The Indian Broadcasting Foundation (IBF) has moved Bombay high court against the Telecom Regulatory Authority of India’s (Trai’s) amended new tariff order (NTO), first issued in December 2018 and implemented in February 2019. The case is listed for hearing in the high court on Tuesday.
Meanwhile, the telecom regulator has filed caveats in all major high courts against issuing a stay without hearing what it has to say in the matter. A Trai executive refused to make specific comments on the caveats but said Trai will take legal measures.
The broadcasters that have come together under the IBF umbrella to take on Trai include Star India, Zee Entertainment Enterprises Ltd, and Sony Pictures Networks.
On 1 January, the sector regulator notified new rules that permitted television broadcasters to include a channel in a pack only if it wasn’t priced more than Rs. 12. Earlier, this limit was Rs. 19.
When Trai’s original NTO was implemented in February 2019, it received much flak as it raised the price for consumers for like-to-like entertainment. The NTO was aimed at allowing consumers to choose a la carte channels and hence bring their cable bills down as it mandated that each channel should be priced individually. However, it resulted in the opposite.
Media industry experts say that broadcasters priced their popular channels at Rs. 19 and less popular channels at a very low price and then bundled and offered them at a steep discount. This led to consumers opting for packs rather than buying a la carte channels, defeating the purpose of the NTO.
The amended NTO is encouraging a la carte choice and that has irked broadcasters as it will push them to drive their prices down affecting their subscription revenue. Broadcasters have to notify their new prices, which will be effective 1 March, by 15 January.
The new order or NTO 2.0 as Trai calls it, has also allowed the distribution platforms owners (or DPOs such as cable operators and DTH companies) to increase the number of free-to-air (FTA) channels in their bouquet to 200 with a network capacity fee (NCF) of Rs. 160. Earlier, only 100 FTA channels were allowed in the bouquet for Rs. 130.
Broadcasters argue against DPOs being allowed to charge ₹160 for channels that are free. Besides, according to a broadcasting company executive, owners of distribution platforms will not allow subscribers to choose their own channels as they will push their own set of FTA channels, which will be included on the basis of the carriage fee. Carriage fee rates have been fixed but these are not likely to be adhered to, said media consultant Chintamani Rao. “Despite digitization, broadcasters find it difficult to pick money from the market. The industry still works on mutually agreed upon subscriber numbers and hence revenue. So it is hard to believe that carriage fee limits will be followed,” he said.
A broadcasting company executive who did not wish to be named wondered why Trai, which doesn’t want broadcasters to bundle or push more channels, should it allow distribution platform owners to push their free-to-air channels.
NTO 2.0 is a fine-tuning exercise, Trai said at a press conference in Delhi on Monday. “The purpose of NTO always was to ensure transparency and non-discrimination. We just felt a few things were either left out or distorted in the earlier provision and the idea was to straighten those out, provide more content to the consumer at the same price,” said Trai chairman R.S. Sharma. Livemint