Channel Tariffs: TRAI ‘clarification’ creates massive confusion

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A clarification by broadcast regulator TRAI intended to stop cable and DTH operators from forcing ‘junk channels’ on customers has created massive confusion, with media outlets failing to understand what the regulator was trying to say, and in turn confusing their readers.

TRAI had, on January 10, clarified that there was no rule that the ‘basic pack’ of 100 channels under the new scheme can contain only free-to-air channels. Instead, it pointed out, the base tier can also contain pay channels.

This clarification was in response to consumer complaints that major DTH operators were refusing to include pay channels in the ‘basic pack’ of 100 channels.

TRAI pointed out that under the new tariff rules, the customer can choose any channel — pay or free — as a part of his basic tier of 100 channels.

Under the new rules, DTH operators cannot force their users to buy any specific channel or pack, it pointed out.

Despite this being case, in practice, some DTH operators are forcing consumers to buy fixed packs in the name of implementing the new tariff scheme.

When consumers demand that they should be allowed to choose which channels to include in their basic pack, they are being told that have to buy them separately on top of the 100-channel pack, and pay extra.

They are also being told that their basic pack of 100 channels cannot be changed or modified in any way.

This is because DTH and cable operators are not keen to allow consumers to touch their basic packs, as these platforms often get money from channels for being included in their base packs. If base packs can be amended or modified, and channels can be dropped at will, no channel will pay money to be included in basic packs.

Unfortunately for DTH and cable players, TRAI’s new tariff order is intended to counter exactly such tactics, to stop the selling of unwanted channels by platforms. TRAI’s new regulations aim to increase consumer choice.

Hence, TRAI was forced to come out with a clarification on January 10 that it was up to individual users to choose any channel — free or pay or bouquet — in their basic tier of 100.

CONFUSION

However, the clarification was misread by journalists, who reported it as ‘TRAI offering 100 pay channels for Rs 153 per month’.

What TRAI had in fact meant was that consumers can indeed include pay channels in the basic tier, provided they are willing to pay content charges in addition to the basic network charge of Rs 153 per month.

However, this part was not spelled out by the TRAI in its press release on January 10, as the statement was meant as a response to widespread consumer complaints that DTH and cable companies were refusing to accept pay channels in the basic tier, even when consumers were ready to pay content charges.

The led to dozens of media reports claiming that TRAI had amended its rules and now, any consumer can buy any 100 pay channels for just Rs 153 per month.

Not surprisingly, such reports — including one in a leading national daily — set off alarm bells among cable and DTH providers, who were getting calls from their customers asking for ‘100 pay channels in Rs 153’ pack.

HOW TRAI TARIFF SCHEME REALLY WORKS

The biggest confusion is because of the new concept of dual charging.

So far, consumers had always paid a single charge — including for network and equipment, as well as content.

However, under the new scheme, the charges are identified separately.

Consumers have to pay network charges separately and content charges separately.

However, for free channels, content charges are always equal to zero. This means that if a subscriber has chosen only 100 free-to-air channels, then he or she has to only pay network charges of Rs 153.

But if he or she replaces some of the free channels with pay channels, then he or she has to pay content charges also, even though network charge will continue to be Rs 153 only.

This can be made clear using three scenarios:

In scenario one, suppose a customer wants to watch only the 100 free channels that the DTH or cable operator is giving in the basic tier.

In such a case, he or she pays only the network charge of Rs 153, and zero content charges.

In scenario two, suppose the customer is unhappy with some of the free channels included in the basic pack given to him by the operator, and decides to replace these free channels with other free channels.

In this case too, he has to pay only the network charge of Rs 154, and no content charges. This is because he has replaced the DTH providers’ free channels with other free channels. Since all the channels in his package continue to be free channels, his content charges are free, and only the network charge of Rs 154 needs to be paid.

In the third scenario, assume that the consumer is interested in keeping only 40 of the 100 free channels provided by the DTH operator, and removes the remaining 60 free channels.

Now, the consumer has 60 free slots, which can be filled with new channels of his choosing. These 60 slots can be filled with other free channels, or pay channels, or channel packs, or a mix of all three.

In such a case, the consumer still has to pay only Rs 154 per month as network charges. But in addition, he also has to pay content charges related to the pay channels and pay channel packs.

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