IBF likely to drag TRAI to court over 'totally arbitrary' changes to NTO

Calling out the lack of understanding shown by the Telecom Regulatory Authority of India (TRAI) over the arbitrary amendments to the new tariff order (NTO), the Indian Broadcasting Foundation (IBF) in a strongly worded statement has said it may take the authority to the court.

“IBF is disappointed at the lack of understanding shown by the Regulator. It will strategise its future course of action, including evaluating legal options, based on feedback from its member channels and networks,” IBF said.

Calling more than 36 tariff orders and ancillary regulations in the last 15 years for the broadcast sector an attempt to micromanage what is arguably the cheapest form of news and entertainment in the world, IBF said that over-regulation, inconsistency and frequent changes in the regulations by the Regulator has already cost the broadcast sector 10-12 million TV subscribers, as per various industry estimates in 2019.

“These amendments will compound the problem further,” IBF said.

IBF hinted it felt betrayed after TRAI went back on its words.

It said, “IBF in its response to TRAI's consultation paper had pleaded with the regulator to adopt a "soft touch" and allow the industry to come to terms with the NTO before making further changes. In fact, TRAI itself had acknowledged this need by proposing a two-year moratorium on further regulation. It appears all IBF's pleas have been ignored. Unfortunately, in this exercise, content creators and owners have been disempowered and the entire authority has shifted to the middlemen.”

According to the new amendments issued on January 1, 2020, TRAI has reduced the cap on MRP of individual channels, which can form part of any bouquet, to Rs 12 per month, from the earlier cap of Rs 19. Less than a year ago, TRAI itself determined that the price per channel can be Rs 19, which has now been reduced to Rs 12 without giving any logical reason, thus making the change totally arbitrary. The regulator has sought to impose twin conditions for bouquet formation, effectively introducing a cap on bouquet pricing, left untouched in the NTO.

Coming barely a few months after TRAI notified the NTO, effecting a disruptive change in the distribution ecosystem, these amendments will severely impair broadcasters’ ability to compete with other unregulated platforms and adversely affect the viability of the pay TV industry, the apex body of broadcasters said in the statement.

“While TRAI claims the amendments are in the consumers’ interest, it appears to have conveniently forsworn the interest of broadcasters,” IBF said. “This change will only benefit the DPOs as they have been allowed to charge as much as Rs 160 for channels that are supposed to be ‘Free’.”

While the Government is looking at ramping up growth, these changes will have the opposite effect for the broadcast sector just recovering from the twin shocks of NTO in the first half of 2019 and the ad slowdown.

“At a time when the economic environment is tough, the amendments will force a lot of channels to shut down and will lead to unemployment in the sector, warned IBF.

After NTO, the ecosystem had just settled down with about 200 million consumers choosing their favourite channels. “We have to allow the changes to fully settle down and the market forces to prevail while resisting the temptation to continuously tinker with the regulation. The Regulator’s intent was to address infirmities in the new Tariff Order (NTO), however, it has been done solely at the cost of the broadcasting fraternity,” said the industry body.

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