TRAI plans common interconnection framework for broadcasting sector

| | Updated on: Nov 01, 2016
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Move will bring in transparency in content pricing, carriage charge payment

The Telecom Regulatory Authority of India (TRAI) has proposed common interconnection framework for broadcasters such as Direct to Home (DTH), Head-end In the Sky (HITS), Digital Addressable Cable TV Systems (DAS) and Internet Protocol Television (IPTV). This comes even as the final phase of DAS is slated to be implemented by January.

The move will enable transparency in content pricing and payment of carriage charge besides ensuring various stakeholders get their rightful share of subscription revenues, according to broadcasters and analysts.

TRAI issued the new draft paper last week. It has sought stakeholder view on the same by November 15. TRAI said the idea to bring a draft is to provide transparency, non-discrimination and non-exclusivity are other key areas of debate which it seeks to protect.

Level-playing field

“The interconnection regulations ought to evolve to keep pace with new developments in the sector, while sustaining the fundamental underlying principles of non-discrimination and level playing field. Keeping this in view, the Authority considered it fit to review the regulatory framework, for all type of addressable systems in a complete and holistic manner,” TRAI said in the paper.

TRAI has also taken note of the carriage charge. In the consultation paper, TRAI said, “The Authority is of the view that any kind of exclusivity in distribution of TV channel is pre-judicial for competition and hence is not permitted. No carriage fee is to be paid by a broadcaster if the subscription of the channel is more than or equal to 20 percent of the subscriber base. The rate of carriage fee has been capped at 20 paise per channel per subscriber per month. Further, the carriage fee amount will decrease with increase in subscription.”

“The distributors of TV channels may offer discounts on the carriage fee rate declared by them not exceeding 35 per cent of the rate of the carriage fee declared,” the paper said.

”Broadcaster to offer to a distributor, a minimum of 20 per cent of the maximum retail price of its pay channel(s) or bouquet(s) of pay channels as distribution fee. They may also offer discounts on the maximum retail price provided that the sum of discounts and distribution fee in no case shall exceed 35 percent of the maximum retail price, so declared,” it said.

Several leading broadcasters had in the past also raised concerns regarding high carriage charges and even called for regulation or near-total abolition of carriage fee while distribution platform operators (DPOs) have said that carriage fee should be left untouched to allow the market dynamics to decide.

Broadcast association had said that till such time that DAS is fully implemented, the price cap should be between 50 paise and ₹1 per set-top box (STB) on carriage fee payable by broadcasters to DPOs.

Broadcasters Star India, Sony Pictures Networks India, Viacom18 and Zee Entertainment Enterprises Ltd (ZEEL) have suggested that the issue of carriage fee does not arise in case TRAI opts for RIO-based models, particularly the regulated RIO model where TRAI will specify genre-wise price caps.

Host of changes

Punit Goenka, MD and CEO, ZEEL,said: “These draft regulations are steps in the right direction and propose a host of changes to the existing system. Although it still remains to be seen what form the final regulation will take, we hope that improved transparency will enable various stakeholders to get their rightful share of subscription revenues”.

Published on January 15, 2018

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