DPOs, TV broadcasters provide comments on TRAI’s draft register of IA regulation

MUMBAI: The distribution platform operators (DPOs) and TV broadcasters have provided their comments on the Telecom Regulatory Authority of India’s (TRAI) draft register of interconnection agreements regulation for cable and broadcasting sector.

The draft regulation, which was released on 22nd April, will be applicable to all commercial and technical arrangements entered into amongst broadcaster, distributor of television channels and local cable operator for providing broadcasting services relating to the television provided through addressable systems throughout the territory of India.

In their submissions, most stakeholders have suggested that the TRAI should not exempt smaller DPOs with an active subscriber base of less than 200,000 from filing information relating to their interconnection agreements.

The stakeholders are of the view that the said exemption will be contrary to the objective of new regulation which is non-discriminatory and level-playing field for all players.

The authority had earlier stated that the primary objective of the register of interconnect regulations is to formulate the contours of a reporting system for the service providers so that they can report details of interconnection agreements including commercial details to the authority. DPOs with active subscribers less than 200,000 were proposed to be exempt from filing the agreements.

The stakeholders have also urged the TRAI to revisit the proposal which requires filing interconnection agreement every quarter. Some stakeholders have suggested annual filing while some are in favour of six monthly filings.

Another proposal on which the stakeholders differ with TRAI is the imposition of financial disincentive.

The authority has prescribed levying of financial disincentives on the broadcaster or distributor of television channels for the delay in reporting. The financial disincentive is proposed on graded scales.

In case of delay beyond thirty days, the financial disincentive will increase and will be @Rs. 2000/- per additional day beyond the first thirty days. In case a broadcaster or distributor of television channels files information 40 days after the due days, the financial disincentive shall be calculated as under:

Financial disincentive for first 30 days = Rs. 30000/- (@1000 *30)
Financial disincentive for next 10 days= Rs. 20000/- [@2000*(40-30)]
Total Financial Disincentive = Rs. 50000/-

On the issue of filing the agreement quarterly, Sony Pictures Networks India (SPNI) has suggested that since most broadcasters have entered into RIOs for one year time period, filings should be undertaken by broadcasters on an annual basis.

It has also stated that the reporting requirements under the Draft Regulations should restrict themselves only to subscription, carriage/placement RIOs.

It further stated that the inclusion of any other commercial arrangements between broadcasters and DPOs would result in the expansion of the scope of the Draft Regulations significantly beyond the scope of the regulations and is unwarranted.

The broadcaster has also urged the TRAI to remove the requirement for the filing of copies of the interconnection agreements/modifications in light of the standardisation that has seen introduced by the MRP Regime.

In order to evade non-serious parties and persons with vested interests from accessing such registers and for the reasons mentioned above, the process laid down under the Register of Interconnect Agreements Regulations should be retained in the Draft Regulations, the broadcaster said in its submission.

It further stated that the process provided under the Register of Interconnect Agreements Regulations in terms of the application being made to the designated officer of TRAI for inspection of the register /inspection through the TRAI website and payment of a fee should also be incorporated in the Draft Regulations.

TV18 has recommended the authority to not exempt DPOs on the basis of subscribers and the report filing should also be done annually instead of quarterly.

While stating that the New Regulatory Regime ensures that there are no regulatory gaps, TV18 stated that the authority should not prescribe any onerous or burdensome requirements on stakeholders i.e., both broadcasters as well as OPOs in the form of filing of copies of interconnection agreements or modification, or amendment or addendum.

Times Network has opined that the details being sought by the regulator under the new regulation relates to extremely confidential and business sensitive information and such data has the possibility of revealing the critical business information and commercials involved therein, which, if disclosed in the public domain, may cause irreparable injury to the business of the stakeholder.

“Such data, if misused may be detrimental to the business interest of the stakeholder. Hence, we strongly recommend doing away with the provisioning of confidential details in the report,” it stated.

Discovery Communications has suggested that there should not be any penal provisions for the delay in reporting as the issuance of show cause notice in case of any lapses by the authority is sufficient.

“Thus, in a sector wherein the extremely conscious Service Providers are already being regulated by a very active Regulator, additional regulations that specify penal consequences is not necessary,” it added.

Direct to home (DTH) operators Tata Sky and Bharti Telemedia (Airtel Digital TV) are against any exemption to any DPO based on subscriber base. They are also in favour of annual filing of agreement.

Tata Sky stated that the proposed quarterly reporting will add to the efforts and man-hours and also increase the compliance. It also submitted that there is no need for an additional requirement of the reporting to be done by the Compliance Officer. The reporting should be permitted from any Authorized officer of the company.

Bharti Telemedia submitted that the reporting of the information should not be mandated only via the compliance officer. The submissions should also be allowed via a duly authorised and responsible officer of the distributor/Broadcaster other than the Compliance Officer.

On financial disincentive for failure to furnish the information, the DTH operator has submitted that there should not be any financial disincentive for the delay in submission of the report.

Multi system operators (MSOs) Hathway Digital, GTPL Hathway, DEN Networks, Siti Networks, and IndusInd Media and Communications (IMCL) have also provided their comments.

Hathway submitted that the new tariff regime does not discriminate between the DPOs on any ground and requires all DPOs to follow it religiously irrespective of its size/target market/ technical and IT capability, financial position etc. and in its letter and spirit.

By giving the relaxation on the bases of active subscriber base, the authority itself would be creating two classes of DPOs, Hathway stated. This, it stated, would further give rise to different classes of DPOs asking for some or the other relaxation from complying with one or the other requirements of the new tariff regime.

Hathway also opined that the authority needs to take into account is that though the DPOs with an average subscriber base of 200,000 seems to be small in comparison with DPOs operating at PAN India basis, however, these smaller DPOs are market leaders or number two or number three in their respective markets.

It cited the examples are Seven Star Dot Com Pvt Limited, JPR Channel, Mauli Cable Network, Digi Home Cable Entertainment India Pvt. Limited, ABS Digital Cable Pvt. Limited and ABS Entertainment Pvt. Limited in Mumbai, Maharashtra, Digiana Projects Pvt. Limited and ACN Digital Pvt. Limited in Indore, and Sree Digital Home Entertainment Pvt. Limited in Bengaluru etc.

While concurring with Hathway, DEN Networks submitted that the filing should be six monthly. It also stated that Clause 4(2) should be modified such that instead of all individual agreements it should be all interconnect agreements.

It also stated that the word all individual agreement is very wide and vague and which may include every agreement apart from the interconnect agreement. Since this is a register of interconnect agreement, therefore, only Interconnection agreements need to be reported.

Siti Networks noted that in small areas the relationship between MSOs and local cable operators (LCOs) are governed by oral relationship and by the introduction of this clause it would promote violation of the provisions of Interconnection Regulations for the signing of Written Interconnection Agreements.

GTPL Hathway stated that the draft regulations should not include marketing and/or other commercial agreements as that would make the scope of the agreement very extensive.

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