AIDCF tells TRAI to reduce price cap to Rs 10, mandate bouquets based on channel rates

The All India Digital Cable Federation (AIDCF), the apex body of leading multi system operators (MSOs), has urged the Telecom Regulatory Authority of India (TRAI) to cap the a la carte price of channels at Rs 10.

In its submission to the TRAI‘s consultation paper ‘Tariff related for broadcasting and cable services’, the AIDCF has further stated that the TRAI should consider introducing bouquets based on a la carte pricing. It has also stated that the broadcasters should not be allowed to form bouquets beyond 20% of the total number of channels distributed by them.

The federation has also stated that the TRAI should introduce twin conditions to ensure that the prices of the a-la-carte Channels have a direct correlation with the price of the Bouquets being offered by the broadcasters.

On the issue of channel price cap, the AIDCF pointed out that post the implementation of digital addressable system (DAS) under 2012 Regulations when the broadcaster was given the freedom to price the a-la-carte channel, most of the channels except sports channels, were priced below Rs. 10/-.

Therefore, the federation has suggested that the appropriate ceiling for channels should be a maximum of Rs. 10/- as there has been no change which necessitates such drastic jump/change in the price of channel by the broadcasters.

In order to check the menace of burdening the customers with unwanted channels, the AIDCF has suggested that the TRAI must consider introducing bouquets where the channels, whose a-la-carte price is between Rs. 0.01 to Rs. 7/- should be kept in one bouquet.

Similarly, the channels having a-la-carte price between Rs. 7.01/ to Rs. 12/- should be kept in a separate bouquet and accordingly the channels whose a la carte price is between Rs. 12.01/- Rs. 19/- should be kept in a separate bouquet.

“This will ensure and keep a check that non-driver/less priced channels are not be forced/pushed with popular channels in the same bouquet,” it noted.

The federation has proposed that the twin condition which was introduced at the wholesale level, may now be introduced with below modification at the retail level:

“a) the maximum retail price per month of such bouquet of pay channels shall not be less than eighty-five percent of the sum of maximum retail prices per month of the a-la-carte pay channels forming part of that bouquet; and

b) the a-la-carte rates of each pay channel, forming part of such a bouquet, shall in no case exceed one and half times the average rate of a pay channel of that bouquet of which such pay channel is a part.”

The AIDCF also stated that there is no need to revisit the discount permissible to DPOs as of now. “However, if TRAI post this consultation paper, comes out with a provision for discounts at a particular % on bouquets offered by the broadcasters, the same should be made applicable to DPOs at a retail level also in parity. However, if the authority post consultation continues with the non-implementation of proviso to Regulation 3(3) with regard to discount being offered by Broadcasters, the proviso to Regulation 4(4) should be also be revised accordingly,” it submitted.

The AIDCF has submitted that the broadcasters have misused the flexibility givent to broadcasters to give discount on sum of a-la-carte channels forming part of bouquets has been misused to push their channels to consumers.

The federation also stated that there is a need to revisit the enforcement of proviso to Clause 3(3) of the Tariff Order 2017 which has not been enforced by TRAI till date.

The proviso to clause 3(3) of the Tariff Order reads as under: “Provided further that the maximum retail price per month of such bouquet of pay channels shall not be less than eighty five percent of the sum of maximum retail prices per month of the a-la-carte pay channels forming part of that bouquet.”

The AIDCF stated that the non-implementation of the said proviso has given a leverage to the broadcasters to offer their bouquets at discount which is as high as 70 % of the sum of a-la carte channels forming part of such bouquets. This flexibility of giving discounts without a cap, created a non-level playing field for the distributors because the bouquets were priced on a discriminatory basis, it added.

It also noted that the proviso to Regulation 4(4) of the Tariff Order mandates DPOs to ensure that bouquet of pay channel offered by them shall not be less than 85% of the sum of distributor retail prices per month of a-la-carte pay channels and bouquet(s) of pay channels forming part of that bouquet.

The AIDCF noted that the same has not been enforced by TRAI for the broadcasters’ bouquets. It added that the same is not only contrary to the very intentions of authority to maintain parity amongst the constituent of broadcasting and cable sector but also in violation of Article 14 and 19 (1) (g) of Constitution of India.

The AIDCF is of the view that the distributors should be permitted to frame their own bouquets as the broadcasters can only offer the channels distributed by them, whereas, the subscribers demand channels of various broadcasters. “Therefore, only the DPOs can meet the demand/justify the actual requirement of the subscribers by forming their own bouquets comprising of popular channels of various broadcaster as per the demands and requirement of the subscribers.”

On the question whether DPOs have misused the freedom of placement of channels on EPG, the AIDCF submitted that all the channels that were available on the DPO’s platform prior to the implementation of the new regime continue to be on the same position as per the new regulatory framework the LCN cannot be changed before one year from the date of assignment of the channels and hence even the pay broadcasters who were paying the placement fees in the old regime have stopped paying any placement fee under the new regulatory framework. Hence, there is no problem as highlighted by the Authority with regard to placement of channels.

It further stated that distributors should not be permitted to offer promotional schemes on NCF and DRP of the channels and bouquet of the channels as it will result in unfair trade practice and may lead to various disputes and unhealthy competition among the distributor and LCOs.