TRAI issues consultation paper on tariff for commercial subscribers

MUMBAI: Three months ago, the Telecom Regulatory Authority of India (TRAI) revised the tariff rates for non-addressable cable TV areas which allowed a rise of 27.5 per cent in two stages. While this was for non-commercial subscribers, the regulator has now issued a consultation paper asking comments from stakeholders for the same with respect to the commercial subscribers.


The consultation paper states that the tariff for commercial subscribers has been an issue since 2005 when associations of hotels and restaurants challenged the various tariffs imposed by broadcasters in the Telecom Disputes Settlement Appellate Tribunal (TDSAT). Even though the TDSAT disposed off the petition stating that such organisations cannot be called consumers, it asked the Telecom Regulatory Authority of India (TRAI) to think about whether or not to impose a tariff regulation on them.


While the TRAI came up with two definitions for ‘ordinary cable subscriber’ and ‘commercial cable subscriber’, the appeal was challenged in the Supreme Court which then directed TRAI to frame separate tariff ceilings for non-commercial subscribers.


Even though the Regulator had come up with definitions and categories of such commercial subscribers, it was challenged by the Federation of Hotel and Restaurants Associations of India (FHRAI).


Now, TRAI has once again come up with a fresh definition for a ‘commercial subscriber’ and has asked stakeholders if they agree to it or if they have alternative suggestions. It says that a commercial subscriber means “any person, other than a multi system operator or a cable operator, who receives broadcasting service at a place indicated by him to a broadcaster or a cable operator or direct to home operator or multi system operator or head end in the sky operator or a service provider offering Internet Protocol television service , as the case may be, and uses such signals for the benefit of his clients, customers, members or any other class or group of persons having access to its commercial establishment.”


“Commercial establishment” means any premises wherein any trade, business or profession or any work in connection with, or incidental or ancillary thereto is carried on and includes a society registered under the Societies Registration Act, 1860 (21 of 1860), and charitable or other trust, whether registered or not, which carries on any business, trade or profession or work in connection with, or incidental or ancillary thereto, journalistic and printing establishments, educational, healthcare or other institutions run for private gain, theatres, cinemas, restaurants, eating houses, pubs, bars, residential hotels, malls, airport lounges, clubs or other places of public amusements or entertainment but does not include a shop or a factory registered under the Factories Act, 1948 (43 of 1948).”


"Shop" means any premises where goods are sold, either by retail or wholesale or where services are rendered to customers, and includes an office, a store room, godown, warehouse or work place, whether in the same premises or otherwise, mainly used in connection with such trade or business but does not include a factory, a commercial establishment, residential hotel, restaurant, eating house, theatre or other place of public amusement or entertainment.”


TRAI says that with these definitions it is shifting its focus from how the commercial establishments use the cable connection to defining it as one who avails the service from a broadcaster or a distribution platform operator (DPO).


In the earlier definition, the regulator had also divided commercial consumers into various sub-divisions of similarly placed entities depending on their size of business, paying capacity to clients etc. These were challenged several times in the past. Therefore, it has now asked stakeholders that if such a sub-division was not the right way to proceed, what would be an alternative way of dividing them into similarly placed groups.


Furthermore, three models of dealings between the commercial user and DPO has been given by TRAI and stakeholders are expected to select any one or give their own alternative model.


The first model is that the broadcaster publishes the rates for commercial tariff as a Reference Interconnect agreement (RIO) and then commercial subscriber negotiates. The second model is that the DPO publishes the rate and negotiations shall be done on the same. In the third model, both the aforesaid models shall be available to commercial customers wherein there shall be a competition among DPOs and between DPOs and broadcaster.


Furthermore, four options as regard to what shall be the tariff price have also been given:


First, the tariff for commercial subscribers is same as that for ordinary subscribers. Second, the tariff for commercial subscribers has a linkage with tariff for ordinary subscribers. Third, the tariff for commercial subscribers has no linkage with the tariff for ordinary subscribers but there are some protective measures prescribed to protect all the stakeholders. Fourth, the tariff for commercial subscribers is kept under total forbearance.


In the case of the third option several provisions have been suggested such as – broadcasters be mandated to offer all their channels on a-la-carte and specify rates. In case a broadcaster directly makes the signal available to the subscriber then the sum of a-la-carte rates of the channels shall not exceed one and a half times the rate of the bouquet of which they are a part and the a-la-carte rate of each channel should not exceed thrice the average rate of a channel of that bouquet. In case of a DPO, apart from the earlier two provisions, a-la-carte rates for all FTA channels should be uniform. The regulator also suggested that it should receive the RIO by either the broadcaster or the DPO and that a provider shall not deny channel signals unless subject to technical feasibility. 


If a stakeholder chooses the second option he/she has been asked to justify what the ceilings should be for each category of commercial subscribers.


Stakeholders have been asked to give their views by 27 June at the latest.


Click here to read full consultation paper

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