TRAI floats consultation paper on issues related to TV channel licences
MUMBAI: The Telecom Regulatory Authority of India (TRAI) has issued a consultation paper on ‘Issues relating to Uplinking and Downlinking Television Channels in India’ after receiving a reference from the ministry of information and broadcasting (MIB) to look into the matter as the existing guidelines are more than five years old.
The authority has sought comments and counter-comments from stakeholders on a range of issues including net worth of eligible companies, grant of licence for satellite channels, entry fee/licence fee, encryption of TV channels, and transfer of licence among others.
Stakeholders can provide written comments on the consultation paper by 18 January 2018. Counter comments, if any, may be submitted by 31 January 2018.
On the issue grant of licence, the regulator noted that the government could adopt a framework wherein it adopt a framework that would, besides maximising the revenue from the licence activity, foster an environment which would induce plurality of views, promote local content and culture, bridge the rural urban information gap, and optimize the number of licenses granted in a given market.
It also noted that the grant of license for satellite TV channels through auction process may affect plurality of channels, and create entry barriers for new broadcasters. It may also lead to increase in market concentration and have adverse consequences in terms of price of final product, and market behaviour.
The authority also said that the resources used for TV channels like uplinking and downlinking spectrum, and satellite transponder are fully or partially in the control of the central Government. The central government can auction only those resources which are fully in its control.
Auction of the individual leg of satellite TV broadcasting i may not be technically feasible as these require coordinated use for successful broadcasting of TV channels. Further, the options of uplinking from outside India, and use of satellite transponder capacity on foreign satellites may restrict the plausible gains from auction of these resources.
“Therefore, alternate could be to auction a complete package for a satellite TV channels i.e. uplink from Indian soil to Indian satellite, and downlink in India. However, this will require restrictions on use of foreign satellites for satellite TV Broadcasting,” the authority said in the consultation paper.
It further added that the requirement of mandatory uplinking from India’s soil to Indian satellite may cause scarcity of satellite transponders and restrict the growth of the broadcasting sector.
Net worth criteria
The authority noted that the entry should be easy for new licensees as high net-worth requirement would deter first generation/new entrepreneurs from entering into this sector.
It also stated that the high net-worth criteria could also discourage the growth of local and regional channels, thereby affecting overall program diversity. Reduced competition due to very high entry barriers may also affect prices of the channels for end consumer.
It also said that the increase in entry barriers may also create incentives for trading or sub-leasing of existing licenses.
The authority also put forth an argument stating that the increase in entry barriers for uplinking of TV channel from India may also encourage diversion of such business opportunities to outside India. This may affect the direct and indirect employment opportunities created by this sector.
The authority stated that amount of entry fee to be charged from domestic channels for downlinking in India may be fixed which can be reviewed on periodic basis.
In order to incentivise uplinking of TV channels from India, the authority has suggested that the entry fee may be continued at ‘Nil’ level only.
On the issue of licence fee, the authority noted there are three ways in which licence fee can be determined. There are fixed licence fee, as is the case currently, variable fee, and non-variable fee.
The authority stated that the licence fee can be paid if variable or semi-variable license fee structure is finalised then it could be paid to the Government on quarterly basis as is the norm in the DTH sector. At present the license fee is required to be paid on annual basis.
Encryption of channels
Due to ongoing practice of transmitting free to air (FTA) TV channels in un-encrypted mode through satellite, the authority noted that some unregistered distribution platform operators (DPOs) are also able to distribute signals of such TV channels
To address such concerns, one view could be that as required under the policy guidelines for downlinking of TV channels dated 05.12.2011, all satellite TV channels, irrespective of their category, i.e. Pay or FTA, should uplinked in encrypted mode by broadcasters, it suggested.
Operationalisation of licence
The authority has suggested that for the purpose of uplinking guidelines, date for operationalisation of a permitted TV channel could be considered as the date from which signals of that channel starts transmitting and such TV channel remain continuously in operation after start of such transmission.
Similarly, for the purpose of downlinking guidelines, date for operationalisation of a permitted TV channel could be considered as the date from which signals of that channel start distributing by a registered DPO and which is continuously distributed to subscribers thereafter.
Transfer of licence
In order to completely stop such practices of hawking or trading or leasing of licenses, the authority has suggested that the functions of the licensees, which can’t be outsourced to any other entity, be clearly identified and prescribed as part of the license conditions.
Being a basic infrastructure for satellite TV broadcasting services, the authority has suggested that the rate of license fee on companies should be low.
However, it also noted that being similar to other communication services, and therefore, to ensure level playing field, a license fee @ of 8% of AGR be levied.
The authority is also not in favour of putting an limit on number of teleports as it will force broadcasters to shift uplinking operations abroad which will impact domestic employment.