Mumbai: The Maharashtra Cable Operators' Foundation (MCOF) has written to the chairman of the Telecom Regulatory Authority of India (TRAI) and minister of information and broadcasting (I&B) Anurag Thakur to resolve pending grievances of local cable operators (LCOs) before 2 October.
According to the association, the inaction of TRAI has resulted in a loss of Rs 600 crore per year for LCOs. “The LCO fraternity will take steps to protect itself no matter the consequences on the rest of the value chain,” the letter reads.
The LCOs had sought TRAI intervention in the matter of unilateral imposition of inter-connect agreement by multi-system operators. It alleged that MSOs leveraged their portals to impose prepaid terms on LCOs while offering post-paid services to subscribers, and called for redefining the shareable revenues between broadcasters and cable operators, and asked TRAI to clear ambiguity in set-top-box ownership.
“Our subscribers and we are wondering as to why TRAI has not taken any step to implement the NTO 2.0 after the SC verdict refusing interim relief to broadcasters’ pleadings,” said MCOF. “The broadcasters and MSOs continue to milk the disempowered customers through packaging tricks and also deny a level playing field for standalone broadcasters. On a conservative basis, the forced excess payment towards content that subscribers do not want is Rs 50 per month."
Model interconnection agreement (MIA) and standard interconnection agreement (SIA) are signed between MSOs and LCOs for the retransmission of TV signals. MIA ensures that there is a mutual agreement in the terms set between LCOs and MSOs in line with the regulatory framework, to avoid disputes and ensure a level playing field. SIA provides for standard terms and conditions prescribed by regulation that may be adopted by MSOs and LCOs if they fail to mutually agree on an MIA.
During NTO 2.0 litigation, LCOs claimed that TRAI has incorrectly portrayed them as a conduit between MSOs and subscribers undermining the role they have played as last-mile owners bringing connectivity to lakhs of homes. LCOs fear that subscriber ownership may be transferred to the MSOs and will lead to broadcasters and MSOs benefitting disproportionately at the cost of LCOs.
LCOs have adopted a prepaid billing model for cable TV subscriptions to bring transparency and plug leakage of revenues. However, LCOs claim that while MSOs impose prepaid terms on the LCOs, they continue to offer post-paid services to TV subscribers by leveraging their portals. This has impacted their revenue collection.
“The payout of pay-TV channels to cable operators for retransmission of TV signals is much lower than the amount billed to the customer,” said MCOF. “This fact is visible at a glance at the P&L statement of MSOs who disclose Netted Content Costs,”, said the letter.
LCOs have asked TRAI to clear ambiguity on set-top-box ownership resulting in unilateral pricing without invoicing or service level agreement (SLA) to the subscribers.
The LCOs service 10 crore homes and employ five lakh semi-skilled personnel. The letter states that the sector is at a make-or-break point with thousands of crores invested in fibre infrastructure at risk of disuse and economical infotainment to 40 crore viewers. It said that LCOs' long list of grievances has been brushed aside by TRAI without any justification.