A Pathbreaking Move by TRAI Regulating the TV Channel Distributors/ Aggregators is no easy task

Recent initiative of the sector regulator TRAI in regulating the distribution of TV channels from broadcasters to plateform operators and proposing to control or get rid of the channel aggregators/ distribution agents will change the entire scene of cable industry if implemented in totality.

The proposed amendments will definitely steer the industry to a positive growth required since long so that all stake holders can run their business lawfully, peacefully and profitably. 

This will also create a better environment to attract new investments in the industry. 

However, this fragmented and disorganized industry must be developed as a national infrastructure and not a vehicle for only TV channels.

Regulations not implemented Priority wise

Government is not taking up the regulations in a systematic manner according to priority of tasks. Regulations are being introduced arbitrarily and in a knee jerk reaction. That is why we don’t get any benefit from them and have not progressed in the digital era. Since this industry is the most disorganized service industry, regulations should have been preceded by sufficient planning and preparation considering the present state of the industry. Now we are putting the cart before the horse. 

For example, Ministry has given nationwide MSO licences to some vertical monopoly players, framed all regulations and deadlines to facilitate them and allowed them to access increased foreign investments to further grow their monopolies but now after these entities have reached a dominant position in some relevant markets, we are trying to restrict cross media ownership, control their monopolistic practices and exploitation of the consumers. Even in its recommendations for hiking the FDI limits, TRAI has remarked that it wants to bring FDI in broadcasting to bring the sector at par with Telecom Sector knowing fully well that only two or three of these media conglomerate will be benefitted by this who already enjoy a dominant position in the relevant markets. 

Broadcasting Sector can not be considered at par with Telecom Sector at this stage.

It is well known that Telecom sector has been organized from its inception. Both the sectors can never be placed at the same level. Government did everything to help the telecom industry to create the basic infrastructure where as Broadcast sector has not even come out of its fragmented and disorganized state. From regulators point of view the priorities in the broadcast business should be:

1. Consolidate the cable TV industry- Not by coercion but by restructuring to adopt a viable and profitable business plan for all stake holders.

2. Strengthen the networks including last mile infrastructure using broadband technology.

3. Control the ‘Pay’ Broadcasters who have been instrumental in creating a panic situation in the industry using their monopolistic and unethical ways and making the services unaffordable.

4. Curb the growing vertical monopolies and anticompetitive practices of two or three large media groups so that small broadcasters as well as distribution platforms can survive to consolidate.

5. Provide an administrative, legal, regulatory and financial environment to attract long term investments.

6. Provide financial support through subsidies and duties, tax incentives to make the process less painful. Telecom sector was given 15 years of tax Holiday at start-up and again, number of incentives are being recommended for them to build broadband infrastructure.

7. Most important is that any change at the macro level must not drastically disturb the existing consumer service environment for the existing 100 million cable subscribers because thousands of small scale players who own the last mile and earn their livelihood, cannot afford to lose a single connection by the way of black outs or poaching by DTH operators.   

Till the broadcast sector suffers from a weak infrastructure which is too fragmented, no reform will pass to the consumers. TRAI has overlooked this point while making the DAS regulations in which its emphasis has been to retransmit maximum number of ‘Pay’ Channels. 

At present regulations are being framed randomly in an unorganized manner, not to benefit the public but to help a few rich and powerful media groups on the whims of the government. This will never bring long term benefits.

Recent report by Business Standard news paper on the 'Top Media Companies' of India has revealed that there are three media companies who are in the billionaire club and will control the country's 156 million media market. Do we really need this situation?

By giving unrealistic deadlines for digitization without considering whether all existing subscribers can afford the new technology and whether the time lines are practical for every existing stake holder, we feel a deep damage has been done to the structure of the industry. Digitisation that would have ushered in an era of Digital Economy in the country has become the cause of ruin for many. We wonder how this will be made up now. 

Impact of Existing Regulations

a)Unrealistic deadlines have caused more than USD 400 million of foreign exchange to go out of country at a time when we are facing the worst economic crisis.

b)Mandatory total digitization is not the answer in a country like India which lacks tremendously in resources. What is the use of mandating a technology that cannot be afforded by majority of the people. We are still struggling with seeding of STBs in many cities of Phase-I and II.

c)MSO of 'pay' broadcaster Groups have created monopolies in majority of the TAM cities giving unfair treatment to small broadcasters, Independent MSOs and LMOs.

d)Helped DTH companies of large media groups to poach on subscribers of small cable operators harming their business during the transition period when they needed maximum support from the government.

e)In Phase I&II 25 millon subscribers have already come under DAS paying at least Rs 100 more than what they paid earlier every month.  Rs 2500 million additional revenue collected every month is being shared by the 'Pay' broadcasters, their three aggregators and National MSOs (Three belong to pay broadcasters). 

f)Increasing FDI limits before implementing 'cross media restrictions' and 'restrictions on monopolies in media' will enable the already dominating foreign players and some national players to bring in more foreign investments, mostly from their own subsidiaries, and increase their dominance which is not in the interest of Indian consumers and small players.

What TRAI has proposed in this consultation regarding distribution of TV channels through authorized agencies and aggregators is only the beginning of a positive phase and much more stringent actions are needed on the part of the Regulator, particularly in controlling the 'Pay' broadcasters who are the root cause of the disorganized state of the industry. These 'Pay' Broadcasters have never been regulated till date and still manage to earn favours from the government.

Source: http://cablequest.org/articles/regulations/item/3205-a-pathbreaking-move-by-trai-regulating-the-tv-channel-distributors-aggregators-is-no-easy-task.html
Source: http://cablequest.org/articles/regulations/item/3205-a-pathbreaking-move-by-trai-regulating-the-tv-channel-distributors-aggregators-is-no-easy-task.html