Broadcasters oppose Trai tariff order review

IBF says regulator’s intervention ‘premature’, to have disastrous results.

MUMBAI: A consultation paper on the new tariff order of the Telecom Regulatory Authority of India has received opposing views from TV broadcasters and distribution platform operators, who include the cable and direct-to-home companies.

While the Indian Broadcasting Foundation (IBF) has stated that regulatory intervention (by Trai) at this stage is not only “premature” but will also have “disastrous consequences” for the entire industry, All India Digital Cable Federation (AIDCF) has said broadcasters are misusing flexibility and heavy discounting available on bouquets.

Trai initiated a process to review the new regulatory framework for the broadcasting sector barely six months after it came into effect. Questions included whether channel bouquets should be allowed; should a cap on discounts within bouquets be reintroduced; and whether the ceiling price of channels in bouquets – Rs 19 at present – needs to be re-examined.


In its 23-page response, IBF has first attacked the very basis of the paper, saying, “The consultation paper background and issues identified are reflective of Trai’s approach that are unreasonable and result in manifestly arbitrary conclusions, to put in effect a number of predetermined conclusions … it lacks an evidence-based approach and relies on assumptions and generalisations. No empirical or databacked research findings are available for need for a paper at this early stage in implementation of the new tariff order.”

IBF has emphasised that broadcasters have not resorted to heavy discounting. Of the 331 bouquets offered by the top five broadcasters, 15% have discounts below 35%, and 66% have discounts of 50% or less. Only one bouquet offers over 65% discount, it submited. “Moreover, higher discounts are ultimately to the benefit of the consumer, as it delivers better value for money,” IBF has said.

Times Network, the broadcast network owned by BCCL, which also owns ET, has submitted that consumer interest is fully protected with present regulations as there is complete choice available to the consumer. It added that due to over-regulation, inconsistency and frequent changes in rules by the regulator, the broadcast sector has already lost 10-12 million TV subscribers in the past five months (as per various industry estimates) post new regulations... experts fear further regulations will give a fatal blow to this sector as distribution revenues will drop significantly at a time when advertising revenues are already under pressure due to the slowdown.
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Requesting that the consultation process be called back or kept on hold and deferred, Times Network stated: “The regulator should not put the industry and its consumers to frequent inconveniences just for furtherance of views formed from some incorrect analytical interpretations, assumptions and presumptions. It seems Trai has assumed that broadcasters are responsible for the perceived “higher costs” whereas it should be understood and appreciated that there is a cost involved in carrying broadcasting operations and such costs of operations are very high and they have to be recovered in a fair manner by generating legitimate revenue. No business will survive if it is not able to recover costs.”

IBF has blamed the cable ecosystem for making it harder for consumers to select their favourite channels.

The cable industry lobby has urged Trai to re-introduce the 15% cap on discounts on a bouquet struck down by Madras High Court as “arbitrary.” Non-implementation of the discount cap has given leverage to broadcasters to offer bouquets at high discounts, AIDCF wrote in its 18-page response to the paper.
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