Alarmed by new consultation paper, IBF urges TRAI to defer any further regulatory interventions

MUMBAI: Alarmed by the Telecom Regulatory Authority of India’s (TRAI) consultation paper on broadcast tariff related issues, the Indian Broadcasting Foundation (IBF) has requested the TRAI to defer any further regulatory interventions.

The IBF has asked the TRAI to give the industry and consumers more time to adapt to the new regime. It also noted that the broadcasting industry has gone through several major regulatory changes in the last few years moving from analogue to CAS to digital and addressable systems and now to an MRP pricing regime.

The foundation noted that stability in policy formulation and “soft touch” in regulatory oversight is an absolute necessity for healthy industry growth. It also pointed out that the government’s focus on “ease of doing business” warrants minimal regulatory intervention.

It also said that the regulatory intervention at this early stage in the implementation of the new tariff order (NTO) will have disastrous consequences for the broadcasting industry.

“In these circumstances, IBF would urge TRAI to defer any further regulatory interventions and allow the industry and its stakeholders and especially the consumer more time to adapt to the new regulatory regime,” IBF said in a release.

Through the consultation paper, the regulator has launched a full-scale review of the new tariff order (NTO) that came into force in December 2018. The TRAI said that the broadcasters and distribution platform operators (DPOs) have misused the liberty given to them in the NTO. Therefore, it is going in for a review of sensitive issues like the discount cap on bouquets.

The IBF further stated that the issues raised for consultation by TRAI in the consultation paper strike at the very heart of the new MRP based tariff regime which TRAI made effective from 1st February 2019 (NTO).

The foundation stated that the consultation paper has come at a time when the entire industry and consumers are still grappling with the new regulatory regime. The consultation paper, IBF said, goes against the norms of a stable regulatory regime.

“Surprisingly barely a few months after the commencement of the NTO and even before the industry at large and more importantly the end consumer has fully adapted to the new regulatory regime, TRAI proposes a fresh CP seeking to make fundamental changes in channel pricing and bouquet formation. This goes against all norms of a stable regulatory regime so necessary for the economic advancement of any industry. TRAI’s CP proceeds on the assumption that consumers are being denied their choice of channels by excessive discounts on bouquets,” IBF said in the release.

It also pointed out that the cap on bouquet discounts under the NTO was struck down by the Madras High Court as “arbitrary”. It further noted that the global practice in the television and cable industry is the offering of content in bouquets customized to meet the diverse needs of consumers.

The IBF stated that the new tariff regime gives enough choice to the consumers. It also sought to refute TRAI allegations that broadcasters are keeping the price of popular deliberately high to force consumers to subscribe to bouquets.

“The NTO itself allows broadcasters and DPOs to offer channels both a la carte and in bouquets giving the consumer the freedom of choice. In fact, the basic tier mandated by the NTO of 100 FTA channels for Rs. 130 is itself a bouquet offering. Thus, the impression being created that broadcasters are gaming the system to push bouquets is incorrect,” it said.

The IBF averred that frequent tinkering with regulations and attempting to micro-manage free markets can lead to adverse consequences. It also said that promoting a la carte at the cost of bouquets will deny consumers the choice they need in a country like India with such a large and variegated diversity of cultures and languages.

Smaller as well as niche content channels will lose out and their viability will come under question. Broadcasters will be unwilling to launch new channels and producers will be unwilling to experiment with new content. All this will lead to fewer shows being produced which will have a knockdown effect on downstream production and on employment in the sector.

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