Regulators

Upscale commercial establishments to pay market rates for pay channels: Trai

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MUMBAI : In an order issued today, the sector regulator has decreed that pay broadcasters will now be able to charge "market rates" to more upscale hotels and big commercial establishments that access their channels.

The Telecom Regulatory Authority of India (Trai) has stated that the tariffs of pay channels as well as set top box rentals will be left to mutual agreements and market forces in both CAS and non-CAS areas "subject to restrictions on maximum bouquet price in relation to sum of individual channel prices".

For the purpose of tariff regulation, Trai has identified two categories of commercial subscribers. One category consists of hotels with a grading of 3 star and above and heritage hotels. This category will also include any other hotels, motels, Inns and such other commercial establishments providing board and lodging and having 50 or more rooms. In the second category would fall all other commercial establishments.

The regulator has grouped the rest of commercial establishments into the residual category and decreed that the same rules that govern ordinary cable subscribers will apply to them also, both in CAS and non-CAS areas.

Taking note of a point made by pay broadcasters with respect to clubs, pubs and other such establishments, Trai's tariff orders also provide that whenever "any commercial cable subscriber uses the programmes of a broadcaster for public viewing by 50 or more persons on the occasion of special events at a place registered under Entertainment Tax Act, then also the tariff will have to be mutually decided between the parties concerned.

The pricing formula Trai has worked out is:

I. The maximum retail price of any individual channel shall not exceed three times the average channel price of the bouquet of which it is a part.

For example, if the maximum retail price of a five-channel bouquet is Rs 150 per (average channel price of Rs 30), the maximum price an individual channel can be priced at is Rs 90.

II. The sum of the individual maximum retail prices of the channels shall not be more than 150 per cent of the maximum retail price of the bouquet. Therefore, the total a la carte pricing all these five channels together can charge would be a maximum of Rs 125 (Rs 150 + Rs 75).

Trai issued the order after the Supreme Court agreed with its argument that in order to ensure an orderly growth of the telecom sector in the country, it was necessary to have differential tariffs for commercial and non-commercial subscribers of conditional access system (CAS).

Trai's submission was in response to a petition filed by the Association of Hotels and Restaurants, which challenged an order of the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) that upheld the dual rates.

Trai had placed the draft Tariff Orders, both for CAS notified areas and non-CAS areas, along with a letter to stakeholders inviting comments by 10 November.

Broadcasters see Trai's decision as a positive step towards generating subscription revenues. "Business will see at least a three-fold jump," says Novex Communications head Ketan Kanakia.

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