India: New Regulatory Framework For Broadcasting Sector

Last Updated: 26 April 2017
Article by Harsh Walia

Most Read Contributor in India, August 2019

The TRAI has, vide The Telecommunication Services (Broadcasting and Cable) (Eighth) (Addressable System) Tariff Order, 2017 dated 3 March 2017 and the subsequent amendment dated 30 March 2017 (Tariff Regulation), formulated a comprehensive framework for the broadcasting sector covering tariffs for Addressable TV distribution of TV broadcasting services across digital broadcasting delivery platforms (such as DTH, Cable TV, HITS, IPTV).

The Tariff Regulation has been challenged in the Madras High Court by Star TV and Vijay TV on the ground that fixing tariff for TV content is in violation of Copyright Act and is beyond the jurisdiction of TRAI. The hearing is in full swing, however the Tariff Regulation has not been stayed so far. Most of the provisions of the new Tariff Regulation will come into force after 180 days. Interestingly, the provision requiring broadcasters to declare maximum retail price (MRP) per month payable by a subscriber for each pay channel offered on a-la-carter basis is expected to come into effect from next month. Such MRP should be more than zero and uniform for all distribution platforms.

Background and Need for Change

In TV broadcasting services, there are three main stakeholders, namely, broadcasters, distributors of TV channels and viewers/subscribers. Broadcasters provide channels, distributors establish their network and subscribers pay price for viewing TV channels.

To enhance transparency, subscriber choice and quality of services digitalization was necessary. The amendment to the Cable Television Networks (Regulation) Act, 1995 (Cable TV Act) in 2011 marked the implementation of digital addressable cable TV system in India. The digitalization process was envisaged to be completed in four phases and is now complete. Although digitalization offered transparency and better view quality the issue of subscriber choice was not adequately addressed. The benefits of digitalization such as choice of selecting channels on a-la-carte basis and availability of multi - media services never reached the subscribers. Further, broadcasters have continued to bundle channels and push for channels to maximum number of subscribers, as they offer huge discounts on bouquets.

Since the main source of revenue for broadcasters are advertisements and subscription fees, the existing Tariff Orders have led to skewed revenues of broadcasters earned from advertisements resulting in lack of investment in niche and not so popular channels which in turn has led to a lack of choice for subscribers.

New Regulatory Framework

To facilitate choice for subscribers and to exercise their options in line with intention of lawmakers to choose individual channels, the new framework stipulates that broadcasters must declare to customer/subscribers the MRP of their a-la-carte channels and bouquets of pay channels. To ensure that prices of a-la-carte channels are kept reasonable, the maximum discount permissible for formation of a bouquet has been linked with sum of a-la-carte prices of the pay channels forming that bouquet. A broadcaster can offer maximum discount of 15% while offering its bouquet of channels over the sum of MRP of all pay channels in that bouquet to enable customer choice and prevent skewed a-la-carte and bouquet pricing. Full flexibility has been given to broadcasters to declare the price of their pay channels on a-la-carte basis. Such bouquets shall not contain any free to air channel. The bouquet will not contain any pay channel whose MRP per month is more than INR 19 and it will also not contain HD and SD variant of the same channel.

Similarly, the bouquet offered by a distributor to a subscriber will be without any alteration in the composition of a bouquet by the broadcaster and a maximum discount of 15% can be provided while offering a bouquet by the distributor at a retail level. As far as a-la-carte price of pay channel by distributor is concerned, in no case it shall exceed the MRP per month declared by the Broadcaster. Distributor can, also charge network capacity fee per month (with a cap of INR 130 up to initial 130 channels) from its subscribers for availing its distribution network capacity.

The net effect of fixing caps on discounts for bouquet by broadcaster and distributor will be a total maximum discount of approximately 30% on the bouquet of channels. Therefore, flexibility of formation of bouquet has been given to both broadcasters and distributors to such an extent that the total permissible discount does not kill a-la-carte choice.

Before this new framework was proposed, the retail tariff in addressable system for both free to air and pay channels was under forbearance i.e. the distributors of TV channels were free to decide their price as per market condition. Although some of this flexibility remains, it has been limited to some extent under the new framework.

Khaitan Comment

The overhaul of the tariff plan was the need of the hour considering the limitation that subscribers had in the choice of a-la-carte channels. It seems that TRAI has learnt from its experience and revised the tariff plan in such a manner that even if distributor of TV channels would like to indulge in predatory pricing it will only have limited flexibility in determining the price of channels. The new framework will change the dynamics of business between the three stakeholders and will resolve certain long pending issues and at the same time is expected to give rise to new controversies. Depending on the response from the market on the implementation of the new framework, the TRAI may review it in couple of years. We are keeping a watch on the proceedings in Madras High Court and will update this Ergo depending on the outcome.

The content of this document do not necessarily reflect the views/position of Khaitan & Co but remain solely those of the author(s). For any further queries or follow up please contact Khaitan & Co at legalalerts@khaitanco.com

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions