NTO 2.0: MSOs, DTH operators submit their wish list to TRAI

The All India Digital Cable Federation (AIDCF) and the DTH Association have sent their wish list to the Telecom Regulatory Authority of India (TRAI) on the implementation of the New Tariff Order (NTO) 2.0. AIDCF is the apex body of multi-system operators (MSOs) while the DTH Association represents the four pay DTH operators.

The TRAI had held a meeting on December 23, 2021 with stakeholders, including MSOs and DTH service providers, on issues concerning the NTO 2.0 implementation. During the meeting, the regulator had asked stakeholders to send the list of issues that concerns them with respect to NTO 2.0.

The TRAI and stakeholders had concurred that the bottlenecks surrounding NTO 2.0 can be resolved in two phases. The two bodies have said that the NTO 2.0 can be implemented in first phase with certain modifications to the amended tariff order. The second phase involves a detailed consultation process which takes care of all the key issues concerning the distribution platform operators (DPOs).

In a letter dated January 18, 2022, the AIDCF had stated that Phase 1 of the NTO 2.0 must be implemented from January 1, 2022 to April 1, 2022 wherein the broadcasters should ensure that their current bouquet continues to be made available at the same price so that the MSOs are not required to seek the choice from the subscribers and no inconvenience is caused to the subscribers.

Secondly, the federation demanded that the 15% incentive on the bouquet should be restored without any new condition. Thirdly, the pricing of the channels should be capped to Rs 12 and there should be no growth in channel prices.

As per the AIDCF, Phase 2 of the NTO 2.0 should be implemented from April 1, 2022 to 30th June 2022 with the TRAI coming out with a consultation paper to remove anomalies in the existing regulation. The federation has listed several issues that it wants the TRAI to consider in the consultation paper.

The AIDCF also demanded that it will implement Phase 1 provided there is written assurance from the TRAI on the implementation of Phase 2. "The authority would acknowledge that for the cable industry to survive Phase 1 and Phase 2 should go hand in hand. Accordingly, our concurrence to phase I as proposed above would purely depend upon the written concurrence by the authority for the implementation of Phase II," the AIDCF stated.

The federation has demanded a genre-wise capping on MRP of pay channels including a maximum cap of Rs 12/- for any pay channel. It also wants a cap on CPS rates for the DPO and only inflationary correction should be permitted on annual basis.

Further, the AIDCF demanded that the TRAI should permit the packaging of all pay channels in single bouquets irrespective of à la carte rates. The mandate to carry the broadcaster bouquet without any modification should be removed and DPOs should have the freedom to choose channels from broadcasters' bouquet which was prevalent before NTO.

The MSO body also said that the inclusion of channels in the bouquet formed by DPO should be based on DRP and not MRP. It also urged the TRAI to combine the 15% incentive with the distribution fee and make it 35% of the MRP to be given to DPOs.

The AIDCF has requested the TRAI to remove the cap on Network Capacity Fee (NCF) to be removed and each year NCF to be increased with the rate of Inflation. Capping on NCF to be removed and the previous clause wherein for every 25 additional channels, Rs 20 to be increased shall be implemented. The 60% discount on NCF should also apply to broadcasters for pay channel prices for Multi TV connections.

The federation also noted that pay channels should not be available on DD Free Dish. Further, linear channels must be offered to OTT subscribers at the same price by broadcasters as it is being offered to DPOs.

Among other issues, the AIDCF has demanded that Any DPO involved in Piracy should be not be provided with content in the future. The carriage fee cap at Rs 4 lakh should be removed while the disconnection threshold in NTO 2.0 must be removed.
 
In a letter dated 27th December 2021, the DTH Association, which is a collective body comprising representatives of Airtel, Dish TV (for dish and d2h brands), Sun Direct, and Tata Sky, has stated that the issues can be resolved in two stages with the first stage requiring an implementation with immediate effect January 2022.

As part of its NTO 2.0 implementation in the first stage, the DTH Association noted that the price cap on à la carte channels for inclusion in bouquets must be increased from Rs 12 to Rs 19 as at present. It added that this will provide for ease of channel selection and avoidance of multiple recharges by subscribers, and reduce the load on billing systems. The DTH operators also want the TRAI to permit a 15% incentive on bouquets as prevailing.

In the second stage, the DTH Association demanded that the consultation process must be initiated by April 2022 which will be concluded within three months and implemented by the end of 2022. The DTH operators want the TRAI to observe pricing forbearance. The DTH operators want the flexibility to design and bundle products.

Apart from that, the DTH operators want TRAI to incorporate an automatic, inflation-linked increment clause for NCF in the Regulations, moving towards forbearance. The DTH operators also want parity of pricing of Pay TV channels on DD Free Dish, OTT, and DTH. "In addition, we also agreed that the timelines will follow the 30:30:60 days implementation schedule, with the first leg being kicked off after all broadcasters have filed in their tariffs," the DTH Association said.