The Telecom Regulatory Authority of India (TRAI), India’s regulator for the media and communications sector, has pulled up major broadcasting companies for violating its pricing rules for TV channels.
The regulator, in separate letters addressed to Sun Network, Start Den (of the Rupert Murdoch group), Zee Turner, Taj (Ten Sports), Neo Sports & ESPN, directed them to correct their pricing structure immediately.
What irked the regulator was an attempt by these groups, who control DTH operators’ access to prime channels, to have their channels placed in the ‘basic package’ of the DTH operator.
When a channel is placed in the ‘basic package’ by a DTH operator, all his DTH customers (individuals) have no option but to subscribe to the channel as it comes bundled with the DTH connection itself. If the channel were to be placed in an ‘add on’ package — such as English Movies pack or Children’s pack — the end-customer is not forced to buy the channel. He can subscribe to them if he is interested in ‘English Movies’ or children’s programming.
Broadcasting groups, such as Star, Zee, Sun etc. are trying their best to get on to the basic tier so that they get the maximum revenue from the DTH operator concerned. For this, they were found to be offering discounts to DTH operators. They were charging a higher fee per subscriber per month if the DTH operator refused to carry the channels in his basic package, but lumped them in an add-on package.
TRAI held this to be against its tariff order — which said that a broadcasting group — such as the Sun Network — can offer two rates for its channels to a DTH operator, but only on the basis of how many channels are being purchased by the DTH operator from the broadcasting group.
In other words, if Reliance Big TV wants 10 channels from Sun TV, the latter can give a discount compared to if Reliance wanted to show only 5 channels from Sun TV. However, the TRAI tariff rules did not provide for any discount possibility based on whether or not the DTH operator was offering channels in basic tier or as add-on packages.
TRAI pointed out that channel rates were being jacked up if the DTH operator refused to thrust the broadcasters channels on all his subscribers, irrespective of whether or not the latter wanted them.
“.. you are claiming rates on the add on (discretionary) package, which on the face of it, is in violation of the said Tariff Order. The channel/bouquet rates offered by you have been linked to their placement in basic or add on package… You have admittedly prescribed different rates in the basic and add on package,” TRAI pointed out in its letters to the broadcasters.