In quest to resolve contentious issues of NTO 2.0, TRAI floats consultation paper again

Telecom Regulatory Authority of India (TRAI) Saturday issued Consultation paper on Issues related to New Regulatory Framework (NTO 2.0) for Broadcasting and Cable services.

Earlier this year in February, the regulator had postponed the NTO 2.0 implementation deadline to June 1, 2022. Soon after that, the broadcasters had withdrawn their petitions in various courts in order to pave the way for an amicable solution to the contentious issues.

In November last year, the broadcasters had increased the prices of their most popular channels including sports channels beyond Rs 20 per month, thus offering these channels only on a-la-cart basis.

Immediately after new tariffs were announced, TRAI said it received representations from Distribution Platform Operators (DPOs), Associations of Local Cable Operators (LCOs) and Consumer Organizations.

DPOs highlighted difficulties likely to be faced by them in implementing new rates in the system and migrating the consumers to the new tariff regime through the informed exercise of options impacting almost all bouquets, especially due to upward revision in the rates of pay channels and bouquets declared by broadcasters. “Therefore, TRAI engaged with all the different associations and consumer groups including representatives of LCOs,” the regulator said in the press statement.

To deliberate on the various issues related to implementation of New Regulatory Framework 2020 and suggest a way forward, a committee consisting of members from Indian Broadcasting & Digital Foundation (IBDF), All India Digital Cable Federation (AIDCF) & DTH Association was constituted under the aegis of TRAI.

The purpose of the Committee was to facilitate discussions among various stakeholders to come out on a common agreed path for smooth implementation of Tariff Amendment Order 2020. Stakeholders were advised to come out with an implementation plan with minimum disruptions and hassles to the consumers while implementing the New Regulatory Framework 2020.

The Committee listed several issues related to New Regulatory Framework 2020 for consideration. The stakeholders, however, requested TRAI to immediately address critical issues which could create impediments for smooth implementation of Tariff Amendment Order 2020.

In order to address the issues as identified by the stakeholders’ committee; the regulator has floated fresh consultation paper for seeking stakeholders’ comments on points / issues which are pending for full implementation of New Regulatory Framework 2020. This paper primarily
discusses issues related to discount given in the formation of the bouquet, ceiling price of channels for inclusion in bouquet, and discount offered by broadcasters to DPOs in addition to distribution fee.

The regulator has put up following questions for consultation:

1. Should TRAI continue to prescribe a ceiling price of a channel for inclusion in a bouquet?
a) If yes, please provide the MRP of a television channel as a ceiling for inclusion in a bouquet. Please provide details of calculations and methodology followed to derive such ceiling price.
b) If no, what strategy should be adopted to ensure the transparency of prices for a consumer and safeguard the interest of consumer from perverse pricing?

2. What steps should be taken to ensure that popular television channels remain accessible to the large segment of viewers. Should there be a ceiling on the MRP of pay channels?

3. Should there be ceiling on the discount on sum of a-la-carte prices of channels forming part of bouquets while fixing MRP of bouquets by broadcasters? If so, what should be appropriate methodology to work out the permissible ceiling on discount? What should be value of such ceiling?

4. Please provide your comments on following points with justifications and details:
a) Should channel prices in bouquet be homogeneous? If yes, what should be an appropriate criteria for ensuring homogeneity in pricing the channels to be part of same bouquet?
b) If no, what measures should be taken to ensure an effective a-lacarte choice which can be made available to consumers without being susceptible to perverse pricing of bouquets?
c) Should the maximum retail price of an a-la-carte pay channel forming bouquet be capped with reference to average prices of all pay channels forming the same bouquet? If so, what should be the relationship between capped maximum price of an a-la-carte channel forming the bouquet and average price of all the pay channels in that bouquet? Or else, suggest any other methodology by which relationship between the two can be established and consumer choice is not distorted.

5. Should any other condition be prescribed for ensuring that a bouquet contains channels with homogeneous prices?

6. Should there be any discount, in addition to distribution fee, on MRP of a-la-carte channels and bouquets of channels to be provided by broadcasters to DPOs? If yes, what should be the amount and terms & conditions for providing such discount?

7. Stakeholders may provide their comments with full details and justification on any other matter related to the issues raised in present consultation.
The deadline to submit comments on the consultation paper is May 30, 2022. The counter comments can be submitted by June 6, 2022.

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