The Telecom Regulatory Authority of India said it is abandoning its voluntary restraint in the implementation of new TV channel pricing rules announced on January 1 as channel broadcasters are taking advantage of the same to push through price increases.
TRAI has so far not taken any action against those who did not implement its new pricing regulations from January as everyone expected the Bombay High Court to deliver its verdict on the matter latest by March.
Most channel groups (broadcasters) in India are not in compliance of the rules as things stand at present.
However, said TRAI, it can no longer stand and watch, given that broadcasters who failed to implement its price-cutting order are now trying to push for further price increases.
“TRAI being the sector regulator enjoined to protect the interests of consumers, had maintained patience in due reverence to the impending decision of the Hon’ble Court and had not pressed ahead for enforcement of the Tariff Amendment Order..
“..now such broadcasters, in utter disregard to the settled principles and extant regulations, are changing the service offerings in violation of Tariff Amendment Order 2020 by unilaterally increasing the prices of bouquets and are also simultaneously discontinuing the low priced bouquets disturbing the status quo thereby adversely affecting the interests of the consumers,” it said.
TRAI said its restraint seems to be causing “a regulatory vacuum” in the sector as cable and DTH operators refuse to sign up to new agreements that are in violation of the law.
“..now, few broadcasters are asking Distribution Platform Operators (DPOs) to accept new bouquets with revised prices and that recently one major broadcaster has discontinued its low priced bouquets so that consumers take new higher priced bouquet thereby increasing their monthly payout and that the said broadcaster has announced to discontinue its low priced bouquets with effect from 01.08.2020 for subscription,” TRAI said.
It pointed out that some broadcasters have even stopped informing the regulator when they are changing their packs and prices.
TRAI said it is getting multiple complaints from cable and DTH operators about broadcasters trying to force distribution agreements that are in clear violation of the existing rules in the country. “DPOs are not willing to enter into such non compliant agreements thereby creating a regulatory vacuum in the sector,” it said.
Cable and DTH operators have also complained to TRAI that channels are now offering different terms and conditions to different cable and DTH operators — something that was banned by TRAI’s tariff order of 2017.
“The Authority is in receipt of complaints from some DPOs [distribution platforms]..that litigations because of such issues have been filed before Hon’ble TDSAT.”
In this situation, said the regulator, further patience and inaction on its part will be unfair to those who have complied with the law, while giving an advantage to those who have not.
“..the restraint exercised by TRAI qua not taking coercive measure vis-a-vis the non-implementation of the impugned Tariff Amendment Order 2020 and Interconnection Regulations 2020 is unfair not only to consumers but also to those DTH operators and MSO etc. who have already complied with their part of the obligation..,” it said, adding that it is abandoning its voluntary restraint because of the following pressing reasons:
“(i) the revised prices announced by some broadcasters are to take effect from 01.08.2020; (ii) the Authority is legally bound to protect the consumers’ interest and cannot abdicate its responsibility; (iii) there is every possibility that other broadcasters may also start similar malpractices thereby nullifying the very legal framework laid down for regulation of broadcasting sector by TRAI resulting in total chaos and uncertainty in the minds of consumers; and (iv) any further delay in implementation of the Tariff Amendment Order 2020 and Interconnection Amendment Regulations 2020 would adversely affect the interest of consumers resulting into irreparable loss to the consumers.”
It passed the following order for compliance:
“The Authority, in exercise of its power under section 13 directs all the broadcasters to report to the Authority by 10.08.2020, name, nature, language, maximum retail prices per month of channels and maximum retail price per month of bouquets of channels, or composition of bouquets and also amend Reference Interconnected Offer (RIO) in compliance with the provisions of the Telecommunication (Broadcasting and Cable) Services (Eighth) (Addressable Systems) Tariff (Second Amendment) Order, 2020 and the Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) (Second Amendment) Regulations, 2020 dated 1st January 2020 and shall simultaneously publish such information on their websites.”
The TRAI Tariff Order rules of 2020 are the second revision of the original tariff order issued in 2017.
The first round of changes took place when Madras High Court struck down a key rule inserted by TRAI designed to bring down channel prices. The rule was aimed at ensuring that consumers would get their popular channels in the range of Rs 7-12 each.
Because of this change introduced by Madras High Court, the prices of most of the popular channels ended up at Rs 22.40 — making them practically unaffordable for most consumers.
This led to massive complaints from consumers when the rules were finally implemented in early 2019.
In response to the complaints, TRAI came out with some changes on January 1, trying to bring down the prices of popular channels to at least Rs 14.16.
These new rules — called the amended regulations — were again challenged by the channels in various high courts, including Bombay High Court. These broadcasters asked for an immediate stay on the new rules, but failed to get one.
At the same time, Bombay High Court heard the matter expeditiously, wrapping up the hearing in a matter of a few weeks despite the reconstitution of the bench mid-way. The hearing was completed on March 4.
Given the expectation that the court would make its verdict known soon, TRAI too decided to wait, before taking punitive actions against those who refused to implement the rules.
“..even though no ad-interim/interim orders were passed by the Hon’ble Court restraining TRAI from implementation of the amended Regulations 2020 and Tariff Amendment Order 2020, TRAI did not take any coercive steps or measures to implement the said Regulations and Tariff Order, as the matter was heard at length for interim relief by the Hon’ble Court and the orders thereon were expected to be pronounced very shortly.”
TRAI said it expected broadcasters to slowly move towards full compliance of the rules, but what happened was totally different.
“..the Authority noted that despite being under legal obligation to implement the new regulatory regime notified on 01.01.2020, some broadcasters have failed not only to implement the provisions of the regulations and the tariff orders notified by the Authority on 01.01.2020 but have also started violating the provisions of Principal Tariff Order 2017, particularly the clause related to reporting requirement and are also disturbing the status quo by modifying the composition as well as discontinuation of their existing bouquets, in a manner that is beneficial to them but adversely affects interest of the consumers.”
It gave the example of one broadcaster “who had filed a Reference Interconnect Offer (RIO) containing revised prices of channels and bouquets in Jan 2020, filed, on 08.06.2020, another revision of the RIO, not in compliance with Tariff Amendment Order 2020, merely replacing one channel of 25 paisa with another channel of the same price and also increased the price of their most popular bouquet from Rs 25/- to Rs 28/ in an attempt to change the status quo which had continued so far,” it said.
“..there is complete ad-hocism prevailing in the industry wherein all interconnection and other agreements are getting renewed for one/two months thereby creating uncertainty in the sector and causing serious concern regarding timely completion of agreements and provision of signal/revenue share etc. for the healthy and orderly growth of the sector,” it noted.
While cable and DTH operators have tried to implement the 2020 rules — such as increasing the number of rules in the base pack from 100 to over 200 — they too have not been able to fully implement the new rules.
“..such DTH operators and MSOs also represented to TRAI that they are not able to implement remaining part of the Amendment Tariff Order 2020 due to absolute non performance of the obligations by some broadcasters,” TRAI said.