Thursday, 10 September 2015

TRAI Open House becomes a battleground for stakeholders

The Open House Discussion (OHD) on commercial tariffs held on 18 August at PHD Chambers of Commerce at Delhi, became a battleground between broadcasters and distribution platform, with broadcasters demanding more revenue from commercial establishment and distribution companies wanting no distinction between commercial and domestic subscribers.
 The issues discussed included the differentiation between domestic and commercial subscribers for provision of TV signals, the criteria for drawing distinction between ordinary subscribers and commercial subscribers, tariff framework both at wholesale and  retail levels, transparency and accountability in value chain to effectively minimize disputes and conflicts among stakeholders and engagement of broadcasters in the determination of retail tariffs for commercial subscribers.
Broadcasters pitched in with the argument that-
  • Putting a ceiling on tariff will not help in promoting and protecting the interests of the ordinary consumers but will serve as an aberration to the growth story of the sector
  • Commercial and residential subscribers are two completely different categories. The residential subscriber consumes television content for his or her own use whereas the commercial subscriber provides television content for his customers to propagate the business of his establishment.
  • All along it has been TRAI’s consistent stand that there is a distinction between ordinary and commercial subscribers and it should be retained.
  • Tariff applicable for ordinary subscriber, which is frozen since the year 2004 (which is a subsidized tariff) cannot be applied to commercial subscribers.
  • Sectors such as oil & gas, power and water have differential tariffs for commercial and domestic subscribers.
  • The place of viewing the TV signal and type of usage of TV signals is inherently different in both these categories.
However, Hotel Industry, Cable Operators and MSOs thought the other way arguing that-
  • No Tariffs are subsidized. The earlier commercial tariff was fixed during CAS regime as TRAI had fixed the ‘Pay’ channel rate to an MRP of Rs. 5/- for cable TV consumers so that they are not burdened with exorbitant prices, broadcasters were demanding. Hence the differentiation was made between the commercial and domestic subscribers. Now there are no subsidies and no fixed tariff.
  • Services like power, water, gas etc. are highly subsidized as there is a supply constraint. There is no such constraint in Digital cable and Broadcasters are free to charge what they want. Hence there cannot be any difference whether a consumer views a TV at home or in a hotel.
  • A consumer does not go to a Hotel or restaurant to watch TV. If commercial establishment pays more for the TV channel, it will pass on the cost to consumers, ultimately burdening the consumer.
  • Differential pricing in digital regime is futile as each connection is made through an STB making it accountable. There is total transparency. Cable TV connection in a commercial establishment has the same content and should be distributed directly by the Distribution platform.
  • It should be left to the Commercial establishment whether it wants to deal directly with the broadcaster or get service through a distribution platform. In case it wants to deal directly, it must get registered with the Ministry as a distribution platform like MSOs and DTH.
  • Pay Broadcasters themselves are not transparent. They offer different Rates to National MSOs, DTH operators, HITS or Independent MSOs. There is no uniformity in pricing. They cannot be left free to exploit the market the way they want.
  • How can one control the content consumption on OTT and mobile services? Most of the broadcasters are giving free content to mobile or internet users. 
Broadcasters have not contributed a single penny in the process of Digitalisation where as they are the biggest gainer so far. The process has been mandated by the government in larger public interest and not for the benefit of broadcasters only. All other stake holders including MSOs, Independent MSOs, LCOs and Consumers are burdened due to heavy investments but no returns, just on the mandate of the government.


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