TRAI recos on cable monopoly requires further consultation due to its multi-dimensional implications: I&B min

Information & Broadcasting (I&B) minister Prakash Javadekar has the issue of cable monopoly requires further consultation with various stakeholders since the implementation of the Telecom Regulatory Authority of India’s (TRAI) recommendations has multi-dimensional implications.

Responding to a question in Lok Sabha, Javadekar said that the recommendations of TRAI on ‘Monopoly/Market Dominance in Cable TV Services’ dated 26th November 2013 have been considered by the Inter-Ministerial Committee of the ministry.

He further stated that this includes TRAI’s recommendation relating to the Herfindahl–Hirschman Index (HHI).

“The acceptance of the recommendations has multi-dimensional implications which require consultation with various stakeholders. No recommendation to Competition Commission of India (CCI) has been made in this regard,” he said.

As reported by TelevisionPost.com, the ministry of information and broadcasting (MIB) had told the Parliamentary Committee on Information Technology that the Telecom Regulatory Authority of India’s (TRAI) recommendations on cable monopoly are impractical. It had also sought the Competition Commission of India’s (CCI) on the same.

In its reply to the Parliamentary Committee on Information Technology, the MIB stated that these recommendations were earlier discussed by Inter-Ministerial Committee (IMC) in its meeting held on 17th and 22nd January 2014 following which the recommendations were accepted.

Following this, the ministry received representation from the industry arguing that HHI Index for measuring market concentration is not the appropriate tool in the media sector.

The ministry further stated that the matter was examined in this ministry and not found feasible as the recommendations appear to be impractical. It also informed that the views of CCI are being sought in the matter.

In its recommendations on ‘Monopoly/Market dominance in cable TV services’, the TRAI had recommended using HHI for measuring the level of competition or market concentration in a relevant market.

It had also recommended restricting the building up of market share up to 50%, which corresponds to individual contribution of 2500 to market HHI by any individual/ ‘group’ entity through M&A/ ‘control’ of an entity over many MSOs/ LCOs.

For assessing monopoly/ market dominance of Multi System Operators (MSOs) in the TV channel distribution market, the state was chosen as the relevant market. Market dominance is to be determined on the basis of market share in terms of the number of active subscribers of MSOs in the relevant market.