'Cable TV consumers can choose basic tier channels only from those on MSO network'

New Delhi: Cable TV consumers will be able to choose the 100 television channels as part of the basic service tier of free-to-air (FTA) channels only from those available with their multi-system operators (MSOs).

This was stated by Telecom Regulatory Authority of India (Trai) senior counsel Meet Malhotra while making arguments against petitions challenging the regulator‘s Tariff Order, allaying fears of MSOs and local cables operators that they will have to make available any and every channel demanded by their consumers.

Malhotra said the Tariff Order allowed the consumer a choice of opting for any 100 FTA channels from the network of the MSO ‘in lieu‘ of the 100-channel package offered by the MSO.

But it was wrong to argue that the MSO would have to approach any broadcaster for any additional channel because a single consumer has demanded it.

He, however, agreed with MSO and LCO counsels C S Vaidyanathan and Naveen Chawla that the statement ‘carried over the cable network of the operator‘ only appeared in the explanatory memorandum and not in the main Tariff Order. This had caused confusion among MSOs and LCOs that they might be forced to make available every FTA channel demanded by their consumers.

Trai had issued the Tariff Order on 30 April for digital addressable systems.

Malhotra said there were more than 200 FTA channels available in India and the consumer had been given a choice to opt for any 100 from amongst those available with his MSO. If a particular channel was not part of the MSOs network, then the consumer would have the right to demand it. The consumer will have to choose the FTA channels from among the ones the MSO carried.

Furthermore, the Trai counsel said as all FTA channels were similarly priced, taking one or another FTA channel will not result in any loss to the MSO or local cable operators.

Genres fixed under Cable Act and Tariff Order

However, he said that the Tariff Order in compliance with the Cable Television Networks (Regulation) Second Amendment Act of December last year had laid down some criteria with regard to the genres. Five channels each in seven genres had to be provided - news and current affairs, infotainment, sports, music, lifestyle, movies, and general entertainment channels -- in Hindi, English and the regional language of the concerned region. He said this worked out to 50 channels. In addition, there were around fifteen channels of Prasar Bharati, Rajya Sabha and Lok Sabha. The bouquet of FTA has been increased to 100 in DAS from 30 in conditional access system.

Thus the viewer still had enough choice to choose other channels of his liking. He said there was a ninth genre - religion - but TRAI had chosen not to link that to the Tariff Order. The broadcaster would have to declare which genre his channel fell into, Malhotra added.

Revenue share subject to negotiations

As far as the revenue sharing between the MSO and the LCO was concerned, TRAI had said this was a matter of negotiation and the ratio of 55:45 for the BST of Rs 100 had only been fixed as maximum tariff in case negotiations broke down. He also said that the rationale for this was very simple. Under the conditional access system, the ratio had been 45:30:25 between the broadcaster, MSO, and LCO. Since the broadcaster had no role to play under DAS for FTA channels, his share had been evenly given to the other two and so the sharing had been fixed at 55:45 since the work of downloading, encrypting and re-transmitting the channels would be that of the MSOs.

He said that no maximum retail price had been fixed in view of lessons learnt from CAS, and even the revenue share was by default - that is, in case the parties could not come to a mutual settlement.

MSOs not giving retail prices for channels

Malhotra complained that MSOs were refusing to give the retail rates per channel. He said that TRAI had sent several letters individually to the MSOs in this regard, and wondered why these rates were not being notified.

Capacity Increase Clause

He said that in a scenario where just around 460 channels were being seen, it was erroneous to assume that the MSOs would have to show 500. The Tariff Order had only said that they had to increase their capacity to receive 500.


He said Direct-To-Home platforms had a capacity constraint as they were on the limited Ku band. DAS has no such capacity constraint allowing more channels to be accommodated. He also said DTH is only a one-way system between the platform and the consumer and no MSOs or LCOs are involved as intermediaries. DTH also had to pay Rs 50 million per transponder apart from licence fee, and hence, there was no BST or ‘must carry‘ clause.

Rationale for abolishing Placement Fee

He reiterated that the placement fee had been done away with because the march of technology had made it unnecessary. Channels need not pay money to be placed at a certain band, since all channels were equally placed under DAS. ‘Preferential reason was the reason for placement fee‘, he added.

Carriage Fee clause to lead to fair competition

As far as the carriage fee was concerned, TRAI had only laid down that there should be reasonable carriage fee and it should be informed of the rate fixed.

Transparency will reduce dependence on carriage fee since the actual number of subscribers and households will be known under DAS. The regulation for no carriage fee in case an MSO approaches a broadcaster for a channel was based on common sense, but he said the aim was free and fair competition.

Malhotra is expected to conclude his arguments tomorrow, when the interveners NDTV and others will put their points before the counter-arguments on behalf of the appellant MSOs and LCOs begins.

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