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TRAI attempts greater transparency via auditor empanelment

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NEW DELHI: While it remains to be seen if the provisions of the Interconnect draft will have a salutary effect on the cases pending before the Telecom Disputes Settlement and Appellate Tribunal but the Telecom Regulatory Authority of India appears to have learnt some lessons, at least as far as subscription and audit of systems go.

There are clear provisions that every distributor of TV channels will provide to the broadcaster complete and accurate subscription report for channels or bouquets of channels of such broadcaster within fifteen days from the end of each calendar month in the specified format.

It has been made clear that the broadcaster will disconnect the signals of television channels after giving three weeks’ prior written notice to the distributor if the distributor fails to provide the subscription reports under this regulation for immediately preceding three consecutive months.

On the basis of subscription report, the broadcaster will issue monthly invoice to the distributor for pay channels or bouquets of pay channels and such invoice will clearly specify the current payment dues and arrears, if any, along with the due date for payment.

The broadcaster will allow a time period of at least 15 days to the distributor for making payment from the date of receipt of invoice by the distributor.

The broadcaster will have no claim on any arrears amount which has not been specified by him in the immediate next three consecutive invoices issued after the due date for the invoice to which arrears pertain.

In case the distributor fails to provide the subscription report within the period of 15 days from the end of the month, the broadcaster will have the right to raise a provisional invoice for an amount increased by ten per cent of the licence fee payable by the distributor for the immediate preceding month, and the distributor will be under obligation to make the payment on the basis of such provisional invoice.

It will be mandatory for the distributor to carry out reconciliation, between the provisional invoice and the final invoice raised by the broadcaster on the basis of the subscription report sent by the distributor, within three months from the date of issue of such provisional invoice.

Similar provisions have been provided for every distributor to issue monthly invoice to the broadcasters with whom the written interconnection agreements have been entered into for carrying channels for payment of the carriage fee amount payable by such broadcaster along with the subscriber base in the target market and the subscription report for the channels of the broadcaster carried by the distributor of television channels in the format specified and such invoices will clearly specify the current payment dues and arrears, if any, along with the due date for payment.

Every distributor of television channels will carry out an audit of its subscriber management system, conditional access system and other related systems by an auditor to verify that the subscription reports made available by the distributor to the broadcasters are complete, true and correct once in a calendar year, and issue a audit report to this effect for the each concerned broadcaster.

TRAI itself may empanel auditors for this purpose and the distributors will have to compulsorily get the SMS audited by these. Any variation due to audit resulting in less than zero point five per cent of the billed amount will not require any revision of the invoices already issued and paid.

However, if a broadcaster is not satisfied for any reason, it may get an audit carried out not more than once in a calendar year.

If such audit reveals that additional amounts are payable to the broadcaster, the distributor will pay such amounts along with the late payment interest rate specified by the broadcaster in the interconnection agreement within 10 days and if such amount including interest due for any period exceed the amounts reported by the distributor to be due for such period by two per cent or more, the distributor shall pay all of the broadcaster’s costs incurred in the conduct of such audit, and take any necessary actions to avoid such errors in the future.

Every distributor will offer necessary assistance to auditors so that audits can be completed in a time-bound manner.

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