TRAI to hold open house discussion on broadcast tariff issue on 18 Oct

The conference is scheduled to be held at 10.30 am at the Scope Convention Centre auditorium in Delhi.

The TRAI had issued a consultation paper on ‘Tariff related issues for Broadcasting and Cable services’. Through the consultation paper, the TRAI is looking to ‘fine-tune’ the new tariff order (NTO), which came into effect from February.

Considering the ramifications involved, the consultation paper has received comments from a large of individuals, organisations, and companies. The TRAI has received 282 comments with a large number of local cable operators (LCOs) also providing their suggestions on the way forward for the NTO.

The consultation paper has clearly divided the broadcast sector into two groups. While the broadcasters have told the TRAI not to tinker with NTO as it has just been implemented six months. An overwhelming majority of the distribution platform operators (DPOs) have welcomed the points raised by the TRAI in the consultation paper.

The TRAI is reviewing the NTO as it feels that the broadcasters and DPOs have not lived up its expectation in implementing the NTO despite having the requisite flexibility. The regulator has also alleged that the flexibility was misused to throttle market discovery of TV channel prices by giving huge discounts on the bouquets.

One of the main issues that the TRAI seeks to address through the consultation process is that of mismatch between a la carte and bouquet pricing. The existing regulation has a clause that caps the discount on bouquets offered by the broadcaster at 15%.

TRAI observed that broadcasters are offering bouquets at a discount of up to 70% of the sum of a-la-carte rates of pay channels constituting those bouquets.

As per TRAI, major broadcasters are offering 40-54% discount on various on an average. It also observed that in some cases, broadcasters have declared MRP of their bouquet such that their bouquet price is equal to or less than the MRP of a single channel present in that bouquet.

The Indian Broadcasting Foundation (IBF) has refuted TRAI’s criticism that broadcasters are resorting to heavy discounting to push bouquets.

In its submission to the TRAI, the IBF submitted that only 1 bouquet out of the 331 bouquets offered by the top five broadcasters has a discount higher than 65%. It further stated that 15% of bouquets have a discount that is less than 35%, and 66% have a discount that is 50% or less.

The IBF also pointed out that higher discounts ultimately benefit the consumer, as it delivers better value for money.

The foundation, which is the apex body of pay-TV broadcasters in India, contended that bundling of TV channels, by enabling ad revenue to defray content costs, has also expanded consumer choice from 212 TV channels in 2005 to 880 TV channels in 2018.

It pointed out that the ad revenue has prevented the ‘pass-through of content costs’ to subscribers and has reduced the average monthly TV bills in India by 81% than they would otherwise be without bundling.

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

In its submission, 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 that necessitates such drastic jump/change in the price of the 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 an 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/- to Rs. 19/- should be kept in a separate bouquet.