TRAI to now receive stakeholder comments on TV tariff issue till March 11

The Telecom Regulatory Authority of India (TRAI) has extended the last date for receiving written comments and counter-comments from the stakeholders regarding pricing of TV services to March 11, 2016 and March 25, 2016, respectively.

TRAI had issued a Consultation Paper on ‘Tariff issues related to TV services’ on January 29, 2016 inviting written comments from the stakeholders by March 4, 2016 and counter-comments from the stakeholders by March 18, 2016.

Tariff issues related to TV services

Ever since the regulation of Broadcasting and Cable Services (B&CS) sector came under the ambit of TRAI, various interventions on pricing of services both at the wholesale and retail levels have been done to address specific issues, while adopting a balanced approach towards growth of the sector and protection of consumer interests. The sector has come a long way since 2004.

Broadcasters feel that the business model prevalent at present is not conducive to growth. They are very critical of the price cap prescribed by TRAI in 2004. As per them, the present regulatory framework has not supported innovations in content production and due to such restrictive approach the content quality has been degrading gradually. In support of their argument they indicate limited availability of niche channels.

Delivery Platform Operators (DPOs) are of the opinion that the present business model does not ensure non-discrimination and fair play. As per them, the price of the pay channels is increasing but revenue realisation from the ground remains low. DPOs indicate that large gap between RIO and mutually agreed price compel them to sign and pay for all channels of a particular broadcaster irrespective of the subscribers choice.

There are number of disputes regarding interconnect agreements between broadcasters and DPOs and also between DPOs and local cable operators.

The customers are of the opinion that though the digitalization has increased number of channels and improved Quality of Service (QoS) but choice of channels and accordingly control in their hand to budget their expenses is still missing. Even now, in real sense, subscribers are indirectly forced to choose large bouquets only. Wherever a-la-carte channels are being provided, the cost of such channels is exorbitantly high and it indirectly forces them to accept large bouquets.

According to TRAI, in such a scenario, there is a need to holistically re-examine the existing business model of digital addressable TV broadcasting sector and accordingly transform existing regulatory framework, including tariff orders. This should be able to address the concerns of various stakeholders in the value chain, enhance the growth of the sector and protect the interests of the consumers.

As per prevailing business model, tariff is regulated at wholesale and retail levels independently. TRAI has asked stakeholders, who prefer separate tariff models at wholesale and retail levels just like the existing regulatory framework may suggest a suitable pair of wholesale and retail model. Similarly, the stakeholders, who prefer integrated tariff model, may suggest an integrated model.

Issues for consultation

• Which of the price models discussed in consultation paper would be suitable at wholesale level in broadcasting sector and why? You may also suggest a modified/ alternate model with detailed justifications.

• Which of the corresponding price models discussed in consultation paper would be suitable at retail level in broadcasting sector and why? You may also suggest a modified/ alternate model with detailed justifications.

• How will the transparency and non-discrimination requirements be fulfilled in the suggested pair of models? Explain the methodology of functioning with adequate justification.

• How will the consumers interests like choice of channels and budgeting their expenses would be protected in the suggested pair of models? Give your comments with detailed justifications.

• Which of the integrated distribution models discussed in consultation paper would be suitable and why? You may also suggest a modified/ alternate model with detailed justifications.

• How will the transparency and non-discrimination requirements be fulfilled in the suggested models? Explain the methodology of functioning with adequate justification.

• How will the consumers interests like choice of channels and budgeting their expenses would be protected in the suggested integrated distribution models? Give your comments with detailed justifications.

• Is there a need to identify significant market powers?

• What should be the criteria for classifying an entity as a significant market power? Support your comments with justification.

• Should there be differential regulatory framework for the significant market power? If yes, what should be such framework and why? How would it regulate the sector?

• Is there a need to continue with the price freeze prescribed in 2004 and derive the price for digital platforms from analog prices? If not, what should be the basic pricing framework for pricing the channels at wholesale level in digital addressable platforms?

• Do you feel that list of the Genres proposed in the consultation paper (CP) are adequate and will serve the purpose to decide genre caps for pricing the channels? You may suggest addition/ deletion of genres with justification.

• Is there a need to create a common GEC genre for multiple GEC genre using different regional languages such as GEC (Hindi), GEC (English) and GEC (Regional language) etc? Give your suggestions with justification.

• What should be the measures to ensure that price of the broadcast channels at wholesale level is not distorted by significant market power?

• What should be the basis to derive the price cap for each genre?

• What percentage of discount should be considered on the average genre RIO prices in the given genre to determine the price cap?

• What should be the frequency to revisit genre ceilings prescribed by the Authority and why?

• What should be the criteria for providing the discounts to DPOs on the notified wholesale prices of the channels and why?

• What would be the maximum percentage of the cumulative discount that can be allowed on aggregated subscription revenue due to the broadcasters from a DPO based on the transparent criteria notified by the broadcasters?

• What should be parameters for categorization of channels under the “Niche Channel Genre”?

• Do you agree that niche channels need to be given complete forbearance in fixation of the price of the channel? Give your comments with justification.

• What should the maximum gestation period permitted for a niche channel and why?

• How misuse in the name of “Niche Channel Genre” can be controlled?

• Can a channel under “Niche Channel Genre” continue in perpetuity? If not, what should be the criteria for a niche channel to cease to continue under the “Niche Channel Genre”?

• How should the price of the HD channel be regulated to protect the interest of subscribers?

• Should there be a linkage of HD channel price with its SD format? If so, what should be the formula to link HD format price with SD format price and why?

• Should similar content in different formats (HD and SD) in a given bouquet be pushed to the subscribers? How this issue can be addressed?

• Do you agree that separation of FTA and pay channel bouquets will provide more flexibility in selection of channels to subscribers and will be more user friendly? Justify your comments.

• How channel subscription process can be simplified and made user friendly so that subscribers can choose channels and bouquets of their choice easily? Give your suggestions with justification.

• How can the activation time be minimized for subscribing to additional channels/bouquets?

• Should the carriage fee be regulated? If yes, what should be the basis to regulate carriage fee?

• Under what circumstances, carriage fee be permitted and why?

• Is there a need to prescribe cap on maximum carriage fee to be charged by distribution platform operators per channel per subscriber? If so, what should be the “price Cap” and how is it to be calculated?

• Should the carriage fee be reduced with increase in the number of subscribers for the TV channel? If so, what should be the criteria and why?

• Should the practice of payment of placement and marketing fees amongst stakeholders be brought under the ambit of regulation? If yes, suggest the framework and its workability?

• Is there a need to regulate variant or cloned channels i.e. creation of multiple channels from similar content, to protect consumers’ interest? If yes, how should variant channels be defined and regulated?

• Can EPG include details of the program of the channels not subscribed by the customer so that customer can take a decision to subscribe such channels?

• Can Electronic Program Guide (EPG) include the preview of channels, say picture in picture (PIP) for channels available on the platform of DPOs but not subscribed by the customers at no additional cost to subscribers? Justify your comments.

• Is the option of Pay-per-program viewing by subscribers feasible to implement? If so, should the tariff of such viewing be regulated? Give your comments with justification.

• Will there be any additional implementation cost to subscriber for pay-per-view service?

• Do you agree with the approach suggested in para 5.8.6 for setting up of a central facility? If yes, please suggest detailed guidelines for setting up and operation of such entity. If no, please suggest alternative approach(s) to streamline the process of periodic reporting to broadcasters and audit of DPOs with justification.

• Stakeholders may also provide their comments on any other issue relevant to the present consultation.