TRAI, after the implementation of the new regulations for tariff order for the broadcast industry, has now started the consultation process on regulations that will focus on norms for submitting information to the regulator on interconnection agreements by broadcasters, MSOs and DTH companies. 13 May 2019 was the last date to send comments and 20 May 2019 for counter comments.
The regulation focuses on the technical and commercial agreements, which are signed between broadcasters and service providers to provide broadcasting services to subscribers.
TRAI said: “The objective of this draft regulation is to ensure that all the interconnection agreements are filed by every broadcaster, and the distributor of television channels (with average active subscriber base of its entire distribution network equal to or more than two lakh).”
TRAI believes that the interconnection regulations will set the framework and procedures of a reporting system, so that service providers can report information regarding their interconnection agreements to TRAI.
TRAI said: “It would enable the Authority to maintain register of interconnect as per provisions of TRAI Act. The existing regulation mandates broadcasters of pay TV channels, DTH operators, HITS operators and IPTV operators to annually report to the Authority information relating to the interconnection agreements.”
It will simplify the process of reporting, avoid duplication of reports and formulate views on accessibility of register’s information.
Also, TRAI has also proposed levying of financial disincentives on broadcasters or cable TV and DTH companies who delay in submitting the requisite information within the stipulated time.
The interconnection between service providers is a technical arrangement under which service providers connect their equipment and networks to enable subscribers to have access to the services. Accordingly, the Authority had put in place regulatory framework for interconnection by making the Telecommunication (Broadcasting and Cable Services) Interconnection Regulations, 2004 dated 10th December 2004 and the Telecommunication (Broadcasting and Cable Services) Interconnection (Digital Addressable Cable TV Systems) Regulations, 2012 dated 30th April 2012.
Based on this framework the broadcaster or distributor of television channels finalize the commercial and technical terms and conditions to arrive at an agreement. Under the existing interconnection regulatory framework broadcasters are required to provide the signals of TV channels to the distributors of TV channels on non-discriminatory terms. Similarly, distributors of television channels are also required to provide access to their networks to the broadcasters on non-discriminatory terms.
Reporting on information:
TRAI said in its regulations: “Every broadcaster, through its compliance officer, shall report to the Authority, the information relating to all the interconnection agreements of its pay and FTA channel or modifications or amendments.”
It added: “Every distributor of television channels, whose average active subscriber base of its entire distribution network (including joint venture(s), if any) in the month of March of that year is equal to or more than two lakhs (Two hundred thousand), shall through its compliance officer, report to the Authority, the information relating to all interconnection agreements or modifications or amendments.”
On manners of filing data, TRAI said: “The Authority may from time to time specify through a direction, the manner of filing of data or information (including but not limited to online submission through or without a portal), the form or formats of filing, the copies of interconnection agreements, any additional requirements and other procedural aspects connected and incidental to the filing of details of interconnection agreements.”
Fee due to delay in reporting:
a) An amount of rupees one thousand per day for up to thirty days beyond the date specified in regulation
(b) additional amount of rupees two thousand per day in case the default continues beyond thirty days from the due date, as the Authority may, by order, direct. Provided that the cumulative financial disincentive levied by the Authority under this sub-regulation shall in no case exceed Rupees Two Lakhs (Rs. Two hundred thousand).
Compliance officer’s duty:
(1)The compliance officer shall be responsible for—
(a)reporting to the Authority, with respect to compliance with these regulations and directions of the Authority issued under these regulations; and
(b) ensuring that proper procedures have been established and are being followed for compliance of these regulations.
(2) The provisions contained in the sub-regulation (1) above shall be in addition to the liability of the broadcaster or distributor of television channels to comply with the requirements laid down under these regulations.
The salient features of the new regulatory framework:
a) Every broadcaster is required to declare the maximum retail price (MRP) of its pay channels on a-la-carte basis. However, such MRP shall be uniform for all types of addressable systems.
b) Every Broadcaster must declare a distribution fee at a minimum of 20% of the MRP of pay channel or bouquet of pay channels which can be upto 35%.
c) In addition to the distribution fee, Broadcasters may offer discounts to distributors which cannot exceed 15% of the MRP of pay channels or bouquet of pay channels. However, in no case, the sum of distribution fee declared by a broadcaster and discounts offered can exceed 35% of the MRP of pay channel or bouquet of pay channels, as the case may be.
d) Every broadcaster should publish, on its website, the Reference Interconnection Offer (RIO) containing the information such as MRP of its pay channels and bouquet of pay channels, distribution fee, discounts etc.
e) Every broadcaster is required to enter into written interconnection agreements on the basis of the RIO published by it for providing signals of pay channels to a distributor of television channels.
f) Similarly, every distributor of television channels is required to publish RIO on its website for carrying a channel on its distribution network. Such RIO must necessarily contain the information such as target market, rate of carriage fee, manner of calculation of carriage fee etc.
g) The rate of carriage fee has been capped at Re. 0.20 per Standard Definition channel and Re. 0.40 per High Definition Channel. The manner of carriage calculation is as prescribed in the regulations. The distributor can offer a discount on the carriage fee. However, such discount cannot be more than 35%.
h) Every distributor is required to enter into written agreement, on the basis of its published RIO, with the broadcaster for carrying television channels in respect of which the request has been received from such broadcasters.
i) Any other kind of fee for a channel such as marketing fee, placement fee etc, between two service providers should be made part of interconnection agreement and reported to the Authority.
j) Some distributors (for example Multi-Service Operators) provide the Broadcasting Service through LCOs. For such distributors it is mandatory to enter into a written agreement before providing the signals. Such interconnection agreement must comply with the standard provisions as per the Model Interconnection Agreement (MIA)/Standard Interconnection Agreement (SIA) as prescribed by the Authority.