent to note that TRAI, while notifying the regulatory framework in 2012, did not formulate an SIA and left it to market forces. The rationale for not having an SIA was that there could be various relationship models between the MSOs and the LCOs.

Stakeholders have been requested to offer their comments and counter comments latest by 31 December and 7 January respectively. The comments/counter comments may be sent to sksinghal@trai.gov.in or das@trai.gov.in.

Except Clauses 10 to 12 of the proposed draft agreement, which relate to the roles and responsibilities of the MSOs and the LCOs, billing and revenue settlement, other clauses would remain unchanged in the final MIA and SIA.

In Clause 10 of the proposed draft agreement, some of the roles have been clubbed together to assign common responsibility of these roles either to the MSO or to the LCO. Splitting of these roles may result in inconsistencies and gaps in the delivery of satisfactory services to the consumers.

However, at the consultation stage, the stakeholders can provide their valuable comments on regrouping of roles, if necessary, with justifications, TRAI said.

Why standard interconnection agreements

So, what prompted TRAI to issue a draft model and standard interconnection agreements?

The answer lies in the various meetings the authority had with MSOs and LCOs during January–October 2015 with the objective to enhance the awareness of the regulatory framework among stakeholders and to assess the compliance of the framework.

During these interactions, the stakeholders, particularly LCOs, raised the issue that the terms and conditions of the agreement offered by the MSO is one sided and do not provide a level playing field to the LCOs.

TRAI noted that the obligation of both the parties for meeting the quality of service norms prescribed in the QoS regulation is often not clearly defined in the interconnection agreement. Due to this, the QoS is adversely affected in the event of disputes between the MSOs and the LCOs.

The draft agreement lists roles and responsibilities as well as rights and obligations of each party separately.

SIA and the clauses

In case of the SIA, the responsibilities for various roles shall be fixed as per Column 4 of Clause 10 of this draft agreement after considering the comments of the stakeholders. Similarly, the billing and revenue settlement responsibilities shall be fixed as per Clauses 11 and 12 respectively of this draft agreement after considering the comments of the stakeholders.

Accordingly, all the terms and conditions of SIA, including the revenue share settlement conditions, shall be standardised after prescription of the SIA. No addition, deletion, and or alteration would be permitted thereafter in the SIA terms and conditions.

MIA and the clauses

In case of the MIA, the responsibilities for various roles to be finalised in Clause 10 of this draft agreement can be mutually agreed by the parties and recorded in writing in Column 3 of Clause 10. In this case, Column 4 of Clause 10 of this draft agreement would not be applicable.

Similarly, the billing and revenue settlement responsibilities shall be agreed mutually as per Clauses 11 and 12 of this draft agreement respectively and recorded in writing in the agreement. No deletion and or alteration would be permitted thereafter in MIA terms and conditions.

However, TRAI has given flexibility to the MSOs and LCOs to add certain additional terms and conditions through mutual agreement, provided that such terms and conditions do not dilute, override, and/or alter the existing terms and conditions.

In case of any conflict between the existing terms and conditions of the prescribed MIA and the new terms and conditions added through mutual agreement by the parties, the existing terms and conditions of the prescribed MIA shall prevail, TRAI stated.

The authority also noted that the existing regulation and tariff orders applicable for DAS may require suitable amendments to incorporate necessary provisions relating to the model and standard interconnection agreements between MSOs and LCOs.

While the interconnection regulation for DAS stipulates that no MSO shall provide signal of TV channels to an LCO without entering into a written interconnection agreement, the situation on the ground is completely opposite. The MSOs and LCOs have been bickering over the last three years on several issues with revenue share being the primary issue.

In August this year, TRAI had released data on the number of interconnection agreements signed by the five big MSOs with LCOs in DAS Phases I and II. As per that data, Siti Cable had inked the most number of interconnection agreements (3387), followed by GTPL Hathway at 3125. DEN Networks, IndusInd Media & Communications Ltd (IMCL), and Hathway Cable & Datacom had inked 3010, 2769 and 1462 agreements respectively.

Click here for link of draft MIA and SIA between MSOs and LCOs for DAS

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