TRAI open to liberalising regulatory framework provided industry shows mature behaviour: SK Singhal
MUMBAI: The Telecom Regulatory Authority of India ( TRAI) is open to liberalising the regulatory framework for the broadcasting sector provided the stakeholders work together in a cohesive manner, Advisor (B&CS) SK Singhal has said.
“We are seriously interested in further liberalising the regulatory framework, but that depends on the behaviour of the industry. No other factor will decide that,” Singhal said at ‘Digitise India’ seminar, organised by TelevisionPost.
Singhal called upon the stakeholders to introspect why they are not able to sort out disputes among themselves, rather than blaming the government and the regulator. The regulator’s mandate is to draw a balance between consumer and industry interest, he stated.
Responding to a question as to why TRAI is regulating TV channel price when even essential commodities like food grains and vegetables are deregulated, Singhal pointed out that only wholesale price has been regulated while retail price, where the main competition is, has been left untouched.
He argued that even in the case of wholesale pricing, the industry is operating at 8–10 per cent of the ceiling, which has been fixed at 42 per cent of analogue price.
“At the wholesale level though people claim that prices are regulated at 2004 level, you can ask any broadcaster or distributor how many of them are able to touch that ceiling. What kind of restrictions are we talking about?” he contended.
The Indian market, Singhal argued, should not be compared with developed markets in terms of content pricing since purchasing power is not the same. He also said that the regulator has provided enough headroom for revenue growth even with price regulation.
“We are not curbing the price. We have given enough room for evolving the market price, but simultaneously we have to understand very clearly that the dynamics of the Indian market at the retail level are totally different from those of developed markets. Neither do people here have that much earning, nor do the distributors or broadcasters have limited reach. Prices are dependent on the reach and volume also,” he averred.
He termed the regulation of wholesale price as genuine protection of consumer interests. Under the digital addressable system (DAS) regulation, a consumer has to pay a minimum of Rs 150 if s/he asks for even one pay channel since there is cost associated with customer acquisition and servicing of consumers.
Asserting that non-discrimination and non-exclusiveness are the fundamental principles of the regulation, he asked why the stakeholders are not able to display the same in their day-to-day agreements.
“I can assure you that the fundamental principles of the regulation have and will continue to remain intact. We are not going to touch non-exclusivity, non-discrimination and must carry,” he told the gathering.
He also drew attention to TRAI’s recent consultation paper where it looked at tariff and carriage related issues in a holistic manner.
“We want to encourage innovation and ensure a level playing field, which is why we are talking about not just regulation of tariff but also regulation of carriage fee in our new consultation paper,” Singhal said.
He added that the outcome of the consultation paper would depend on the inputs from the stakeholders.
The consultation paper has been devised to attract investment in the sector at the broadcast as well as distribution level. He said that there is a huge opportunity for distribution players to come up with a sustainable model that includes other services like broadband rather than depending on video services.
Even as TRAI is working on creating a regulatory framework to ensure balance in the ecosystem, the regulator will now devote its energy to enforce those regulations. He cited the example of the interconnection agreement issue between broadcasters and multi-system operators (MSOs) where the authority has amended the regulations to plug the gaps so that no broadcaster provides signals to an MSO without agreement.
Similarly, the authority is working on the MSO–LCO interconnection issue. It has floated a draft standard interconnection agreement (SIA) and a model interconnection agreement (MIA) for consultation in order to resolve the issue of the non-signing of agreements between the two.
“In times to come, you will see much more emphasis on enforcement also,” he asserted.
Noting that solutions to regulatory issues can only be found in a healthy environment, Singhal urged the MSOs and LCOs to adopt MIA rather than SIA, because every MSO and LCO has different capabilities and those can only be harnessed through MIA because not everyone can provide the same services.
Singhal also promised that the authority would show similar proactiveness in discrimination-related issues. “In future, you will see similar efforts on the non-discrimination issue where not only uniform regulation will be available across the addressable platform irrespective of platforms,” he stated.
Even as he was discussing the initiatives taken by the regulator for ensuring a level playing field in the industry, Singhal said that the regulator wants the industry to sort out its issues in a congenial manner.
“One particular issue that concerns us as a regulator is the level where the regulator should stop and let the industry take over,” he said, noting that this again correlated with the level of maturity in the industry.
Explaining further, he said, “We don’t have any issues in going any further to exercise regulatory power. But the minute we go that route, there will be more regulatory infrastructure cost on the industry which will ultimately get passed on to the consumers. The industry should demonstrate that behaviour so that slowly there is scope for light-touch regulation instead of forcing or pushing.”
While noting that regulation review is a continuous exercise, Singhal stressed that the regulator has to balance between stability and regulatory requirements. “Every business requires stability. We can’t review regulations every two years,” he expounded.
He also warned that the regulator would intervene if the industry does not find its own solutions. “If the industry doesn’t evolve to a self or market regulation kind of thing, then this is a next level of regulatory intervention by prescribing SIA,” he said.
According to Singhal, the regulator does not have answer for everything until the industry starts co-operating and provides timely inputs to ensure smooth functioning of the industry.
He said there is a case for pull factor of channels rather than pushing everything down the customer’s throat as more than 50 per cent of consumers are receiving their service in a digitised and addressable form.
“We have to create an environment where the consumer has a choice and distribution platforms can serve consumers without binding from the broadcasters to carry all their channels,” he affirmed.