LCOs in Kolkata have joined together against the MSOs for their unfair deals in revenue sharing.
This was expected as TRAI very smartly had avoided interconnect regulations on revenue share and left it on negotiated deals between MSOs and LCOs. This was bound to fail as no negotiations in the industry have succeeded since 1994 when pay channels and MSOs entered the market. LCOs always have the fear that big MSOs supported by pay broadcasters will push them out of the industry.
The Supreme Court gave a significant ruling that no broadcaster can appoint a Multi System Operator (MSO) as its exclusive agent for distribution of its channels to other MSOs. This verdict came on 3rd April 07 soon after Star India Pvt. Ltd.'s civil appeal to the Apex Court challenging Telecom Disputes Settlement & Appellate Tribunal's (TDSAT) decision given on 24.8.2005 ordering Star India to supply signals of its bouquet of channels by entering into an agreement with Sea TV Network Ltd, an MSO in Agra (UP).
Telecom Regulatory Authority of India (TRAI) in a landmark ruling said that the Rs77 paid by subscribers for watching FTA channels would remain entirely with the Local Cable Operators (LCOs). This decision was a consequence of the comments of various stakeholders that TRAI had sought in its consultation paper on review of Revenue Sharing Formula for service providers in CAS notified areas. This paper asked for comments in relation to deciding the share of Multi System Operators (MSOs) and LCOs out of the basic service tier fee and out of the 55% of the subscription charges for pay channel distribution.
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