TV broadcast industry welcomes SC verdict in Star vs. TRAI case

MUMBAI: The TV broadcasting industry has welcomed the Supreme Court’s decision to uphold the Telecom Regulatory Authority of India’s (TRAI) tariff order and interconnection regulation.

The All India Digital Cable Federation (AIDCF) has said that the apex court decision paves the way for a new era in the broadcasting sector and also the end of a long wait for the new framework to finally get effectuated.

It further stated that most service providers have already started working towards meeting the timelines as specified by TRAI in their circular dated 3rd July 2018.

AIDCF president Rajan Gupta said, “This is the watershed moment we have all been waiting for. We feel that the new framework will bring in much needed transparency, parity, promote exercising of choice for the consumer and ensure orderly growth of the sector. The onus is now on all service providers to put their best foot forward and keep consumer interest in mind by complying with the required initial timelines and activities at the earliest.”

TRAI chairman RS Sharma tweeted that the SC has delivered a historic judgement which will bring choice and transparency for the customers. “Historic judgement! A big win for consumers, their choice and transparency!!” Sharma tweeted.

Essel Group and ZEEL chairman Subhash Chandra said, “I am extremely glad to note the Supreme Court’s order and I think it is the best thing that could have happened to the industry, the players in the value chain and the consumers at large. We at ZEE & Essel Group have always focused on keeping our consumers as our first priority and I am very glad that the Supreme Court’s order has empowered the consumers across the nation.

“While the overall media & entertainment landscape has been evolving at a rapid pace, it is for the first time in 26 years that such a strong & positive step has been taken to eradicate the lack of transparency in the entire value chain of the broadcast & cable industry. It will certainly help the LCOs, MSOs and the Broadcasters.”

The TRAI’s tariff order has fixed a uniform maximum retail price for each TV channel at Rs 19. The authority has stipulated that a television channel, which is individually priced at more than Rs 19/- cannot be included in a bouquet and can only be offered on an individual/ a-la-carte/ stand-alone basis.

The price of a bouquet of television channels shall not be less than 85% of the sum of a-la-carte prices of television channels comprised in the bouquet.

The sum of discount on television channels and the distribution fee paid by broadcasters to a distributor of television channels, cannot exceed 35% of the maximum retail price of the television channel.

Television channels cannot be priced differently for different distribution platforms. Channels of one broadcaster cannot be offered by another broadcaster in their bouquet of television channels, even after obtaining due authorisation.

Promotional schemes: (i) can only be offered on a-la-carte prices for offering television channels and not on bouquet prices, (ii) cannot exceed 90 days at a time, and (iii) can be offered only twice in a year.

High definition (HD) and standard definition (SD) channels cannot be in the same bouquet of television channels. Similarly, pay channels and free to air (FTA) channels cannot be in the same bouquet.

In the interconnection regulation, the regulator has capped the carriage fees for D channels at 20 paisa per channel per subscriber per month and 40 paisa for HD channels.

Another key provision in the regulation is the prescription of a revenue share of 55:45 between multi system operators (MSOs) and local cable operators (LCOs) for the network capacity fee in case they fail to arrive at a mutual agreement.

Broadcasters will not have to pay carriage to distribution platform operators (DPOs) for a channel if it is subscribed by 20% or more subscribers in a target market.

For channels with a subscription of 5% or less the carriage payable will be equal to the rate of carriage fee per channel per subscriber per month. If the subscription of the channel is more than 5-10% then the carriage fee will be 0.75 times of the rate of carriage fee of active subscriber base of the DPO.

The carriage fee for channels with subscription between 10-15% will be 0.5 multiplied the rate of carriage fee. Channels that have been subscribed by 15-20% of the DPOs subscriber base in a target market will have to pay carriage at the rate of 0.25 x rate of carriage fee.

On the lines of ‘must provide’ clause for broadcasters, the authority has also made it obligatory for DPOs to carry the channels of broadcasters through a ‘must carry’ clause on first come first serve basis. For spare capacity, DPOs have an obligation to allocate every alternate channel capacity in sequential manner from the pending list.

In order to ensure that DPOs are not forced to carry non-popular channels, the authority has allowed to DPOs to discontinue a TV channel that has less than 5% subscription in the relevant geographical area in preceding six consecutive months. The DPO, in its discretion, could refuse to grant further access to the channel for a period of one year.

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