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TRAI’s Digital Cable Regulations: Fixes Carriage Fee, Channels, Tariffs

In what is a fairly significant development for the digital cable ecosystem in India, the Telecom Regulatory Authority of India has fixed the upper limit of Rs 100 per month for Multi System Operators,who will have to offer a minimum of 100 free to air channels comprising of at least 5 channels of each genre namely news and current affairs, infotainment, sports, kids, music,
lifestyle, movies and general entertainment in Hindi, English and regional language of the concerned region, in addition to 18 channels of the Public Broadcaster and Lok Sabha TV under the Basic Service Tier (BST).

Interestingly, the subscriber can choose between the BST or 100 channels of his own choice. Some of the other regulations part of the Tariff Order and Interconnection Regulations for the Digital Addressable Cable TV Systems are:

Channel Packages

– All channels (pay and free-to air) to be offered on a-la-carte basis to subscribers.

– The MSOs can fix the retail tariff and also package and price offerings. However, the sum of the a-la-carte rates of channels, forming part of a bouquet, shall not exceed 1.5 times the rate of the bouquet. Further, the a-la-carte rate of any channel shall not exceed 3 times the average channel rate of the bouquet.

–  It shall be open to the subscriber to subscribe to the BST or one or more FTA channels or one or more Pay channels or bouquets offered by MSO or any combination of these.

– In case a subscriber chooses Pay channel(s) with or without Free to Air channel(s) the MSO can fix a minimum monthly subscription not exceeding Rs. 150. If the total value of the channels/ bouquets opted by the subscriber exceeds Rs. 150, then actual subscription charges has to be paid.

Minimum Number of channels

– The Authority has also mandated MSOs to carry a minimum of 500 channels from 1.1.2013. However, keeping in view that smaller MSOs having less than 25,000 subscribers may need some additional time for building the capacity, the TRAI has given them time up to 1.4.2013.

To ensure that the consumer is not adversely affected, the Authority has prescribed that every MSO should have a minimum capacity to carry 200 channels from 1st July, 2012. Authority expects that all the MSOs operating in areas of Phase-II onwards to take suitable measures to enhance the channel carrying capacity to 500 channels.

– Only those MSOs that have the requisite capacity, can invoke ‘must provide’ clause. The broadcasters shall not provide their channels to MSOs who have channel carrying capacity of less than 200 channels immediately and less than 500 channels from 1.1.2013 or 1.4.2013 in case of smaller MSOs.

– The Broadcaster would enjoy ‘must carry’ provision from 1.1.2013 or 1.4.2013 as the case may be, for Hindi, English and channels in the regional language of the concerned area. The provision relating to amount charged by broadcaster to MSO remains unchanged. They can charge a maximum of 42% of the rate, they charge in the non-addressable (analog) systems.

Carriage Fee

– The TRAI has addressed the issue relating to the Carriage Fee. Keeping in view the fact that substantial investment for implementation of Digital Addressable Cable TV Systems is made by the MSO and the cost involved in carriage of channels, the Authority has decided that every MSO may fix the Carriage Fee. However, it should be published in the Reference Interconnect Offer and applied in a uniform, non-discriminatory and transparent manner. The Carriage Fee cannot be revised upward for a minimum of 2 years. The Authority would intervene in case it is felt that the Carriage Fee is unreasonable.

Revenue Share

– The July 2010 Tariff Order of the TRAI provides that the revenue share between the MSO and LCO shall be based on mutual negotiations. The Authority has now prescribed that in case the mutual negotiations fail, the revenue share shall be in the ratio of 55:45 (MSO: LCO) for BST or FTA channels.

– The revenue share for Pay channels or bouquet of Pay channels with or without FTA channels shall be in the ratio of 65:35 (MSO: LCO).

Download: Regulations (pdf)

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