Trai nixes exclusive contracts with TV channel distributors

MUMBAI/Delhi: The Telecom Regulatory Authority of India (Trai) today formally issued interconnect regulations for the broadcast sector, nixing exclusive broadcaster-distributor contracts and disallowing premium on exclusivity. This has left most of the pay broadcasters uneasy.

"No broadcaster of TV channels shall engage in any practice or activity or enter into any understanding or arrangement that prevents any other distributor of TV channels from obtaining such TV channels for distribution," the cable and broadcast regulator has said in its final "Telecommunication (Broadcasting and Cable) Services Interconnection Regulations 2004.

The 'must-provide' clause extends across the value chain. While broadcasters will have to provide signals of its TV channels on a non-discriminatory basis to all distributors of TV channels, multi system operators (MSOs) have a similar obligation towards cable operators.

The distribution agency or any other intermediary of the broadcasters and MSOs will have to "act in a manner that is consistent with the obligations placed under this regulation" so that it is not prejudicial to competition, Trai has said.

The Trai order will come into effect from the day it is notified in the official Gazette, which can be late today or Monday. A government okay for the interconnect regulations issued today is not needed.

The final regulation was issued today (10 December) after taking in and analysing responses from the industry. In an earlier recommendation on broadcasting and distribution of cable television forwarded to the government on 1 October, Trai had made a reference to inter-connection regulations. But the regulator wanted to take feedback from industry stakeholders till 5 November before finalising the regulation. The reason: nondiscriminatory access of TV channels will have far reaching and long term impact on the growth of the industry.

For disconnecting the TV channel signals to a distributor, a broadcaster or MSO shall have to give at least one month's notice. In order to give consumers information, the notice shall have to be published in the newspapers or carried as a scroll in the concerned channels. But the Trai has protected the broadcasters and MSOs in case of unauthorised re-transmission of TV channels. In such cases, the signals may be disconnected by giving a notice of two working days, the regulator has said.

The regulation aims to promote competition both within the cable industry and between cable and other platforms. Consumers will be given a choice that will pave the way for price deregulation, Trai has said in its inter-connect order.

Essel group vice-chairman and Siticable head Jawahar Goel feels the regulator has done a "positive thing" for the industry, while being fair to most segments of the industry.

"From no regulation to some regulation is certainly a welcome step as it would bring about some orderliness in the chaotic industry, which needs transparency as well as investment-friendly environment," Goel adds. "Hopefully there will be a gradual end to frequent face-offs between broadcasters and cable service providers."

He further says, "We believe that this regulation will not only provide a level playing field, but also act as a positive impetus for the growth and development of the entire distribution sector."

Welcoming the regulation, Prasar Bharati CEO KS Sarma says: "This will give DD's DTH venture a great push." Discovery India MD Deepak Shourie is very cautious. "We will have to study the Trai order before we can say something substantial," he says.

Hinduja TMT executive vice president, corporate services, Ashok Mansukhani believes the regulation will ensure a healthy and transparent competition in the market. "It is a consumer friendly regulation. If there is a formal agreement and both sides mutually agree for terms of agreement, then TV channels, if asked, should be supplied."

Win Cable director and ETC Networks chief executive officer Jagjit Kohli also believes it will have a beneficial effect on the industry. "Existing headends will have to pull up their socks and focus on service and other related areas as they have to prepare for competition. There is possibility of new headends coming up. Consumers will have choice. For broadcasters, declarations will go up in the long run."

National Cable & Telecom Association president and an independent cable operator in Delhi, Vikki Chowdhry, welcomes the overall thrust of the regulations as it will help the industry to grow, but feels some "loopholes still exist, which may be exploited by broadcasters to continue harassing cable operators."

According to him, "For the first time, broadcasters have been brought under some regulations, but they are likely to find some loopholes, which we had suggested Trai to plug. For example, cable ops may have to rush to Singapore to settle disputes with some broadcasters headquartered there, if TDSAT is unable to address certain issues."

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