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TRAI on DTH: Local Advertising, Value Added Services, Radio; Content Vs Carriage

DTH has made tremendous headway with almost 11 million subscribers today. A plethora of issues have risen, reflecting a dire need for more regulations and guidelines to govern the upcoming industry. Indian telecom regulator TRAI has noted some of them in its recent consultation paper, which you can read here.

We’ve picked out some comments that we found interesting, and may set a precedence in India for emerging segments like IPTV and Mobile TV, as well as advertising and “Value added services”  on these carriage services. Do note that companies like MapUnity, Indiatimes, MakeMyTrip, Bharatmatrimony, Shaadi and others are providing value added services to DTH operators. Also, we’ve covered an interesting patent filed by Alcatel Lucent in India, of advertising on IPTV.

Ad-Free TV & Local Advertising On DTH

TRAI has a brilliant proposition of supplying “clean feed” – TV without ads! The regulator has asked stakeholders to come up with methods on how a potential demand by a user to supply TV without advertisement will be dealt with. This leaves the door open for DTH operators to insert city specific advertisements. 

TRAI also mentions that responsible advertising will need to be brought to DTH operators who transmit local advertisements independent of broadcasters.  They could have to adhere to Program code and Advertisement Code if they execute the sale and carriage of advertisements.

VAS Providers To Become Broadcasters?

The definition of value added services such as Movie-On-Demand, Pay-per-View, Active Learning, Active Matrimony, Active games and News active, among others, being offered by DTH providers is also changing. Are these ‘services’ channels? If so, they are not registered by the central government for viewing in India and are hence flouting the rules. If not, they require specific licenses.

DTH, according to Indian law, cannot be used for other modes of communication, including voice, fax, data, communication, Internet, unless specific license for these value-added services has been obtained from the competent authority.

TRAI has suggested an approach that could result in new business models in the industry, the press release said. Existing DTH operators could hive-off their VAS divisions into separate and independent entities within a stipulated period. Once they do so, these entities will become broadcasters, who are required, under the general policy governing broadcasters, to provide these VAS to all DTH providers on a non-discriminatory basis.

Users should also be given a choice to not opt for these services, TRAI believes. A consumer-friendly move that we do not expect to be passed.

Radio on DTH

Some DTH operators are now providing radio broadcasts (such as WorldSpace on Airtel Digital TV), and a decision on whether radio broadcasts should be brought under the interconnection regulations that cover TV channels will soon be taken.

Broadcasters Versus DTH Providers – Content Versus Carriage

Antagonism continues between broadcasters and DTH operators. DTH operators had approached TRAI to check the exorbitant rates being charged by broadcasters. Broadcasters were charging DTH players Rs 15-20 instead of Rs 5 per pay channel per subscriber, according to the Economic Times. In April 2008, TRAI mandated that broadcasters had to provide their bouquets and channels to the DTH operators at 50% of the rates at which they were offering to cable TV operators, Rediff reported.

Now broadcasters are complaining that while they are required to provide signals of their TV channels on non-discriminatory terms to all operators in view of Clause 3.2 of the Interconnect Regulations, there is no corresponding obligation on the part of the operators to carry their channels. The carriage fee being charged is also being raised higher and higher, they claim. TRAI will have to step in again to set a ceiling fee for carriage charges.

How About Letting Us Pick Channels?

According to DNA, the Supreme Court of India recently passed an order giving Cable TV and Condition Access System users the right to select channels of their own choice. The order did not discuss if this will hold for DTH consumers too.TRAI should also consider allowing the benefits of unbundling to flow down to consumers. DTH users deserve the choice of picking channels they want to watch instead of being given a pre-determined bouquet. TRAI has mandated that broadcasters offer individual channels to DTH providers and not on a bouquet basis, so should this rule be passed down the chain to the user?

Grievance Redressal: More Power To The User

TRAI has made some basic amendments to its regulations for Quality of Service and grievance redressal system for DTH in the country. DTH providers can not change the channels during first six months of enrollment by the subscriber (or during the validity period in case of prepaid packages). If they remove or replace a channel, the provider has to reduce the tariff accordingly. Operators can not charge any fee towards visiting charges or repair and maintenance charges within the warranty period.

Fixed Rates

On request from DTH players, TRAI is considering imposing a tariff regulation. In the case of Conditional Access Systems (CAS), viewers pay a fixed amount per channel and a fixed rent for the set top box. The Telecom Regulatory Authority of India has made conditional access mandatory in 55 cities across the country by 2011. Tata Sky has filed a petition in the Punjab and Haryana High Court claiming that the absence of wholesale content tariff regulation for DTH platform has created an entry barrier, as well as bringing pricing and packaging disadvantages when compared to CAS operators.

A Basic Package

CAS users have the option of choosing a basic service tier, much like a basic internet package offered by BSNL. The regulator has put a cap on the monthly rate – charging Rs 82 a month for 30 free-to-air channels, and Rs 5.35 for an individual channel. Will DTH providers launch basic tier services at a fixed monthly rate?

Currently, there is no standard tariff package for set top boxes for DTH, whereas CAS users have a standard monthly rental. TRAI has asked stakeholders what mechanism will allow DTH operators to provide a basic tier service without users having to put a downpayment on the set top box and if a similar fixed rental as in the case of CAS set top boxes is the panacea.

The TRAI Consultation Paper can be downloaded here.
Responses will be received by end of March, the release said.

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