Even as the channel owners today took TRAI to the courts over changes to channel pricing rules, the regulator has issued a statement responding to their concerns.
Broadly, it said the latest changes were required to overcome ‘teething problems’ associated with such a radical shift to a choice-oriented television distribution regime, but also criticized some players in the market for trying to use non-transparent practices to deny choice to consumers.
It also rejected concerns expressed by some broadcasters that the changes to the tariff order amounted to micromanagement and setting end-prices.
“The amendments through NTO 2.0 have left the basic structure of the regulatory framework unchanged with very minor modifications targeted to address teething problems relating to smooth implementation. It provides complete freedom to Broadcasters/ DPOs to price their services while ensuring that consumers get freedom to choose the TV channels.
“The review exercise has been limited to certain consumer friendly measures including those which are necessary to balance the interest of stakeholders,” TRAI said in an apparent reference to concerns expressed by broadcasters at a press conference last week.
It, however, maintained that the tariff order, as implemented last year, was ‘misused’ by some players, read big broadcasters.
While the new tariff order was intended to benefit all three parties — distributors such as cable and DTH operators, broadcasters (channel owners), and consumers, the last category could not enjoy the benefits of the new regime, it said.
“NCF facilitates adequate returns to DPOs (distributors), thereby facilitating upgradation of their networks giving better services to consumers and ensuring business certainty. The Broadcasters also benefited by getting full freedom and flexibility to decide the price of their Television Channels. However, the intended benefit for consumers to enable the freedom of choice could not be achieved completely due to misuse of available flexibility by a group of service providers,” TRAI said.
The regulator responded to the criticism that it was making changes within one year of introducing the new system.
“These steps become necessary to curb misuse of pricing facility by few broadcasters. It is important to mention here that after implementation of NTO, some broadcasters enhanced their channel prices drastically, which in large number of cases were more than 100%.
“Such price increase is anti-consumer and forces regulatory interventions. TRAI believes that transparent mechanism needs to be adopted to encourage market discovery of channel price, but any attempt to scuttle consumer choice either through nontransparent pricing practices or other similar means need to be discouraged.”
Despite today’s legal challenges, TRAI expressed the hope that “consumers will be able to benefit as per the amended provisions with effect from 1st March 2020.”
“The amendments will usher in better offerings, reduced NCF, more flexible tariff schemes and more choices for consumers,” it added.