The implementation of DAS is under way in the country in a phased manner in four phases. Phase-1 and Phase-2 have been completed covering 42 cities of the country thereby migrating approximately 25% cable TV homes from analog cable TV systems to DAS. The sun set date for analog transmission in phase-3 and 4 areas are 31st December 2015 and 31st December, 2016 respectively. TRAI has notified a comprehensive regulatory framework for DAS regime encompassing interconnection regulations, QoS regulations, tariff orders and consumer complaint redressal regulations.
The interconnection regulation for DAS provides a framework for interconnection between Broadcasters & MSOs and MSOs & LCOs. Based on this framework, the service providers are required to enter into written interconnection agreement before providing signal of TV channels for re-transmission to subscribers.
The Telecommunication (Broadcasting and Cable Services) Interconnection (Digital Addressable Cable Television Systems) Regulations, 2012, dated 30.04.2012, as amended, provides that no MSO shall provide signal of TV channels to LCO without entering into a written interconnection agreement. The interconnection regulation further provides that the interconnection agreement between the MSO and its linked LCO shall have the details of various services rendered by the LCO to the MSO and the revenue settlement between the parties for these services. The Telecommunication (Broadcasting and Cable) Services (Fourth) (Addressable Systems) Tariff Order, 2010 (1 of 2010), dated 21st July 2010 provides that the charges payable by a LCO to a MSO shall be as determined by mutual agreement. In case the MSO and the LCO fail to arrive at mutual agreement, TRAI has mandated the subscription revenue share between the MSO and the LCO as a fall back arrangement.
During interaction with the stakeholders, TRAI was informed that the terms and conditions of the agreement offered by MSOs is one sided and do not provide a level playing field to the LCOs. Often the roles and responsibilities of both the parties for meeting the quality of service norms prescribed in the QoS regulation is not clearly defined in the interconnection agreement and due to which, in the event of dispute between the MSO and the LCO, the quality of service is adversely affected. The stakeholders wanted TRAI to lay down a Standard Interconnection Agreement (SIA) which can be entered into by MSOs and LCOs. This would help in reducing disputes between the MSO and the LCO and consequently help in increasing quality of service to the subscriber.
As there could be various relationship models between the MSOs and the LCOs, TRAI, while notifying the regulatory framework, in the year 2012, did not formulate SIA and left it to market forces. It was envisaged that this will provide enough flexibility to the stakeholders while transitioning from analog un-addressable systems to digital addressable systems. However, having considered the numerous representations from the stakeholders as well as to provide flexibility for accommodating various business models between MSOs and LCOs, TRAI has proposed to formulate a Model & Standard Interconnection Agreement after due consultation process with stakeholders.
The proposed draft consists of a Model Interconnection Agreement (MIA) and a Standard Interconnection agreement (SIA) in a single document namely draft model & standard interconnection agreement. The draft contains necessary terms and conditions, to ensure the compliance of the regulatory framework available for DAS and, to provide a level playing field to the MSOs and the LCOs. The draft agreement also lists roles and responsibilities as well as rights and obligations of each party separately.
In cases, where the revenue settlement is mutually agreed between the MSO and the LCO, the MIA part of the draft agreement would be applicable. In other cases where the revenue settlement could not be agreed mutually between the MSO and the LCO; and it is decided to continue relationship based on the fall back subscription revenue share arrangement as prescribed in the tariff order, the SIA part of the draft agreement would be applicable. Except clauses 10 to 12 of the proposed draft agreement, which relates to roles & responsibilities of the MSOs and the LCOs, billing, and revenue settlement, other clauses would remain same in the final Model and Standard Interconnection Agreement. In clause 10 of the proposed draft agreement, some of the roles have been clubbed together to assign common responsibility of these roles either to the MSO or to the LCO. Splitting of these roles may cause inconsistencies and gaps in delivery of satisfactory services to the consumers.
In case of the SIA, the responsibilities for various roles shall be fixed as per column 4 of the clause 10 of this draft agreement after considering the comments of the stakeholders. Similarly the billing and revenue settlement responsibilities shall also be fixed as per clause 11 and 12 respectively of this draft agreement after considering the comments of the stakeholders. Accordingly, all the terms and conditions of SIA which includes the revenue share settlement conditions also, shall be standardised after prescription of SIA. No additions, deletions, and or alteration would be permitted thereafter in SIA terms and conditions.
In case of the MIA, the responsibilities, for various roles to be finalised in clause 10 of this draft agreement, can be mutually agreed by the parties and recorded in writing in the column 3 of clause 10 of this draft agreement. In this case, column 4 of the clause 10 of this draft agreement would not be applicable. Similarly the billing and revenue settlement responsibilities shall also be agreed mutually as per clause 11 and 12 of this draft agreement respectively and recorded in writing in the agreement. No deletions, and or alteration would be permitted thereafter in MIA terms and conditions. However, the parties, through mutual agreement, may add certain additional terms and conditions subject to such terms and conditions does not dilute, override, and or alter the existing terms and conditions. In case of any conflict between the existing terms and conditions of the prescribed MIA, and new terms and conditions added through mutual agreement by the parties; the existing terms and conditions of the prescribed MIA shall prevail.
The existing regulation and tariff orders applicable for DAS may also require suitable amendments to incorporate necessary provisions relating to Model and Standard Interconnection Agreements between the MSO and the LCO.
Points put forward by COFI regarding Interconnection Issues between MSO and LCO to be resolved through a Standard Interconnect Agreement
1. The Model interconnection agreement must keep the status of LCOs in tact as owners of the last mile networks and not leave a chance for the MSOs to exploit them in any way and take over their networks by coercion.
2. As seen in the past, many MSOs who have strong political links, conspire with the local administration, not renew the yearly registration of LCOs given or with their money power influencing them an opportunity to cut of their signals on this pretext. There are hundreds of such cases reported to us from Punjab and other states.
3. The revenue share given to the LCOs, must have a minimum limit, enabling him to run his business with reasonable profit and providing quality of services, complying with the regulations. The fall back regulations must be reviewed by TRAI in this context. All the parameters of operating an LCO network of an average size are well known to TRAI.
4. Set-Top-Boxes procurement and supply is the sole responsibility of the MSOs. Keeping this in mind, there should be a well defined system of supplying the STBs to LCOs with proper documents like invoice, warranty or higher purchase agreement. There should be no opportunity for MSO to penalise an LCO if a subscriber STB does not function properly or becomes faulty and faulty STBs must be replaced immediately to avoid disruption in service.
5. Cases on non-payment by a subscriber due to any reason must be investigated by the MSO when brought to his notice by the LCO. Effort should be to retain the connection rather than disconnect at the first opportunity. In many cases MSOs who do not own the last mile, force the LCO to disconnect such subscribers.
All subscribers may not understand the implication of government directive of going digital and they may not like to pay more subscription due to:-
a) Cannot afford.
b) Subscribers TV set is old and does not give any benefit of digital Cable to him.
c) Subscribers does not get his choice of channels in the packages offered.
d) Subscriber only wants FTA channels and MSO does not offer the Rs 100 package.
In all such cases it is the LCOs who suffers both in business as well as goodwill. For an MSO, it is a new business, so he can afford to wait and watch but for an LCO it is a loss of subscriber and his business loss.
In many cases, MSOs do not listen to the problems put forth by the LCO and demand full payment of dues which is detrimental to LCOs business. Such cases must be avoided. 6. Interconnect agreements must bind MSOs and LCOs in a permanent or semi-permanent relationship so that together they move towards building a well integrated network providing all broadband services and not just 300-400 TV channels.
7. TRAI and MIB must accept only FTA cable operators or MSOs. Particularly in Phase-III and IV, many Cable Networks are running only FTA networks charging very low subscriptions. Interconnect agreement must contain a clause where this arrangement of providing only FTA package is mentioned.
Pay Broadcasters are forcing MSOs to include their pay channels in the basic package and MSOs charge Rs 150 or more for the lowest cost package that becomes unaffordable to many.