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HomeArticlesRegulationsHotel Industry Worries About Commercial Tariffs
Wednesday, 21 June 2006 00:00

Hotel Industry Worries About Commercial Tariffs

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TRAI released a Consultation Paper on Issues relating to Commercial Tariff on 21st April, 2006. This Consultation Paper deals with the issue of commercial tariff for broadcasting and cable television services. The Tariff Order dated 1.10.2004 did not distinguish between commercial and other services. While dealing with a batch of petitions filed by the Hotel and Restaurant industry, the TDSAT in its judgment dated January 17, 2006 concluded that the Tariff Order does not cover commercial Services. Accordingly after careful examination TRAI decided as an interim measure to amend the Tariff Order and provide for a ceiling for commercial tariff also. This ceiling was fixed as the tariff as on March 1, 2006. This Tariff Order was issued on March 7, 2006.

Prior to issue of this Paper, consultation with the hotel and restaurant industry as well as with broadcasters had been held. Inputs received during this interaction have been included in the Consultation Paper.

3.The major issues that require to be decided upon are the following:­

(i) Should tariffs for commercial purposes be fixed or not?

(ii) If so how should commercial consumers be defined and differentiated from non-commercial consumers?

(iii) If commercial tariffs are to be fixed what should be the methodology?

On this various groups including Hotels & Restaurants association, Broadcasting, Cable Operators, and MSO Alliance filed their replies. But the main question remains as it is. Should there be a seperate tariff for domestic as well as commercial customers?

Hotel industries said that the definition contained in the Tariff Amendment Order of 7th March 2006, should not be allowed to continue for the reasons, among others, that the TDSAT Order of 17th January, 2006, ruling that Hotels and Restaurants are neither subscribers nor consumers, has already been challenged by the Association, and the Supreme Court has already admitted the same. According to them Hotels and Restaurants do not deal in the signals telecast by the Broadcasters. No where in the world there is a concept of commercial cable subscriber and India need not go in for such a concept. The Broadcasters can introduce pay channels by providing the requisite technology to their consumers.

The MSOs felt that due to imperfect scenario and lack of regulatory mechanism in place, the broadcasters have always succeeded till 2004 or thereabout, when TRAI was appointed as a Regulator for the cable and broadcasting services. It is submitted that even in 2004, the broadcasters have never insisted for different tariff/charges for supply of signals to the Hotels, Hospitals etc. as a separate class of subscribers except in agreements. All the payment negotiations to the pay broadcasters were inclusive of payment for the supply of signals to all class of subscribers including Hotels, Hospitals, and Commercial Customers etc. It is only consequent to the First Tariff Order dated 15th January 2004, which froze the cable charges with effect from 26th December 2003, the Broadcasters started scouting for additional revenue streams and approached and / or insisted Hotels etc. to enter into a separate agreement for receipt of signals from the cable operators failing which the broadcasters have threatened to take criminal action under the Copyright Act, 1957. If this happens, it would lead to more chaos and conflicts, opined MSO Alliance.

On distinguishing various commercial organisations who should pay the commercial tariff the MSO. Alliance replied that till the time the full addressability is in place, to begin with, the Commercial Cable Subscribers should include only 5 Star Hotels. Those who are not commercially exploiting the signal should be kept out of purview of commercial subscribers such as hospitals, educational institutions, charitable organizations, petty shopkeepers, office establishments etc.

Federation of Hotel and Restaurant Association of India (FHRAI) commented that TRAI was already regulating the tariff in respect of telephones and telecommunication services without any distinction between a domestic and the so called commercial consumer. However, Bharat Sanchar Nigam Ltd. is charging a separate nominal annual licence fee for EPABX in case of Hotels for telephone lines extended to rooms. Protection must be extended to all such commercial consumers who are paying the cable operator. It is in the domain of the broadcaster and the cable operator as to how they resolve their disputes inter-se and a commercial consumer should not be penalized or made to pay to two persons for the same service.

The matter has become more complicated with contradictory comments on the subject from the stake holders. In the North East, hoteliers feel there should be no additional tariff as they merely survive with any tourist inflow in the region. The situation has become so bad that some hoteliers have started getting heavy bills directly from the broadcasters while the feed is given by the Cable Operator/MSO.

While giving these notices for escalated bills, broadcasters have also threatened that not paying these bills would amount to contempt of court as the court has already sanctioned payment to the copyright owner’s for music and TV programmes run in the premises of Star and classified hotels.

However Industry experts feel that CAS can solve the problem once for all as each programmes that are watched as it is done in the developed countries. 


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