Can MSOs tell Kerala High Court about their non-compliance with NTO 3.0 yet?

With NTO 3.0 (New Tariff Order) coming into force from February 1, 2023, a handful of multi-system operators (MSO) or distribution platform operators (DPO) belonging to AIDCF are yet to confirm the compliance to TRAI.

Barring Siti Cable, all other members of AIDCF are awaiting the Kerala High Court’s final order slated to be pronounced on Wednesday.

The Kerala High Court on January 6 had refused to stay the implementation of the amended new tariff order and had posted the matter for final hearing on February 8.

However, the members of All India Digital Cable Federation are waiting for Wednesday’s court order before they take any decision on complying with the provisions of NTO 3.0.

As on February 1, almost 80% of DPOs have already signed up with the broadcasters agreeing to the latest NTO regime.

For TRAI, the legal position is that the regulation has already come into force and the industry has to abide by it if the High Court refused any stay on the implementation.

However, the big question is what will the cable operators tell the court on compliance of the regulation already into force in absence of any stay on it.

Will the cable operators tell the court that they have not complied with the provisions of NTO 3.0?

“I don’t think they are in the position to accept this in the court. But at the same time, if they do so, TRAI will press for their compliance report or letter. If they say they have not complied with NTO 3.0, it can backfire for them. If they say that they have complied, TRAI will ask for letters and it will also mean 100% compliance of the provisions of NTO 3.0,” said an industry expert.

BestMediaInfo.com reported last week that Disney Star, Sony and Zee have sent a list of 775 MSOs, 700 MSOs and 715 MSOs, respectively to TRAI who have signed and implemented NTO 3.0. 

Even DTH Players like Tata Play, Dish TV and Airtel Digital TV have signed agreements to implement NTO 3.0.

The other 20%, who are mostly AIDCF members, are waiting for the final order from Kerala High Court. 

One of the AIDCF members, Siti Cable, has agreed to implement NTO 3.0. 

AIDCF has maintained that NTO 3.0 will have a negative impact on their end customers and subscribers. 

A representative of DPO, under conditions of anonymity, said, “We have already been losing customers, and this price hike by channels will further make people opt out of cable subscriptions.” 

On the other hand, the broadcasters who have increased the tariff rates are looking forward to hikes turning into revenue this month onwards. 

A broadcaster commented, “This was long overdue as content acquisition cost has only been increasing. There has been no increase in the pricing of channels in the last four years. When it comes to people opting out of cable subscriptions, an increase in channel price cannot be the lone problem.”

A leading DPO said, “We don’t have a problem with the increase in price as we understand that the content acquisition cost has increased along with other inflationary pressure. But we have a problem with the extent of the price increase, which is massive. Even when it comes to discounts, broadcasters play around it according to their whims and fancies. Sometimes, they will give and sometimes, they will revoke it.”  

Broadcasters had already submitted their RIOs in December 2022, with increased pricing between 5-15%.

According to sources, even on January 31, AIDCF tried to persuade the court to hold the implementation, but the court found no merit in their case being put forward at this stage.

As per NTO 3.0 issued in November 2022, broadcasters are allowed to increase the price of channels, which are part of the bouquet up to Rs 19 instead of Rs 12 as mandated in NTO 2.0. A broadcaster can offer a maximum discount of 45% while pricing its bouquet of pay channels over the sum of MRPs of all the pay channels in that bouquet.

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