Thursday, 11 September 2014

Phase III & IV get Extension

In a very silent way Modi government has extended the deadlines for mandatory digitization Phase III and Phase IV to end of 2015 and 2016 respectively. I feel this is a very good move keeping in mind that the feedback received by the Ministry for Phase I and II was not very encouraging. Indigenous manufacture of STB is the biggest worry of the Ministry. Consumer end problems like rate increase, lack of choice of content, poor quality STBs, no itemized billing is the second major problem. Cable Operators are a happy lot as this is a big relief for them but Broadcasters are very unhappy.
Broadcasters are also very disappointed with TRAI for its recommendations on Tariff for commercial subscribers as now they cannot deal with commercial subscribers on their will losing tons of money. They have already challenged the order simultaneously in the High Court as well as in the TDSAT. IBF has gone to TDSAT where as Star TV has approached the Delhi High Court against TRAI order that prohibits broadcasters to do any agreements directly with hotels and commercial establishments which do not charge their subscribers, specifically for Cable TV service. However, all hotels and commercial establishments, those install their own headends are free to negotiate with the broadcasters directly. 
Thus ordinary commercial subscribers will be treated at par with domestic subscribers as far as Tariff is concerned. They can get their service from any of the platform service distributors including Cable Operators, DTH, IPTV or HITS Operator. Broadcasters feel it is impinging on their fundamental right to do their business in their own way. 
It appears that fate of the industry lies in the hands of judiciary now. Almost every regulation of TRAI, Tariff Order and amendment in Cable TV Act have been challenged in the courts by one or the other stakeholders. This is not a healthy situation. Hope the new government will also look into this aspect of digitization and find a viable solution for a smooth switchover to new technology.
Number of LCO associations has approached the High Courts in their respective states to fight for their fundamental rights. Revenue share and Tariff Orders of TRAI have also been challenged in the Supreme Court. Broadcasters are fighting court battles against cap on advertisement duration in TV channels, commercial tariffs where as MSOs, LCOs and Broadcasters are fighting out their battle on the issue of RIO (Reference Interconnect Offers) in TDSAT. From all these court battles, one feels that neither the Ministry nor the regulator have done their job properly after understanding the industry as it exists on ground today. It needs a thorough analysis and a relook at the regulations so that the industry gets organized for growth and not chaos. 
TRAI has also issued a consultation paper on levying financial disincentives on erring MSOs and LCO ranging from Rs. 20 to Rs. 100 for different violations. I don’t think this is the time to do this when TRAI has no way even to monitor what is happening. There is also another consultation on the definition of AGR for calculating the Licence Fee in telecom and broadcasting industry. All stake holders must participate wholeheartedly.

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