TRAI empanels nine agencies for auditing DAS of DPOs

In accordance with the new regulatory framework, the Telecom Regulatory Authority of India (TRAI) has empanelled nine agencies to carry out audit of Digital Addressable Systems (DAS).

These auditors include 1) CA Anil Kumar Jain, Borkar & Muzumdar; 2) Peeyush Vaish, Partner, Deloitte Touche Tohmatsu India LLP; 3) Rahul Shah, Associate Partner, Ernst & Young LLP; 4) Jitendra Kumar Sarawgi, Managing Partner, J.K. Sarawgi & Company; 5) Jeenendra Bhandari, Partner, MGB & Co LLP; 6) Koushik Balasubramanian, Senior Director, Protiviti India Member; 7) Laxmikant Saini, Partner, S. M Saini & Associates; 8) Gaurav Mittal, Partner, S.K. Mittal & Co., Chartered Accountants; and 9) Vishwanath Kumar Seshadari, Director, Xestion Advisor.

In March, the TRAI had issued a tender document inviting expression of interest for empanelment of auditors to carry out an audit of DAS of the distribution platform operators (DPOs). The regulator has invited proposals from eligible audit firms/ companies/ Limited Liability Partnership (LLP)/ Partnership firms.

The period of empanelment will be valid for two years from the date of empanelment of the concerned firm.

The empanelled firm will have to submit the quarterly report to TRAI about the details of audits carried out by them during the quarter within 21 days from the end of the respective quarter, along with a copy of the reports, as per the format prescribed by TRAI.

In case the firm observes any major discrepancy in the system of the distributor during audit, the same shall be reported to TRAI immediately. According to TRAI, the interconnection regulations provide that the authority may empanel auditors for the purpose of such audit.

Scope of audit

The scope of work of the audit agency will include the audit of the addressable system of the distributor to verify whether the addressable system being used by the distributor of television channels meets the requirements specified in the Schedule III of Interconnection Regulations, 2017.

The agency will also have to audit of the subscriber management system, conditional access system and other related systems of a distributor of the addressable system, once in a year, to verify that the monthly subscription reports made available by the distributor to the broadcasters are complete, true and correct, as per Regulation 15 of Interconnection Regulations, 2017.

The audit will also include ascertaining whether the distributor has established and is maintaining necessary systems, processes & records in line with the regulatory framework encompassing Interconnection Regulations, 2017, QoS Regulations, 2017 and Tariff Order, 2017.

This includes but is not limited to maintenance of the website for publishing of RIO by the distributor, web-based grievance redressal mechanism for addressing the complaints of LCOs, an indication of Maximum Retail Price (MRP) of channels on Electronic Programme Guide (EPG), offering Basic Service Tier package etc.

Roles and responsibilities of audit agency

As per the conditions in the tender document, the firm will have to treat all the information provided by the service provider as confidential and shall not share such information without the written approval of the service providers.

The Audit Agency will have to enter into necessary confidentiality agreement with the service provider to the satisfaction of the service provider/ TRAI. The audit agency cannot sub-contract the audit work assigned to it to any outside firm or other persons.

The audit agency cannot undertake audit of addressable system of any service provider for whom he is also the statutory auditor or internal auditor or concurrent auditor or where he is the consultant to the service provider.

TRAI may call the Audit Agency for meetings/ presentation for seeking/ providing clarifications or for reviewing the progress of audit. The audit agency shall attend such meetings/ presentation at their own expenses.

In case of disputes/ clarifications arising out of this document, the decision of TRAI shall be final and binding on the audit agency.

Audit of DPOs DAS

The TRAI had also stated that each DPO should cause an audit and provide audit report as per Clause 15(1) of Interconnect Regulations, 2017. As the implementation of the New Regulations has been completed on 28th December 2018, all the DPOs must initiate their Audit as soon as possible.

It had also stated that if a broadcaster is not satisfied with the Audit Report based on the audit caused by DPO, such Broadcaster may initiate an audit as per the provision vide Regulation 15(2).

DPO will have to provide access to CAS, SMS servers and related addressable system to the auditor.

The auditor can demand specific data, logs and reports and the DPO shall extract the data in front of the auditor and provide the same. DPO shall ensure that no STB/VC is left out from the database.

A screenshot of the Queries that are run can be provided as long as any confidential data of DPO is masked by the DPO before handing over to the auditor or before inclusion in any report, the TRAI noted.

The auditor and broadcaster representative, in case of audit initiated by broadcaster’s challenge, should be physically present during the extraction of CAS & SMS data.

Before submission of the final report, a draft report should be shared with the Auditee for giving an opportunity to provide clarifications, if any. The final report can be shared after incorporating the Auditees comments.

The DPO shall give their comments within seven days failing which the auditor will finalise the report i.e. If no comments are received by the Auditor from the concerned DPO within seven days, the Auditor will finalise his/her report.