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HomeArticlesShows or Launch EventsTRAI’s Proposed Tariff for DAS leaves many gaps in the process
Thursday, 10 November 2016 05:56

TRAI’s Proposed Tariff for DAS leaves many gaps in the process

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The Telecom Regulatory Authority of India (TRAI) released a draft Telecommunication (Broadcasting and Cable Services) (Eighth) (Addressable Systems) Tariff Order, 2016 on 10 October 2016. The draft Tariff Order aims to create an enabling environment for orderly growth of the television broadcasting sector in the light of various developments related to technology, emergence of multiple distribution platforms, evolving business models, and enhanced addressability across platforms.

The regulator has done a comprehensive review of the existing tariff framework for the addressable systems and tried to evolve a tariff structure that enables the consumers with the freedom to choose from an array of attractive and affordable a-la-carte and bundled television broadcasting services as per their preferences and paying capacity.

While framing this draft Tariff Order, the TRAI has emphasized on transparency, non-discrimination, consumer protection and an enabling environment for orderly growth of the sector.

In the proposed draft TRAI has provided customers with adequate choice to select channels of their choice while ensuring transparency in the entire value chain. Salient features of the draft Tariff Order are:

• Broadcasters to declare maximum retail price (MRP) (excluding taxes) of their a-la-carte pay channels for subscribers.

• A broadcaster can also offer bouquet(s) for subscribers. However, MRP of such bouquet(s) of pay channels will not be less than 85% of the sum of maximum retail price of the a-la-carte pay channels forming part of the bouquet.

• Genre wise ceiling on MRP of channels have been prescribed. Sports channels have the maximum retail price (MRP) cap at Rs 19 and general entertainment channels have the highest price ceiling of Rs 12. Other ceilings are Movies- Rs 10, Kids- Rs 7, Infotainment- Rs 9, News- Rs 5 and Devotional Rs 3. Genres have been reduced from eleven to seven. These rates will not be changed for one year.

• Broadcasters can introduce ‘Premium’ channels which have no ceiling on MRP and will be offered to subscribers only on a-la-carte basis.

• Distributors of television channels permitted to form bouquets only from a-la-carte channels of broadcasters. However, retail price of such bouquet of pay channels will not be less than 85% of the sum of retail prices of the a-la-carte pay channels forming part of the bouquet.

• Separate bouquet for Pay and Free to Air channels

• Charges payable by a subscriber for network capacity and content have been separated.

• Monthly rental amount of maximum Rs. 130 (excluding taxes) per set top box, to be paid by the subscriber to the distributor of television channels for a capacity of 100 FTA SD channels. This is like the Basic Package in CAS.  

• Within the capacity of 100 SD channels, in addition to channels notified by the Central Government to be mandatorily provided to subscribers, a subscriber will be free to choose any free to air channel(s), pay channel(s), premium channel(s) or bouquet(s) of channels offered by the broadcasters or bouquet(s) of channels offered by the distributor of television channels.

• No separate charges, other than the rental amount, to be paid by the subscribers for subscribing to free to air channels or bouquet of free to air channels.

• The additional capacity, beyond initial one hundred channels capacity, can be availed by a subscriber in the slabs of 25 SD channels each, by paying an amount not exceeding Rs. 20/- per such slab, excluding taxes, per set top box per month.

• A subscriber can chose a-la-carte channels of its choice.

• A subscriber has to pay separate charges, other than the rental amount, for subscribing to pay channels or primuim channels or bouquet of pay channels.

• Distributors of television channels have to offer at least one bouquet, referred to as basic service tier, of 100 free to air channels including all the channels notified by the Central Government to be mandatorily provided to the subscribers.

• Any bouquet, formed by either the broadcaster or the distributor of television channels will not contain HD and SD variants of the same channel as well as any premium channel.

Some of the issues kept out of the regulatory regime include-

1. No regulation on the price of cloned channels or channels with old content already broadcast on the main channel.

2. There is no ceiling on number of pay channels owned by a media group. Thus large groups can exploit the market to any extent creating channels with old content, same channel in different languages or splitting one channel into two or more.

3. Pay per View content is not regulated as TRAI thinks it is too early to do that. 

4. There is no check on Media groups enjoying Significant Market Power through vertically integrated companies of DTH, OTT and MSO networks.

5. No regulations on content available on OTT platforms.

Also, there is no mechanism of checking the violations of these regulations. For example, regulations permit consumer to select all different hundred FTA channels to make his basic package but no MSO gives this power to the consumer and infect force a fixed basic package on them. TRAI does not have any inherent power to impose a heavy fine on a stakeholder violating these orders. Large media groups with vertically integrated companies owning many TV channels, MSO, OTT and DTH platforms, try to impose all their channels in the basic package getting maximum viewership whereas all other pay channels are offered as a-la-carte. All small suffer in this respect. 

Price limit on HD channels is three times their SD version price. This is unfair to the consumers as many SD channels have been created using technical conversion and not as original HD production. Moreover, since 4K, UHD, 3D and VR channels are already on the horizon, HD loses its importance as ‘premium’, to be priced three times of SD version.

Even the genre price caps do not distinguish between a popular channel and a not so popular channel. Both can be priced the same if owned by the same broadcaster and thrust upon the consumers through group owned distribution platforms. 

Considering the market already digitized, leaving no scope for any under-declaration, the pricing should have come down by 80% feel the cable operators who have to ultimately get the new tariff from the consumers. The proposed tariff will thus benefit only the broadcaster and not the consumer.

The Telecom Regulatory Authority of India (TRAI) released a draft Telecommunication (Broadcasting and Cable Services) (Eighth) (Addressable Systems) Tariff Order, 2016 on 10 October 2016. The draft Tariff Order aims to create an enabling environment for orderly growth of the television broadcasting sector in the light of various developments related to technology, emergence of multiple distribution platforms, evolving business models, and enhanced addressability across platforms. The regulator has done a comprehensive review of the existing tariff framework for the addressable systems and tried to evolve a tariff structure that enables the consumers with the freedom to choose from an array of attractive and affordable a-la-carte and bundled television broadcasting services as per their preferences and paying capacity. While framing this draft Tariff Order, the TRAI has emphasized on transparency, non-discrimination, consumer protection and an enabling environment for orderly growth of the sector. In the proposed draft TRAI has provided customers with adequate choice to select channels of their choice while ensuring transparency in the entire value chain. Salient features of the draft Tariff Order are: • Broadcasters to declare maximum retail price (MRP) (excluding taxes) of their a-la-carte pay channels for subscribers. • A broadcaster can also offer bouquet(s) for subscribers. However, MRP of such bouquet(s) of pay channels will not be less than 85% of the sum of maximum retail price of the a-la-carte pay channels forming part of the bouquet. • Genre wise ceiling on MRP of channels have been prescribed. Sports channels have the maximum retail price (MRP) cap at Rs 19 and general entertainment channels have the highest price ceiling of Rs 12. Other ceilings are Movies- Rs 10, Kids- Rs 7, Infotainment- Rs 9, News- Rs 5 and Devotional Rs 3. Genres have been reduced from eleven to seven. These rates will not be changed for one year. • Broadcasters can introduce ‘Premium’ channels which have no ceiling on MRP and will be offered to subscribers only on a-la-carte basis. • Distributors of television channels permitted to form bouquets only from a-la-carte channels of broadcasters. However, retail price of such bouquet of pay channels will not be less than 85% of the sum of retail prices of the a-la-carte pay channels forming part of the bouquet. • Separate bouquet for Pay and Free to Air channels • Charges payable by a subscriber for network capacity and content have been separated. • Monthly rental amount of maximum Rs. 130 (excluding taxes) per set top box, to be paid by the subscriber to the distributor of television channels for a capacity of 100 FTA SD channels. This is like the Basic Package in CAS. • Within the capacity of 100 SD channels, in addition to channels notified by the Central Government to be mandatorily provided to subscribers, a subscriber will be free to choose any free to air channel(s), pay channel(s), premium channel(s) or bouquet(s) of channels offered by the broadcasters or bouquet(s) of channels offered by the distributor of television channels. • No separate charges, other than the rental amount, to be paid by the subscribers for subscribing to free to air channels or bouquet of free to air channels. • The additional capacity, beyond initial one hundred channels capacity, can be availed by a subscriber in the slabs of 25 SD channels each, by paying an amount not exceeding Rs. 20/- per such slab, excluding taxes, per set top box per month. • A subscriber can chose a-la-carte channels of its choice. • A subscriber has to pay separate charges, other than the rental amount, for subscribing to pay channels or primuim channels or bouquet of pay channels. • Distributors of television channels have to offer at least one bouquet, referred to as basic service tier, of 100 free to air channels including all the channels notified by the Central Government to be mandatorily provided to the subscribers. • Any bouquet, formed by either the broadcaster or the distributor of television channels will not contain HD and SD variants of the same channel as well as any premium channel. Some of the issues kept out of the regulatory regime include- 1. No regulation on the price of cloned channels or channels with old content already broadcast on the main channel. 2. There is no ceiling on number of pay channels owned by a media group. Thus large groups can exploit the market to any extent creating channels with old content, same channel in different languages or splitting one channel into two or more. 3. Pay per View content is not regulated as TRAI thinks it is too early to do that. 4. There is no check on Media groups enjoying Significant Market Power through vertically integrated companies of DTH, OTT and MSO networks. 5. No regulations on content available on OTT platforms. Also, there is no mechanism of checking the violations of these regulations. For example, regulations permit consumer to select all different hundred FTA channels to make his basic package but no MSO gives this power to the consumer and infect force a fixed basic package on them. TRAI does not have any inherent power to impose a heavy fine on a stakeholder violating these orders. Large media groups with vertically integrated companies owning many TV channels, MSO, OTT and DTH platforms, try to impose all their channels in the basic package getting maximum viewership whereas all other pay channels are offered as a-la-carte. All small suffer in this respect. Price limit on HD channels is three times their SD version price. This is unfair to the consumers as many SD channels have been created using technical conversion and not as original HD production. Moreover, since 4K, UHD, 3D and VR channels are already on the horizon, HD loses its importance as ‘premium’, to be priced three times of SD version. Even the genre price caps do not distinguish between a popular channel and a not so popular channel. Both can be priced the same if owned by the same broadcaster and thrust upon the consumers through group owned distribution platforms. Considering the market already digitized, leaving no scope for any under-declaration, the pricing should have come down by 80% feel the cable operators who have to ultimately get the new tariff from the consumers. The proposed tariff will thus benefit only the broadcaster and not the consumer.

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