TRAI releases Consultation Paper on Telecom Interconnect Audit and DAS Regulations

New Delhi: The Telecom Regulatory Authority of India (TRAI) issued a consultation paper on ‘audit-related provisions of telecommunication (broadcast and cable) services interconnection (addressable systems) regulations, 2017 and the telecommunication services digital addressable systems audit manual’

The consultation paper states that the TRAI has observed that despite the provision of financial disincentives in place and constant efforts made by the MIB and TRAI, many distributors are not getting their systems audited in a time-bound manner.  Additionally, the paper further suggested that the number of DPO-caused audits was very low in the last four years.

Moreover, the paper highlighted that one of the issues for consideration was how to ensure the compliance of DPOs with regulation 15(1) of the Interconnect Regulations. There are different opinions on the matter as few opinions suggest that TRAI may increase the cap in financial disincentive in case a DPO fails to cause an audit within the prescribed timeframe.

However, broadcasters and their associations have suggested that the provision of DPO-caused audit under section 15(1) should be scrapped and the regulation under section 15(2) should be retained. 

According to broadcasters, several DPOs do not get the audit completed, violating a mandate under section 15(1). They further stated that even if the DPOs do get audited, they take an inordinate amount of time and even if completed, the audits do not record any discrepancy with the systems.

TRAI stated that before the Interconnect Regulations 2017, DPOs used to complain that multiple technical audits of their systems by multiple broadcasters resulted in a multiplicity of tasks, a heavy financial burden and an increased workload. 

Furthermore, another concern about the usage of addressable systems has come up. TRAI stated that despite certain discrepancies observed by the auditors, no further action has been taken by the DPOs to remove these discrepancies. 

However, the regulatory body stated that section 15(2) addressed the issue, with broadcaster-issued audits permissible in the case where broadcasters believe that systems being used by the DPOs do not meet specified requirements in Schedule III or Schedule X.  

The TRAI in its consultation paper has highlighted that smaller DPOs have verbally informed the regulator that it is difficult for them to conduct audits every year owing to capacity constraints, in terms of manpower as well as financial. The consultation paper has further stated that representations were also received from a few small DPOs with a request to exempt them from audit due to the inability to afford audit fees.

One suggestion made was that DPOs with a subscriber base of less than a specified number may be exempted from the audit process. However, the DPO may be free to conduct audits under section 15(1) to avoid multiple audits by different broadcasters.

Another issue highlighted in the consultation paper was that many DPOs wait until the end of the year to conduct audits of their systems to ensure compliance with Interconnect Regulations 2017 which state that there should be a minimum of 6-18 months gap between two annual audits caused by a DPO.

Broadcasters have raised the issue wherein they are unable to cause audit under section 15(2) in a particular year in many cases. Broadcasters have also raised the issue that in many cases they are unable to cause audit/subscription audit to verify that the monthly subscription reports made available by the distributor to the broadcasters are complete, true and correct under regulation 15(2) in a particular year, as many DPOs do not cause an audit of their system under regulation 15(1) in a particular year.

The opinions in the consultation paper stated that the DPOs may be mandated to conduct an audit of their systems within a fixed period say within nine months so that broadcasters get time to conduct an audit/challenge audit. Besides this, if any DPO does not cause an audit of its systems in a calendar year as specified in Regulation 15(1) then broadcasters may be permitted to cause both subscription audit and/or compliance audit3 of that year within a fixed period say 2-3 months after the end of that calendar year. 

Similarly, for the audit report received by the broadcaster from the DPO (under regulation 15(1)), the broadcasters may be permitted to cause a challenging audit under regulation 15(2) within a fixed period from the date of receipt of that report for that calendar year, including spilling over of such period to the next year.

Additionally, the consultation paper stated that TRAI had proposed its recommendations to enable MSOs to utilise the video delivery infrastructure of HITS to deliver the signals far and wide across the country. The stakeholder mentioned that the HITS technology has the advantage of being able to deliver video signals across the country and allow MSOs to penetrate quickly into new areas/regions without heavy capex or opex investments. Further, MIB in its Order of 6th November 2020 confirmed that MSOs were free to get into voluntary agreements with a HITS service provider for HITS infrastructure sharing services.

However, a few stakeholders mentioned that in the case of infrastructure sharing since the encoder will belong to a primary (infrastructure provider) MSO, the watermarking on the channels will only reflect logos of primary MSOs. Hence, to correct this, the watermarking should be allowed at the set-top box (STB) level, so that logos of the primary (infrastructure provider) and secondary (infrastructure seeker) MSOs are visible to the respective consumers of both MSOs. This will help in curbing the chances of piracy.

The consultation paper further stated that the purpose of watermarking logo insertion at the encoder end in Interconnection Regulations is to tackle piracy by tracing the source of the signal which is used for piracy. 

This is because a rogue entity is somehow able to disable the logo on the STB. The piracy issue may be addressed by DPO (infrastructure provider) by deploying encoders capable of inserting a watermarking logo at its head-end which will help establish the source of the signal. The same can also be authenticated with broadcasters' fingerprinting as well. DPO’s solution therefore proposes watermarking logo insertion at the encoder level and for DPOs sharing their infrastructure through STB.

The TRAI has invited written comments on the consultation paper from the stakeholders by September 6, 2024, whereas counter comments may be submitted by September 20, 2024. The comments and counter-comments may be sent, in electronic form on the email ID advbcs-2trai.gov.in and jtadvbcstrai.gov.in