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HomeArticlesRegulationsTRAI Gets SC Nod to Notify Tariff Order
Friday, 10 March 2017 06:13

TRAI Gets SC Nod to Notify Tariff Order

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Broadcasters cannot be allowed to have a free hand on pricings   

Private broadcasters often give examples of Taiwan, South Korea and the US which have lifted the government control of tariff regime of television channels, and they call India the last country to still wield a power in deciding what the broadcasters should charge from the viewers. But the private broadcasters ignore the fact that India, unlike these developed countries, has 70 per cent poor population which cannot pay high rates for watching their favourite channels. Our rates should be commensurate with our economy.

So, lifting the status quo imposed upon TRAI by the Madras High Court, the Supreme Court has now allowed the telecom regulator TRAI to notify its tariff order and interconnect regulations for the broadcasting segment.  The Supreme Court gave a breather to the broadcasters as whilst allowing TRAI to do so, the apex court said, “Any new cause of action arising from notifying the regulation can be taken up before the high court.” 

Features of New Tariff

The new tariff framework notified by TRAI is aimed to bring in more transparency, protect viewers’ rights, encourage level playing field and strengthen the sector. The salient features of the new tariff order are: 

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

A broadcaster can also offer bouquet(s) of its pay channels and declare MRP (excluding taxes) of 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.

Separate bouquet for Pay and Free to Air channels.

Charges payable by a subscriber for distribution network capacity and channels have been separated.

The distribution network capacity required for initial 100 Standard Definition (SD) cannels can be availed by a subscriber after paying an amount, not exceeding `130 (excluding taxes) per month to the distributor of TV channels.

Within the capacity of 100 SD channels, apart from the channels to be mandatorily provided by the Central Government, 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 or a combination thereof.

No separate charges, other than the Network Capacity Fee, 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 100 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 month.

Every distributor of television channels shall offer all channels available on its network to all subscribers on a la-carte basis.

Every distributor of television channels shall declare distributor retail price of each pay channel and bouquet of pay channels payable by a subscriber.

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

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

A subscriber has to pay separate charges, other than the Network Capacity Fee, for subscribing to pay 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 mandatorily channels to be provided to the subscribers as notified by the Central Government. This bouquet will be one of the options available for subscription to customers. It will be the subscriber who will be free to exercise his option.

Any pay channel having a la-carte MRP of more than ` 19 per month (excluding taxes) shall not form of any bouquet either by the broadcaster or by the distributor of television channels.

 Any bouquet formed either by the broadcaster or by the distributor of television channels shall not contain both HD and SD variants of same channels.  

Earlier, Star and Vijay TV had challenged TRAI’s powers to fix price of content. They contended that TRAI has no jurisdiction to cap the prices and hence violated the Copyright Act; it also affects the monetization of their content, they argued. 

In October 2016, the draft order was issued by TRAI which proposed a distribution model for TV channels. According to this order, broadcasters could fix the maximum retail price (MRP) within the price cap set by TRAI for selling directly to the subscribers. The price cap order also included the high-definition (HD) channels whilst the premium channels have been excluded from price cap under the proposed new tariff order. 

In the present Tariff order there is no genre wise tariff. All channels forming part of a bouquet will have a price ceiling at ` 19 in a-la-carte mode. Any channel priced more then ` 19 cannot form part of a bouquet. TRAI had given genre wise pricings in its previous tariff order that has been got rid off.

Broadcasters want price freedom

Broadcasters want freedom to price their channels. Their contention is that since pricing at retail level is with distributors of TV channels, the flexibility to maximise the revenue through advertisement and subscription fee has been compromised. News broadcasters, who primarily provide free-to-air (FTA) channels and have advertisements as only source of revenue, claim that many a time their channels at retail level are priced in such a manner that even pay channels are cheaper than their FTA channels. 

Due to no effective and comprehensive tariff regime, subscribers feel that the pricing of channels is skewed and lacks transparency and questions are also raised about different pricing of the same channel by different operators. The new price order tries to make the entire pricing framework transparent and user-friendly. 

Consumers must have a-la-carte rights

While prescribing the new regulatory framework, TRAI has kept in mind the discussions in the Parliament on the motion for consideration of the Cable Television Networks (Regulation) Amendment Bill, 2011, wherein the then minister of information and broadcasting stated that TRAI would establish a system wherein consumers would be free to choose a la-carte channels of choice and they would not be required to subscribe to bouquets. 

While framing this tariff order, the emphasis of TRAI has been to ensure transparency, non-discrimination, consumer protection and create an enabling environment for orderly growth of the sector. The new tariff framework attempts to address all the issues raised by broadcasters, distributors of television channels and subscribers. The broadcasters have to declare their channels as ‘Pay’ or ‘Free-to-Air’ (FTA). Broadcasters have been given flexibility to declare maximum retail price (MRP) of their pay channels to their subscribers with no restrictions as long as such channels are provided to consumers individually.  

Overall this is a very balanced move which takes care of the interests of all stakeholders, and broadcasters have now no valid reason to oppose the new tariff order. They should not forget that they are operating in a country which cannot afford to leave its poor people’s fate in the hands of the private players and foreign investors particularly when it is these poor households who have given such a vast reach to these broadcasters hooking on to thousands of small cable TV networks all across the nation. Regulatory control is needed to safeguard the consumers’ interests and maintain transparency.   

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