NTO 3.0: Row escalates between broadcasters & cable operators over distribution agreement

On Saturday, February 18, big broadcasters like Disney Star, Sony and Zee cut off their transmissions to cable operators after All India Digital Cable Federation (AIDCF) members dismissed the former’s notice sent on February 15, requesting that they sign a new RIO.

Since then, the conflict between the two parties has escalated and each has accused the other of being unfair to the customers and spreading false information.

On February 19, Indian Broadcasting & Digital Foundation (IBDF) released a press note stating  AIDCF  has made some inaccurate remarks regarding the new price regime, which came into force on February 1, 2023. 

It said that the Telecom Regulatory Authority of India (TRAI) notified the amended Regulations and Tariff Order on November 22, 2022. The AIDCF and its members were in the know of the timelines prescribed by TRAI and they understood that the TV channels could only be provisioned under a signed interconnect agreement.

"As of today, all the broadcasters, all DTH providers and most of the cable operators, including some AIDCF members, have implemented the amended regulatory framework. Consequently, more than 90% of the DPOs have signed the revised interconnect agreement issued by the broadcasters, thereby choosing to comply with the law and ensuring that the service is not disrupted for majority of the subscribers," read the IBDF statement.

On February 18, AIDCF criticised the "dictatorial" and "high-handed" attitudes of the big broadcasters who disconnected channel signals to the members of the federation. The move was taken in response to AIDCF members who didn't comply with the price hike by the broadcasters.

The broadcasters had notified cable operators, asking them to sign the Reference Interconnect Offer (RIO) for New Tariff Order (NTO) 3.0. The notice has been sent to AIDCF members who have decided not to raise channel pricing while the Kerala High Court is hearing a case related to the implementation of NTO 3.0.

IBDF said that under the new pricing regime, the subscriber has the flexibility of choice on whether to pick one channel or a bouquet of channels. The maximum monthly subscription fee for a channel to be included in bouquet is Rs 19/- which is significantly lesser than the price of essentials in the country.

"The attempt of the AIDCF to invoke consumer sentiment on the price increase is belied by their attempt to increase that portion of the consumer bill that goes only to the AIDCF members, i.e. Network Capacity Fees (NCF)," said IBDF.

IBDF also accused the AIDCF of being not only in defiance of the law but also holding less than 25 million subscribers hostage, “solely for its own commercial reasons and circulating misleading information.” 

Further intensifying its attack against the cable operators’ association, IBDF also said that AIDCF’s press release “attempts to influence the public with respect to the matter pending consideration before the court.” 

“These DPOS are minority in number compared to the ones who have already signed and due to their non-compliance, are depriving consumers of their favourite channels. In this scenario, Indian Broadcasting and Digital Foundation (IBDF) would like to urge the impacted viewers to reach out to other operators to subscribe to their favourite channels,” said IBDF.  

In response to the IBDF statement, AIDCF issued clarifications on certain issues raised by broadcasters.  

AIDCF in its statement said the new Regulatory Framework (NTO 1.0) announced by TRAI in 2017 promised consumer choice and lower prices for channels on cable tv and DTH platforms. It said that the broadcasters announced MRP for the consumers for the first time ever which were raised by as much as 400% in some cases. Most of the popular channels were announced at an MRP of Rs.19/.   

AIDCF stated that the broadcasters also announced bundles of channels which had both popular and unpopular channels in the same bundles (bouquets). " However, the broadcasters effectively killed consumer choice by pricing these bouquets at heavily discounted prices as compared to the a-la-carte prices." 

It further reads: "Consumers as well as the cable tv and DTH platforms had effectively no choice but to subscribe to the bouquets."  

On the cost of NTO 3 and its impact AIDCF said that broadcasters have significantly increased their channel prices and bouquet prices by approximately 18% - 35% which will definitely affect the consumer price.  

"Broadcasters in meanwhile, despite the matter being sub judice, sent legal notices to AIDCF members to sign the agreement within 48 hrs. of issuance of notice or to face disconnection of signal immediately.  

“Disney-Star, Sony and Zee switched off their channels on 18th February morning. Only three broadcasters have taken action. Other broadcasters who have not affected switch-off include Colors, Times, Discovery, Sun TV, ETV, etc. Now, broadcasters are urging consumers to go through the inconvenience of changing their service provider for their own limited benefit,” read AIDFC’s recent statement.