TV networks flay Trai for ad regulation

NEW DELHI: The Telecom Regulatory Authority of India does not have the mandate to regulate advertising and any content-related issues, according to a majority of the stakeholders who have responded to the review call by the broadcast sector on capping ad duration on television channels.

The consumer rights organisations or individual consumers, on the other hand, have welcomed Trai‘s decision to regulate advertisement time. Some have also called for a Consumer Redressal mechanism to check violations as they find the endless running of ads on certain genre of channels a serious irritation.

The Advertising Standards Council of India (Asci), however, is not among the forty-odd respondents as the Consultation Paper does not deal with content but only with regulatory issues relating to duration and timing of commercials.

Indian Broadcasting Foundation, the apex organisation of television broadcasters, says the paper “appears to have been issued in an injudicious manner in so far as it reflects on the Authority’s power to regulate content on television channels”.

The present consultation paper posits that the heavy reliance of Indian broadcasters on advertising revenues is due to the “non-addressable nature of the cable TV networks,” and “gross under declaration of the subscriber base”.

“The under-representation of subscription revenues in the business model of Indian broadcasting is also due to a decade of excessive regulation of subscription models -- including tight retail rate regulation, increasing interference in wholesale rate-setting, and maintenance of “must-provide” mandates that prevent platform differentiation and unnecessarily restrain competition,” the IBF said.

The IBF further added that over-regulation was responsible in creating the industry’s current imbalances. It suggested that the key to resolving the imbalances lies in progressively remedying the ills at their cause.

The federation also pointed that Indian broadcast industry has one of the lowest monthly ARPUs in the world under $4 vs $60-120 for developed nations, as per Ficci-KPMG 2012 report.

While reiterating Trai’s own position as stated in Tdsat, Star TV India says the regulator has no jurisdiction to regulate advertising as per extant laws, rules and regulations.

Star argues that any shrinking of advertisement space is likely to impact broadcaster’s ability to offer superior and differentiated content to their viewers at an affordable price. It says Trai’s proposed recommendations are retrograde, will substantially increase the costs to consumers, will burden advertisers with higher costs, and will drive out marginal and smaller advertisers from advertising their products on national television.

Zee TV says that curtailing advertisements would mean infringing on the fundamental right of free expression quoting Supreme Court judgments to say that any kind of restriction on media ads would be violative to the fundamental rights of Speech and Expression as enshrined in the Constitution.

It has also questioned why TV is being targeted while newspapers are free to carry any amount of advertising. It suggested that the issue of advertising which is purely a content issue should be left to self-regulation as at present any attempt/suggestion to regulate the same would be highly detrimental for this sector. It also said that several TV channels will be forced to close down with severely restricted ad time.

Times Television Network says it would be better for Trai to concentrate on smooth switchover to digital access systems instead of spending its time on issues like advertisements, which have been clearly addressed in the CTN Rules. While stressing that Parliament has already passed the CTN Rules and Trai cannot override those, it also questions the regulator making a difference between free to air and pay channels as arbitrary, unwarranted, and not based on sound facts.

A response by Vijay Television and Asianet Communications on behalf of South Indian regional channels questions the jurisdiction of Trai. It says the paper fails to provide adequate justifications for a differential regime for Pay and FTA channels and also does not take into account the unique business model of regional broadcasters who operate in challenging regime of sky rocketing content acquisition costs and an onset of Carriage spends which makes mockery of the “Pay revenues” earned from the MSOs and cable operators.

They say regulation in advertisement would eventually lead to heightened subscription fees, the burden of which may have to be ultimately borne by the consumer. Additionally, this could lead to further reduction in the quality and variety of content, thus leading to the commodification of the entire content industry.

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