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TRAI amends New Tariff Order; "To protect interests of consumers"

On August 16, 2019, the Telecom Regulatory Authority of India (TRAI) released consultation papers to address various tariff-related issues for broadcasting and cable service. After the consultation process, the few issues that emerged according to TRAI are: cap on maximum discount permissible to broadcasters while forming a bouquet, number of channels permitted in Network Capacity Fee (NCF), applicable NCF for multi TV homes, flexibility to Distribution Platform Operators (DPOs) in offering long term subscription plans and carriage fee payable by broadcasters to DPOs.

Also Read: TRAI Tariff order: Broadcasters, distributors poles apart in open house discussion

On January 1, 2020, the TRAI announced its amendments to the New Tariff Order (NTO) which came into effect just a year back. In a media statement, TRAI said, the Authority analysed the comments of the stakeholders "particularly to protect the interests of consumers" and accordingly modified certain provisions of the new regulatory framework.

The amendments are:

In order to address the issue of huge discount during the formation of bouquets by the broadcasters vis-a-vis sum of a-la-carte channels, the Authority prescribed following twin conditions to ensure that price of a-la-carte channels does not become illusionary:

i) the sum of the a-la-carte rates of the pay channels (MRP) forming part of a bouquet shall in no case exceed one and half times the rate of the bouquet of which such pay channels are a part; and

ii) the a-la-carte rates of each pay channel (MRP), forming part of a bouquet, shall in no case exceed three times the average rate of a pay channel of the bouquet of which such pay channel is a part.

Additionally, the Authority decided that only those channels which are having MRP of Rs.12 or less will be permitted to be part of the bouquet offered by broadcasters.

NCF related issues were another area of concern for consumers. TRAI has examined various provisions in detail and accordingly mandated provision of 200 channels in maximum NCF of Rs.130 excluding taxes per month. In addition, it has also been decided that channels declared mandatory by the Ministry of Information and Broadcasting will not be counted in the number of channels in the NCF. DPOs have also been mandated that they will not charge more than Rs.160 per month for giving all channels available on their platform.

Also Read: TRAI's New Tariff Order: An Analysis

Consumers have also highlighted huge charges taken by DPOs in the form of NCF for a multi-TV home. TRAI has decided that in case of a multi-TV home where more than one TV connection is working in a home in the name of one person, will charge a maximum 40 per cent of declared NCF for second and additional TV connections. Authority has also permitted DPOs to offer discounts on long term subscriptions which is for 6 months or more.

TRAI also considered the concern of broadcasters regarding huge carriage fees being charged by DPOs. In order to address the concern of huge carriage fees, the Authority has mandated that MSOs, HITS operators, IP TV service providers will not have target market bigger than State or Union Territory as the case may be. In addition, a cap of Rs 4 lakh per month has been prescribed on carriage fees payable by a broadcaster to a DPO in a month for carrying a channel in the country.

Authority has also considered giving more flexibility to DPOs to place the TV channels on Electronic Programme Guide (EPG) and mandated that channel of a language in a genre will be kept together while placing channels on EPG. Such EPG layout is to be mandatorily reported to the TRAI and no change in this can be done without prior approval of the Authority. This will address the concerns of the broadcasters to a great extent to protect them as it will not allow DPOs to frequently change the LCN of the television channel in case they do not agree to their mandates.

TRAI observed, "The amendments carried out through the consultation process has left the basic contours of the new regime untouched and the Broadcasters/Distribution Platform Operators (DPOs) will continue to enjoy the flexibility in carrying out their businesses. The review exercise has been limited to certain consumer-friendly measures and to balance the interest of stakeholders. The revisions strive to ensure that the objectives of the existing framework get fulfilled to a great extent."

Also Read: TRAI's New Tariff Order: How do the communication & marketing challenges of channel heads change

The authority regulated that the broadcasters are required to publish revised MRP of a-la-carte channels and bouquets on their website by January 15, 2020, and DPO are required to publish revised DRP of a-la-carte channels and bouquets on their website by January 30, 2020.

TRAI opined, "The Authority is of the view that the amendments will usher in better consumer offerings, more flexible tariff schemes and more choices for consumers. Overall, the amendments are expected to result in healthier & structured growth of the Broadcasting and Cable Services sector."

The amended provisions will come into effect from March 1, 2020.