Regulators

TRAI draft tariff order skewed in favour of DPOs, will harm industry: IBF

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NEW DELHI: The Indian Broadcasting Foundation (IBF), an apex body of broadcasting companies, has criticised sector regulator TRAI for over-regulating and proposing draft guidelines on tariff and interconnection that are skewed in favour of distribution platform operators (DPOs).

Responding to Telecom Regulatory Authority of India (TRAI) draft orders relating to tariff, inter-connections and quality of service, IBF said the new regime will lead to “de-growth” of the industry and discourage investments and production of good quality content in the television industry.

Pointing out that the proposed regulatory regime “regresses rather than advances”, IBF in a lengthy reply has said with over 830 channels for consumers to choose from and a large pubcaster offering of over 100 private and public TV channels, whether there a “need to regulate all aspects of a set of 200 odd pay TV channels”.

"The question for the Authority would be, is there proven evidence of market failure that a dire need has arisen to over-regulate these 200 odd pay TV channels(?). We are of the firm belief that there is no compelling reason to regulate these channels and, accordingly, only a light touch regulation, if at all, ought to have been proposed,” IBF has submitted justifying its criticism of  draft  guidelines.

Contending that pay TV channels (read cable and DTH services) were not essential services IBF counters there was no compelling reason to regulate these channels. “The present tariff order is based on the ‘erroneous premise’ that pay TV channels are essential services,” the broadcasting industry body said.

Citing international copyrights and IPR laws, IBF pointed out that whole exercise undertaken by TRAI was in direct conflict with the provisions of the Indian Copyright Act, 1957.

According to IBF, the proposed tariff and inter-connect orders conflict with the Copyright Act in the following ways and need to be "harmonised":

a.       The proposed tariff order(s) that impose restrictions on nature of content, prices of channels, mandated discount caps and commissions, manner of offering, etc have to be reviewed and modified in the light of specific copyright laws providing freedom to broadcast organisations to charge royalties and any other consideration/fees for their works and BRR in accordance with the market demands and contract laws.

b.      The draft interconnect regulations issued by TRAI that take away the broadcast organisations’ exclusive rights to deal and imposes restrictions on their contractual abilities and takes away their ability to negotiate the terms of trade need to be reviewed and modified to harmonise the same with the provisions of the Copyright Act pertaining to voluntary licensing and assignments by Broadcast Organisations by permitting mutual negotiations.

c.       The existing commercial tariff orders and regulations issued by TRAI in relation to commercial establishments is also at odds with copyright laws in as much as the Copyright Act clearly provides broadcast organisations the right to charge differential rates of royalties and license fees on commercial establishments vis-a-vis domestic/residential subscribers.

Going a step further, IBF has raised questions over transparency and the manner in which draft guidelines were issued: “The draft consultations also do not meet the threshold of transparency mandated by Section 11(4) of the TRAI Act 1997, which requires that the Authority will ensure transparency while exercising its powers and discharging its functions.”

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