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MIB must file a separate reference in the ‘chip installation in STB’ proposal: TRAI

In a back reference to TRAI’s ‘Recommendations on Issues related to New DTH Licences’, the I&B Ministry had mentioned a proposal to install chips in all the new STBs by the operators

The Telecom Regulatory Authority of India (TRAI) has asked the Ministry of Information and Broadcasting to send in a separate reference if it seeks TRAI’s recommendations with regard to the installation of chip in the new set-top-boxes (STBs) by DTH operators.

In a back reference to TRAI’s ‘Recommendations on Issues related to New DTH Licenses’, the I&B Ministry had mentioned a proposal to install chips in all the new STBs by the operators. The back reference read, ‘It is also proposed to ask DTH operators to install a chip in the new set-top-boxes, which can give data about channels watched and their duration.’

It must be noted that the existing television viewership measurement agency Broadcast Audience Research Council (BARC) India has already started the process of tying up with the distributors to gather data through the set top boxes. It has already announced partnerships with Airtel DTH and Den Networks and is in talks with other players.

Data gathering through the STBs is a long and expensive process, as it requires more infrastructural support than the in-built chips and proper internet services connected to the STBs. After the data is gathered, there is a long process of scrutinising this data and applying algorithms to this before this viewership data can be used.

When asked about the expenses and calibrations on this, SK Gupta, Secretary, TRAI, said, “We have told MIB to give us a formal reference letter so that we can analyse and do consultation upon the costing and other factors. Till then, we don't know anything about viewership measurement and other related factors.”

In its written letter to the Ministry too, TRAI stated, “In this regard, it is stated that this is a new issue and cannot be a part of back reference. If MIB desires TRAI's recommendations on the same, it may seek the same through separate reference, as per provision of TRAI Act 1997.”

The recommendations on ‘Issues related to New DTH Licenses’ are dated July 23, 2014.

The other points wherein the MIB and TRAI have differences in viewpoints are:

Duration of Licence

MIB believed that the DTH licence should be granted for an initial period of 10 years. Thereafter, renewal will be for 10 years. On the other hand, TRAI feels that DTH is a highly capital intensive sector. The investments are required not only in the initial stages at the time of setting up the infrastructure but also at subsequent stages of operations for maintaining it. The DTH operator also needs to build long-term relationships with the customers. Therefore, it is felt that a longer licence period would provide certainty in the market. The Authority further noted that in the telecom sector, the licence period under the Unified Licence (UL) regime is 20 years and renewal is 10 years at a time. In view of the growing convergence between the broadcasting and telecom sectors, it is logical to align the licence period for DTH sector with that in the telecom sector under the UL.

Entry Fees

MIB has proposed that the entry fee should be increased to Rs 25 crore for the licence period of 10 years, keeping in view inflation over the past 17 years. Against this, TRAI has responded that the basic purpose of levying an entry fee is to deter non-serious players. In fact, quantum of the fee should be such that it ensures a level-playing field between the providers of similar or substitutable services and also discourages non-serious players. In order to encourage more entrants in the DTH industry, and to compete with the cable industry, wherein there is no entry fee, TRAI recommends to retain the entry fee at Rs 10 crore.

Licence Fee Frequency

MIB has proposed that the DTH licensee shall be required to pay licence fee on an annual basis, with an option of pre-payments by DTH operators. TRAI, however, feels that the payment of a licence fee on a quarterly basis is again a well-established practice in the Telecom Sector. Synergy in telecom and broadcasting sector needs to be developed keeping in view the growing convergence. It will also lower the risk of collection of licence fee from the operators and facilitate Government to get licence fee on a regular basis.

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