TRAI tightens audit regime for DPOs by amending interconnection regulation

MUMBAI: Telecom Regulatory Authority of India (TRAI) has tightened the audit regime by amending the interconnection regulation.

As per the amended regulation, the distributor of pay-TV broadcasting services will have to schedule audits in such a way that there is a minimum gap of six months between the two annual audits and the maximum time gap is eighteen months.

Further, the minimum transactional capacity required for the conditional access system (CAS) and subscriber management system (SMS) has been revised to 5% instead of the earlier 10%.

The authority is of the view that the STB deployed by distribution platform operators (DPOs) after coming into effect of these amendment regulations shall support the covert fingerprinting.

“Given the life-span of STB, it is but natural that in due course all STBs in the network will become compliant to both covert and overt fingerprinting. Therefore, to include any specific regulation for the same is redundant,” it stated.

After taking into consideration the comments received from the stakeholders and inhouse analysis, the authority finalised the Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) (Amendment) Regulations, 2019.

Scope of Audit

During the consultation process, a few stakeholders suggested some modifications to this clause. According to the suggestion, the annual Audit caused by the Distributor shall include the Audit to validate compliance with this Schedule and the Subscription Audit.

Keeping in view all the comments and suggestions received from the stakeholders on this clause, the authority is of the view that the annual Audit caused by Distributor shall include the Audit to validate compliance with this Schedule and the Subscription Audit.

Scheduling of Audit

The authority has decided that there should be a minimum and a maximum gap of 6 and 18 months respectively, between two annual audits caused by a DPO. The Authority is of the view that there should not be a gap of more than 18 months between audits of two consecutive calendar years.

Further, quite a few stakeholders have raised the issue that the authority should incorporate appropriate provisions for dealing with such DPOs who do not comply with regulatory provisions, especially when it comes to adherence to timelines. After due consideration, the Authority has prescribed levying of financial disincentives on the distributor of television channels for not causing an audit in a calendar year.

The financial disincentive is proposed on a graded scale. That is if the audit is not caused by the due date, then the distributor of television channels will be liable to pay an amount of rupees one thousand per day for the delay of the first thirty days.

In case of delay beyond thirty days, the financial disincentive will increase and will be @Rs. 2000/- per additional day beyond first thirty days. In addition, the Authority considers that the maximum financial disincentive may be restricted to an upper limit. Therefore, the Authority has prescribed a maximum limit of Rs 200,000 only per instance of violation/delay.

Transactional capacity of CAS and SMS systems

The TRAI has also decided that the CAS and the SMS should be able to activate or deactivate services or STBs of at least 5% of the subscriber base of the distributor within 24 hours.

The authority noted that while the requirement of the CAS and the SMS being able to activate or deactivate services or STBs of at least 10% of the subscriber base of the distributor within 24 hours seems reasonable, this puts an unwarranted investment on part of certain large DPOs.

It further stated that the issue becomes really alarming for most of the DTH service providers and the top four to five MSOs. Each one of these operators have a subscriber base of more than five million customers.

Fingerprinting – Support for Visible and Covert fingerprinting in STBs

The authority is of the view that the STB deployed after coming into effect of these Amendment regulations shall support the covert fingerprinting.

Based on industry information, it has been ascertained that not all the deployed STBs provide both types of fingerprinting. Before the Interconnection Regulations 2017, the STBs with overt fingerprinting would suffice to comply with the regulations.

Therefore, some of the distributors have represented that the STBs deployed prior to the year 2017 does not support covert fingerprinting as they were not mandated by The Telecommunication (Broadcasting and Cable Services) Interconnection (Digital Addressable Cable Television Systems) Regulations, 2012. The BIS standards also did not mandate both overt and covert fingerprinting.

Watermarking of Network Logo by the DPO

The authority is of the view that the encoders deployed after coming into effect of these Amendment regulations shall support the watermarking network logo for all pay channels at the encoder end.

The ‘watermarking’ logo can be inserted at the encoder end before combining of all the signals by a DPO. Alternatively, a DPO can introduce the ‘Watermarking’ through their middleware provided in the STB.

Many DPOs have requested TRAI that the ‘Watermarking’ network logo can be inserted by the encoder itself, only when the encoders have this feature. However, many of encoders deployed currently by such MSOs are part of their legacy system and do not have the provision for watermarking logo insertion.

Digital Rights Management (DRM)

The authority is of the opinion that system requirements for DRM shall be dealt with in a separate consultation paper. During the consultation process, the Authority received numerous comments and suggestions from various stakeholders on this issue. Numerous modification/additions were proposed by several stakeholders.

During its consultations on the Audit manual, the TRAI received the feedback that owing to its benefits the IPTV based DPOs are switching to DRM technology. It is necessary that the Audit regime covers the DRM based networks and provides for enabling provisions for such operators. Accordingly, Draft Regulations included DRM specifications in Schedule III.

Other issues

In addition to the amendments proposed in the Schedule III of the Interconnection Regulations, 2017 on issues related to scope and scheduling of audits, the transactional capacity of CAS and SMS system, covert fingerprinting, watermarking logo and DRM, the authority received a large number of comments from several stakeholders on other clauses of Schedule III.

Several stakeholders suggested modifications to other clauses of Schedule III. Suggestions were also received on additional clauses/ sections to be included in Schedule III.

The authority is of the opinion that most of these suggestions were related to the Audit process and have been discussed at length during the consultation process of the Audit Manual. Further, issues related to DRM need to be discussed during a separate consultation process. Other issues have been discussed pointwise in this Explanatory Memorandum.

In addition, a representation dated 20th September 2019 was received from Broadcast Engineering Consultants India Limited (BECIL), wherein they informed TRAI that the name of BECIL has not been mentioned in carrying out the audit under Section 15 of the Interconnection Regulations 2017 whereas regulation 10 of Interconnection Regulations 2017 mandates BECIL or any other empaneled agencies of TRAI to conduct the audit.

Accordingly, BECIL’s name has been included in regulation 15 for conducting technical as well as commercial audits under the new regime.

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