Conform to Tariff Order on CPS agreements: TRAI directs broadcasters

The Telecom Regulatory Authority of India (TRAI) has directed all broadcasters of pay channels to strictly comply with the provisions of clause 3C of Tariff Order, 2004 and clause 4 of the Tariff Order, 2010 at the time of providing signals of TV channels including in terms of cost-per-subscriber (CPS) agreements. This has been done to protect the interests of service providers and consumers.

TRAI pointed out that since in the CPS agreements, an assortment of distinct channels is being offered together as a group or as a bundle, it is nothing but a bouquet of channels.

Clause 3C of the Tariff Order, 2004, states that: “Every broadcaster shall offer or cause to offer on non-discriminatory basis all its channels on a-la-carte basis to the multi system operator or the cable operator and specify an a-la-carte rate for each pay channel offered by him.”

Meanwhile, as per sub-clause 2 of clause 4 of the Tariff Order, 2010: “In case a broadcaster, in addition to offering all its channels on a-la-carte basis, offers pay channels as part of a bouquet consisting only of pay channels or both pay and free to air channels, such broadcaster shall specify the rate for each such bouquet of channels offered by it.”

On examination of the information relating to the interconnection agreements filed by the broadcasters under the Register of Interconnect Regulations, 2004, TRAI noted that in many cases the agreements are signed in the name of CPS deals between the broadcasters and distribution platform operators for offering of channels of the broadcasters in different formations, assemblages and bouquets for a group or a bundle of channels.

The Authority, vide its letter dated December 1, 2015 asked the broadcasters to clarify the exact nature of CPS agreements being executed with different distribution platform operators and also explain how CPS agreements complied with the existing regulatory framework, including the provisions of clause 3C of Tariff Order, 2004.

The broadcasters in their response stated that CPS-based agreements were purely mutually negotiated interconnection agreements and could not be construed as bouquet of channels and hence, did not fall within the realm of a-la-carte or bouquet offerings and thus, did not contravene the provisions of clause 3C of Tariff Order, 2004.

However, after examining the provisions contained in sub-clauses (2) and (3) of clause 3C of the Tariff Order, 2004 and the definition of bouquet or bouquet of channels in the Tariff Order, 2010, the Authority concluded that since in the CPS agreements an assortment of distinct channels is being offered together as a group or as a bundle in the CPS agreements, it is nothing but a bouquet or bouquet of channels.