Regulators

TRAI always believes intervention should be limited to market failures: R S Sharma

TRAI has been criticised lately for over-regulating the industry

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KOLKATA: The cable and broadcasting industry has been despondent of late due to several new regulations. Many of the stakeholders have complained about “over-regulation” stunning the growth of the business and causing unnecessary burdens. The outgoing chairman of the Telecom Regulatory Authority of India (TRAI), R S Sharma, has refuted the claims reemphasizing that the authority has always looked at light-touch regulation. Sharma stated that TRAI has always believed intervention should be limited to market failures, adding that it has never interfered if the market is trouble-free. He addressed several controversial issues.

During a conversation with Governance Now MD Kailashnath Adhikari, Sharma has spoken in favour of the most controversial regulation of this year, the amended New Tariff Order (NTO 2.0). He said that the tariff order was brought to strike a perfect balance between consumer choice and industry benefits.

Sharma mentioned that while it has given new power to consumers to watch channels of his own choice, it has also given broadcasters the liberty to decide the pricing of their channels, distributors to have an independent source of revenue through network capacity fees. “In such a situation, it will be unfair to call it over-regulation,” he commented.

He reiterated that TRAI’s data shows that 90 per cent of the people watch only about 50 channels out of the 800-900 channels in the country. He also added that OTT platforms allow much more freedom to watch content compared to linear TV, and this is one of the primary reasons for the audience shifting to OTT platforms. After the implementation of NTO in last year, many long-tail channels shut their shops. “IBF’s statement is rubbish, and it brings fear in the minds of people,” Sharma stated, mentioning that the case is sub judice in court. 

Earlier this year, when the pandemic started hitting the ad revenue dependent broadcasting industry, TRAI issued a set of recommendations for a major overhaul of the country’s TV viewership measurement agency, BARC India, a joint industry body of the broadcasters, advertisers, and advertising agencies. Recommendations included an increasing number of people meters from 44,000 to 66,000 by the end of 2020 and 1,00,000 by the end of 2022. Many stakeholders commented that it seemed to throttle the entire system rather than reforming. 

“Audience measurement is a significant source for broadcasting to get advertising and program sponsorship. In fact, that is the only currency. An industry dependent on advertising for survival and growth, audience measurement is a critical activity. Broadcasting is one such sector that is largely dependent on advertising revenue. Broadcasters earned revenue Rs 45000 crore in 2019, 32000 crore was collected from advertising. This underlies the dependence on the flow of advertising, which largely hinges on the profile of their audience and popularity of the content, which is assessed by television audience measurement rating. It is imperative that the process of that measurement should be objective, fair, neutral, transparent,” Sharma commented.

“Some important recommendations are the need for structural reformation of governing of BARC to mitigate the potential risk of conflicts, bring transparency, and the confidence of all stakeholders on the TV audience measurement system. To create a credible and accurate collection of data, multiple data agencies need to be in competition, which would bring new technologies, research methodologies, and new ways to ensure better data quality,” Sharma further adds. 

According to him, technology is ever-evolving, and the TV rating system needs to be in tandem. While Sharma mentioned that TRAI only gave the recommendation of the constitution of BARC, he also stated that periodical reformations are needed. Many stakeholders raised the issue of huge investment in restructuring. He said that many reformations could be carried out in a frugal way on the back of new technologies.

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