Trai seeks stakeholders views on agreements with non-addressable systems

NEW DELHI: The Telecom Regulatory Authority of India (Trai) has asked cable operators and other stakeholders in the broadcasting sector to specify the changes they want in the interconnection regulations for the non-addressable television sector which have often led to prolonged litigation.

In a consultation paper on the issue, Trai has specifically said there is need to make certain amendments to the Telecommunication (Broadcasting and Cable Services) Interconnection Regulation 2004, amended from time to time, which are based on negotiated subscriber base which has not been effective at the ground level resulting in a number of disputes between the service providers.

The Authority recently reviewed the tariff related issues in the entire broadcasting sector and during the discussions found that the stakeholders wanted a review of the Interconnection Regulation in the light of difficulties and consequent litigation that results from time to time.
The consultation paper would look at disputes on subscriber base between broadcaster and cable operators and Multi System Operators (MSO) during the course of a contract.

The consultation paper discusses the extant regulatory provisions and a possible solution to the issue.

Trai has invited inputs from the stakeholders which can form the basis for review and amendment of the existing interconnection regulatory framework for the cable TV industry in the country to make it more responsive to the challenges posed by the present market conditions. The proposals have to be given by 15 January. Counter comments, if any, on the comments received may be sent by 20 January.

Primarily, Trai wants to know if the stakeholders agree with the proposal to amend the prevailing interconnect regulation between broadcaster and MSO in the light of various suggestions made by it and the appropriate date for implementation of the proposed scheme of interconnection between the service providers in the year 2011.

The Authority has also taken note of the fact that in January last year, the Telecom Disputes Settlement and Appellate Tribunal (Tdsat) had noted in an appeal that in a non-addressable scenario, which is what characterises most of the cable industry, the problem of under declaration by the cable operators/MSOs persists, and the concern of the broadcasters in this regard cannot be brushed aside. In fact, a significant percentage of the disputes in the broadcasting sector are on account of the subscriber base. It is essential that this issue is addressed squarely. The Authority would be well advised to review its decision of the explanatory memorandum of having decided not to determine the levels of connectivity between the stakeholders. Since digitalization and addressability are bound to take some time, it is essential that the Authority, set up to regulate the industry, finds a way to address the issue."

At present, in non-addressable cable TV system, where the cable distribution is in analog mode, the cable TV service providers enter into interconnection agreements on the basis of negotiated subscriber base.

The Authority has laid down a detailed methodology, based on "negotiated subscriber base" criteria, in non-addressable Cable TV System vide the Telecommunication (Broadcasting and Cable Services) Interconnection (Third Amendment) Regulation, 2006 dated 4 September 2006. But Trai says it is clear that the subscriber base is a figure agreed to by two service providers in the case of non-addressable system and a lot of uncertainty is brought by clauses 10 which provides for variation of the subscriber base and 12 where the MSO are required to furnish the updated list of cable operators along with their subscriber base to the broadcasters on a monthly basis.

As the system is non-addressable, it is difficult to work out the real subscriber base. The subscriber base being a derived number, rather than an actual number, there is no clarity on the actual subscriber base. This often leads to disputes between the broadcasters and the multi system operators. The tendency of the broadcaster is to seek enhanced subscription fee based on the assumed growth in subscriber base of the multi system operator while that of the multi system operator is to seek reduction in such subscription fee based on perceived reduction in the subscriber base. As a result, the stakeholders allege that the subscriber base is manipulated by the dominant party to the agreement to extract maximum advantage for itself.
At present the entire value chain in the analog cable distribution is working on the basis of "negotiated subscriber base" which is based on the declaration of subscribers made by cable operator to MSO and by MSO to a Broadcaster depending upon the popularity of the channel, its demand in a particular area etc. There is no prevalent technological mechanism to determine the actual number of subscribers receiving a particular channel in a non-addressable environment.

Trai said even a detailed methodology in the interconnection regulation for arriving at the ‘subscriber base‘ in non-addressable system had not worked effectively at ground level. The disputes between the Broadcaster and MSO and between MSO and LCO have not decreased.

Committed to bring in addressability and digitization in non-addressable areas, Trai sent its recommendations giving detailed road map for implementing digitisation with addressability in the country to the Information and Broadcasting Ministry on 5 August 2010. However, till the digitisation with addressability is fully implemented in the cable TV sector, there is need to bring in a regulatory mechanism to address the issue in non-addressable cable TV system.

Trai has also suggested a proposal for agreements between the service providers to be based on the agreed amount arrived at after negotiations for a specified period.

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