The Federal Communications Commission’s chair Ajit Pai and the Telecom Regulatory Authority of India’s RS Sharma are speaking at FICCI e-FRAMES 2020. Jyoti Jindgar Bhanot from the Competition Commission of India and Atul Kumar Tiwari, IAS are also on the panel discussion. Follow along on their remarks below. Watch live here.
7:10pm: Ajit Pai on his legacy (after quipping that he’s not going anywhere): Making technology like broadband and technology available for more Americans.
RS Sharma: One milestone which was achieved was the digitisation of the entire network. This has ensured that there is transparency in how much subscribers there are. In the analog era, that was not there. While everyone else in the value chain had gotten the benefits of digitisation, the consumers were not getting the benefits of that. We have ensured consumer is beneficiary in that process. If every channel is forced on every consumer, that’s not a fair deal. We ensured that the consumer gets to purchase what he wants to watch, and pay only for that.
In terms of size, the broadcasting sector is small compared to telecom sector. But the number of disputes that happens from broadcast is 95% of all disputes. After the new framework came in, the number of new disputes came down. We believe there are fewer disputes among service providers, MSOs, broadcasters, and other cable TV operators. If those disputes are reduced, there is certain amount of clarity and transparency. The fewer the disputes, the more people will be able to focus on their core business.
It’s not the legacy of an individual, but of an organisation. It’s the entire organisation that has been able to do these things with the help and active participation from stakeholders.
7:06pm: Atul Kumar Tiwari, Ministry of Information and Broadcasting, on streaming regulation: We are asked about this many times. Only thing I can say without causing any controversy is that we have had a discussion with OTT providers through an association. We invited them to come back to us with some kind of self regulatory mechanism. We have given them some time, 100 days. We expect them to get back to us with their own recipe for regulation. Mr. Khare was emphatic in saying that he wanted a light touch regulation.
There will be convergence taking place in the future. Maybe we need to relook regulation altogether. The problem is since this is streaming services, under the regulatory system it is IT Act. I would sum it up saying that we are aware of the problem, and we’d like to have a light touch regulation, and have industry come forward. There has to be some regulation on streaming content.
6:58pm: Moderator asks about heavy handed TV regulation.
Sharma: I’ll burst some of the myths and impressions created about the regulation of this sector. The broad objective of TRAI is to ensure the interest of consumers, stakeholders, distributors, creators, etc. and that there is growth of the sector.
Since 2004 to 2017, there were price caps. You talked about pricing regulation. There was a price cap on category. For old channels, new channels, entertainment channels, etc, till 2017 this system was in place.
If you put these price caps, it disincentivizes producers of the content. As a producer, I should have the choice. Why should I keep any control on pricing? Why should I cap it?
This is one thing that has done, there is no price cap on any channel. This price cap was abandoned in the new regulation. NTO 1.0 started in March 2017. The Supreme Court declared that this is a perfect framework, but that is a separate issue.
Second is, you are telling how much should I package stuff. You cannot package stuff in a way– individual channels can package however they want. But if you do a bouquet of channels, ou can’t have it done in such a manner that it makes the entire thing a perverse exercise. You are making a fool of the customeer. This is not the way. You should make the whole thing transparent and have transparent rationale for the system.
6:52pm: Pai: Our goal is not to saddle OTTs with regulations that broadcasters face, but to relax regulations for broadcasters. On Net Neutrality, it looks at marketplace of today through the prism of yesterday. Regulators can no longer take a snapshot of the market and regulate around that. Our goal is to preserve the basic structure of competition in the marketplace that does not single out a sector for pre-emptive regulation. It will disincentivise investment.
6:47pm: Ajit Pai: Markets are far better positioned to deliver consumer value. In the US, I have opposed pre-emptive regulations that don’t serve the marketplace well. Broadcast companies in the US are singled out with rules written in 1995 when the market was different. We tried to unshackle market players to allow them to compete fully and fairly. In advertising, we’ve tried to encourage all agencies to have a more holistic view on what competition is.
6:44pm: Jyoti Jindgar Bhanot, Competition Commission of India: The erstwhile MRTP was replaced with the Competition Act. This focuses on promoting competition rather than curbing monopoly. Despite its benefits, healthy competition may not emerge on its own. Liberalised markets cannot be presumed to be competitive. Without solid oversight and necessary intervention, we could see dominant firms misuse their market power, and mergers may happen where innovation is curtailed. In that process, the consumer loses.
It should be ensured that oversight isn’t locked into legacy architecture, that it is regularly fine-tuned. The competition law in its present avatar has been around for ten years. Being an economic law, it rests on the sound foundation of economic principles. The act’s assessment is a case-to-case economic assessment, which allows enough room for flexibility to respond in a dynamic manner.
The act has a very futuristic– the CLRC committee reviewing the act found that it was robust enough to deal with challenge from new-age markets. This is reassuring. In the context of technology, where convergence has changed nature of services making them difficult to box into a category, markets are becoming complex. Urgence has brought in a lot of efficiencies. There is, however, room for anti-competitive action, in terms of agreements among the players, as products become vertically linked.
Platforms could give preferential treatment to one vis-a-vis others. As players get market power, winners tend to take all, there are issues related to competition. A very dynamic approach is kept. The response has to be such that we do not, through our intervention, scuttle or chill innovation.
6:35pm: Atul Kumar Tiwari, IAS: Atul Kumar Tiwari: On the OTT or VOD regulation, there is debate around what should be required, etc. But we’re waiting for their response.
6:30pm: Sharma: With distribution, DTH providers, cable TV providers, are also providing broadband services. Broadcasters and consumers are taking advantage of OTT. Television will continue, but it is proliferation of cheap data that will drive OTT services.
I for one don’t think there is a huge regulatory burden on the sector. The industry thinks the regulator is heavy-handed, and regulator thinks they are light touch. The basic approach TRAI has had in regulating this sector is that we have adopted a light touch approach and allowed market forces to operate in this space. We believe that market is the best determinant and accelerator for adoption of new technologies and satisfying consumers, so long as there is fair play, transparency, non-discrimination. Then, we don’t need to intervene.
But there are certain areas where we feel that from a consumer perspective, consumers deserve to know the cost of what they are watching, and whether there is transpareancy there. This is something we have been concerned about, that consumer does not suffer in the process. Competition should give full freedom of choice.
So after a long time in 2017 we brought about a framework centred on consumer choice. That has been successful that consumers have a choice in what they watch. Consumers being price sensitive also have an idea on the value of what they are watching. We introduced nework capacity fee concept, so that there is fixed fee to pay. Overall we wanted to ensure that the real choice lies in the hands of the consumer.
That framework was litigated, and in December 2018 we were able to introduce it. Certain aberrations came out, which we rectified, which is called NTO 2. Broadly now we are in a situation where there is complete transparency, and we hope things will play out subject to these overarching consideration of consumer choice and non-discrimination.
We have also come up with a channel selector app so that consumers can select the channels they want to watch from their distributor via an API call that informs them what they have and change their subscription. This is complete privacy protection, and that is also another initiative that we have taken.
As technology moves forward, with 5G, and so on, there will be more disruption, and change watching habits. Emerging trends will necessitate a new framework. Regulation should ensure that technological developments are not throttled or scuttled. They should be allowed to grow and take place.
6:23pm: RS Sharma: Our mutual respect (with Pai) has grown. We have been learning both ways, and largely it is the FCC that has been providing leadership in telecom and broadcasting. We are learning from chairman Pai’s efforts. As chairman Pai pointed out, technology changed the landscape of the broadcasting sector. ICT has been one of the greatest disrupters and changemakers. This, especially in the broadcasting sector, both distribution and production side, the value chain has undergone a change. Convergence has started, and the same device can do multiple jobs, from phones you can watch series. You can have IPTV and internet from cable. Habits have changed. This has churned the sector and provided new opportunities. Some technological factors have been 4G, telecom networks, smartphone proliferation.
6:19pm: Pai: Gaming will see a great growth in gaming. More than 200 million people watch gaming content on YouTube, and many on Twitch. Netflix CEO Reed Hastings said that Fortnite is one of their biggest competitors.
6:15pm: Ajit Pai: Thanks to FCC’s efforts, we have opened the door to the rollout of WiFi 6, which is 2.5 times faster, offering gigabit speeds on mobile devices. 5G will be a gamechanger. 5G can deliver data speeds in gigabits, not megabits, with lower latency. Wireless networks that support thousands of devices today could support millions soon. When it comes to entertainment, we see breakthroughs in AR and VR.