Linear channels on OTT: The latest flashpoint between TRAI & broadcasters

After New Tariff Order (NTO) 2.0, the Telecom Regulatory Authority of India's (TRAI) decision to ask broadcasters to provide details of how linear content is being delivered to over the top (OTT) platforms has become the latest flashpoint between the two sides.

The regulator has contended that the broadcasters are in violation of clause 5.6 of downlinking guidelines which states that companies can only provide signal reception decoders to cable, DTH, or IPTV platforms. However, the broadcasters insist that they are not using the infrastructure which is regulated to offer linear content to OTT and third-party aggregator apps.

According to sources close to the development, the TRAI has started collecting information about the likely impact of the availability of linear content on OTT on the distribution platform operators (DPOs). The direct-to-home (DTH), as well as multi-system operators (MSO), have complained to the TRAI that the availability of TV content on OTT has dented the pay-TV subscriber base.

"DPOs have been complaining that OTT is impacting their business. However, they have not provided any data to back their claim. As a sector regulator, TRAI has started analysing the impact of OTT on traditional DPO platforms," an industry source close to the development said.

TRAI Chairman PD Vaghela recently said that the regulator might review the regulations to ensure a level playing field between TV broadcasting and OTT. "Coming to digital media, it owes its growth to technological innovations. 5G will further enhance the same. For me, the level playing field remains important. We would want the TV industry to compete with the digital media by reviewing the regulation to enable a level playing field,” Vaghela had said during his address at the 10th edition of the CII Big Picture Summit.

The TV distribution platforms have been vocal about the fact that while they are bound by rules and regulations, the OTT platforms are virtually unregulated. The DPOs have also complained that they have to comply with TRAI tariff orders, interconnection regulations, and quality of service (QoS) norms whereas OTT platforms are free to operate without price controls.

The biggest grouse that DPOs have about OTT platforms is that the same channel/content which is available on a pay basis on traditional platforms is being offered either free of cost or at a nominal annual subscription fee on these platforms.

"TV customers have to pay Rs 300-400 to get popular GEC, movie, and sports channels whereas the same channel or content is available at Rs 500 annually on OTT platforms. In many cases, the TV content is also available free of cost on broadcaster-owned OTT platforms. If the same content is available at such an affordable price on OTT then what is the incentive for consumers to pay Rs 300-400 per month to us?" said a senior legal and regulatory officer with a DPO.

A senior official who is part of the regulatory team of a leading TV network said that the TRAI's move is the result of a division in the broadcasting sector. "Rather than seeking deregulation on the linear side, the DPOs want OTTs to be regulated. Regulation will not help any stakeholder. Rather than complaining about the drop in pay-TV base, the DPOs should introspect as to why consumers are shifting. What stops them from offering hybrid STBs which offer both linear channels and OTT content. Tata Sky and Dish TV are offering hybrid STBs and live TV apps while some MSOs like DEN have also launched mobile TV apps," he noted. 

In a letter dated 25th November, the TRAI had asked broadcasters like Star India, ZEEL, Sony Pictures Networks India (SPNI), Viacom18, and Sun TV Network to provide a detailed architecture indicating which media is being used to deliver linear content to their own as well as third-party platforms. 

This information had to be furnished by 9th December, failing which the TRAI had threatened to take action against the broadcasters. None of the broadcasters have provided the information to the TRAI as they believe that the regulator doesn't have any jurisdiction to seek this information.

Broadcasters Sony and Sun TV Network have challenged the TRAI's order before the Telecom Disputes Settlement and Appellate Authority (TDSAT). Both the matters are listed for hearing today.

In its letter to the broadcasters, the regulator had noted that the linear channels operated by them are available on their in-house apps as well as aggregator apps like Airtel XStream, Jio TV, and Vodafone Play. This, the regulator contended, violates Clause 5.6 of Policy Guidelines for Downlinking of Television Channels dated 5th December 2011.

Clause 5.6 states that "the applicant company shall provide satellite TV channel signal reception decoders only to MSOs/Cable operators registered under the Cable Television Networks (Regulation) Act 1995 or to a DTH operator registered under the DTH guidelines issued by Government of India or to an Internet Protocol Television (IPTV) Service provider duly permitted under their existing telecom licence or authorized by Department of Telecom to provide such service”.

A senior lawyer who is involved in the matter said that the TRAI had sent notices to all the broadcasters seeking details about how linear channels are made available on OTT platforms. However, none of the broadcasters have responded even as a few of them have challenged the letters sent by the TRAI.

"The broadcasters have filed their replies to TRAI saying that the regulator has no business to ask us these questions because we are not using any other infrastructure which is part of regulatory regimes. The broadcasters have not provided the information as TRAI has overstepped its jurisdiction in seeking this kind of information," he stated.

The lawyer also said that the information being sought by the TRAI should be limited to a certain set of circumstances and without any prejudice to the rights of the broadcasters. "We feel that this information should be disclosed through a court order and not by asking," he added.

The senior legal and regulatory official quoted above said that the TRAI has the powers to suo moto seek information that has an impact on the broadcasting sector. "Why are broadcasters so worried about sharing the architecture if they are not using regulated delivery mechanisms to deliver linear content on OTT," he stated.

Sony and Sun have contended that the actions taken by the TRAI for licensing content on the OTT platform and/or any third party OTT platforms are outside the purview of the Act and the Interconnection Regulations. They also added that the OTT Platforms, which are also involved in the query sought by the TRAI, are not covered under the Act.

"Furthermore, for the purposes of the activity that is under consideration, i.e., licensing/provision of signals/content of broadcasters to an OTT platform, the broadcaster also does not qualify as a service provider, as defined under the Act, on account of the scope of activity being beyond the activities that are regulated under the Act," the petition states.