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Tuesday, 12 November 2019 05:07

IBF urges TRAI not to go ahead with CP on placement, marketing agreements between broadcasters, DPOs

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In response to the consultation paper ‘Issues related to Interconnection Regulation 2017, the Indian Broadcasting Foundation (top body of pay-TV broadcasters) has requested the Telecom Regulatory Authority of India (TRAI) not to go ahead with a consultation process on issues related to placement, marketing and other agreements between broadcasters and distribution platform operators (DPOs).

It said that these agreements are beyond the scope of the authority’s jurisdiction under the provisions of the Telecom Regulatory Authority of India Act, 1997. IBF added added hat the manner of marketing, promotion, advertising and the general business mechanics of broadcasters and DPOs are not matters related to interconnection, hence they cannot be subject to regulation under the TRAI Act. 

The submission read: “Therefore, the Authority ought not to regulate aspects of the broadcaster-DPO relationship that do not relate to the distribution of signals of television channel and/ or its subscription inter-alia since, the same would not qualify as ‘interconnection’.

As per IBF, an agreement qualifies as an interconnection agreement only if it contains (a) technical terms; (b) commercial terms; and (c) conditions for distribution of television channels. Thus, any arrangement between a broadcaster and DPO that is not conditional on distribution of television channels of a broadcaster on a DPO’s network is not an “interconnection agreement”.

The Foundation submitted that the demand for regional channels may not be restricted only to the states where a particular language is predominantly spoken as demand for all kinds of channels, including niche and regional channels, is determined per the choice of the consumers across India.  

It added that the broadcaster is in the best position to determine its own target market, keeping in mind the kind of content being programmed for the TV channels. It submitted that carriage fees should not be permitted to continue in the DAS regime since bandwidth constraints cannot be an excuse for DPOs to seek rental arbitrage.

The IBF added: “The authority has already provisioned NCF at Rs. 130 per STB in order to address recovery of capacity cost as well as 20% dealer commission per channel per month for any other overheads associated with DPO operations. Hence we find it unnecessary to address the issue of capping Carriage Fee.”

IBF also said that it may be feasible to determine the cost of carrying a channel by working out the capital and operational cost of the DPO’s network. “An endeavour may be made to consider – cost attributable to the one-time establishment, and recurring costs with respect to maintenance/upkeep of the systems, operational issues and retransmission of channels.”

According to IBF, TRAI should do away with the requirement of having 5% subscriber for getting carried on a DPO platform since niche channels may be prone to being leveraged by DPOs due to low subscriptions.

It opined that notwithstanding the size of the viewership of a TV channel, where there is a demand and any viewership, the viewing subscribers should have the flexibility and opportunity to watch the channel of their choice.

IBF said: “A new channel launched takes time to pick up and be viewed/used by the subscribers/consumers at large, therefore, a channel should be carried irrespective of the percentage of subscribers viewing it. Further, the focus should on capacity building of DPOs without undermining the integrity of systems.”

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