TRAI issues consultation paper on review of NTO 3.0

The Telecom Regulatory Authority of India (TRAI) has issued a Consultation Paper on Review of Regulatory Framework for Broadcasting and Cable services.

The authority has sought comments from stakeholders on the paper to address the issues raised in the new tariff order (NTO 3.0) issued in November, 2022.

The comments are to be submitted by September 5 and counter submissions, if any, to be made by September 19, 2023.

In November last year, TRAI had come out with the third amendment in tariff order which had put a ceiling of Rs 19 per tv channel for inclusion in bouquet among other provisions. Issues have been raised on the order by distribution platform operators (DPOs) and local cable operators (LCOs). Some were addressed and some still remained.

“In order to address the remaining issues pertaining to Tariff, Interconnection and Quality of Service of Broadcasting and Cable services, as identified by the stakeholders' committee and suggested by other stakeholders, the Authority is issuing this consultation paper for seeking stakeholders' comments.

In the consultation paper, the regulatory body has asked stakeholders about various issues related to tariff, interconnection, quality of service and financial disincentives (disadvantages).

It has asked the stakeholders if the present ceiling of Rs 130 on NCF (network capacity fee) be reviewed and revised and reasons for it.

“Since Ministry of Information and Broadcasting (MIB) generally gives permission to a channel in multiple languages, how the placement of such channels may be regulated so that interests of all stakeholders are protected?

“Should the revenue share between an MSO (including HITS Operator) and LCO as prescribed in Standard Interconnect Agreement be considered for a review?” asked TRAI in its consultation paper.

It also asked if the channels available on DD Free Dish platform be mandatorily made available as Free to Air Channels for all the platforms including all the DPOs.

In consonance with the complete digitization of the cable TV sector, TRAI had in March 2017 notified the Regulatory Framework for Broadcasting and Cable services. It came into effect from December 2018.

Upon implementation of the New Regulatory Framework 2017, TRAI noticed some inadequacies impacting the consumers. As the New Regulatory Framework changed quite a few business rules, many positives emerged. To address certain issues that arose after implementation of new regulatory framework, after a due consultation process with stakeholders, TRAI on 01.01.2020 notified the New Regulatory Framework 2020.

Several stakeholders raised issues but the validity of the framework was upheld by the various high courts where it was challenged.

The provisions related to Network Capacity Fee (NCF), multi-TV homes and long-term subscriptions of the amended framework 2020, were implemented.

However, after new tariffs were announced by the broadcasters, TRAI received representations from DPOs, Associations of LCOs and consumer organizations.

Stakeholders highlighted difficulties likely to be faced by them in implementing new rates in their IT systems and migrating the consumers in bulk to the new tariff regime through the informed exercise of options, impacting almost all bouquets, due to upward revision in the rates of pay channels and bouquets declared by broadcasters.

To deliberate on the various issues related to implementation of the amended framework 2020 and suggest a way forward, a committee consisting of members from Indian Broadcasting & Digital Foundation (IBDF), All India Digital Cable Federation (AIDCF) & DTH Association was constituted under the aegis of TRAI.

After due consultation process, TRAI, on 22nd November 2022, notified the Telecommunication (Broadcasting and Cable) Services (Eighth) (Addressable Systems) Tariff (Third Amendment) Order, 2022 or NTO 3.0 and the Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) (Fourth Amendment) Regulations, 2022 which covered issues like continuance of forbearance on MRP of TV channels; ceiling of Rs 19 on MRP  of a TV Channel price for inclusion in bouquet; discount of 45% on sum of the price of individual channels while forming Bouquet and; additional incentives of 15% by broadcaster to be permitted on Bouquets also.

“The Stakeholders' Committee also listed several other issues for subsequent consideration by TRAI. In addition, the Authority held multiple meetings with representatives of broadcasters, MSOs, DTH operators and LCOs. Several issues were put forward during these meetings. TRAI has considered some relevant suggestions given by various stakeholders,” TRAI said.

Some of the Issues for Consultation:

Q1. Should the present ceiling of Rs.130/- on NCF be reviewed and revised?

1. If yes, please provide justification for the review and revision.
2. If yes, please also suggest the methodology and provide details of calculation to arrive at such revised ceiling price.
3. If not, provide reasons with justification as to why NCF should not be revised.
4. Should TRAI consider and remove the NCF capping?

Q2. Should TRAI follow any indices (like CPI/WPI/GDP Deflator) for revision of NCF on a periodic basis to arrive at the revised ceiling? If yes, what should be the periodicity and index? Please provide your comments with detailed justification.

Q3. Whether DPOs should be allowed to have variable NCF for different bouquets/plans for and within a state/ City/ Town/ Village? If yes, should there be some defined parameters for such variable NCF? Please provide detailed reasons/ justification. Will there be any adverse impact on any stakeholder, if variable NCF is considered?

Q4. Should TRAI revise the current provision that NCF for 2nd TV connection and onwards in multi-TV homes should not be more than 40% of declared NCF per additional TV?

1. If yes, provide suggestions on quantitative rationale to be followed to arrive at an optimal discount rate.
2. If no, why? Please provide justification for not reconsidering the discount.
3. Should TRAI consider removing the NCF capping for multi TV homes? Please provide justification?

Q5. In the case of multi-TV homes, should the pay television channels for each additional TV connection be also made available at a discounted price?

1. If yes, please suggest the quantum of discount on MRP of television channel/ Bouquet for 2nd and subsequent television connection in a multi-TV home. Does multi-TV home or single TV home make a difference to the broadcaster? What mechanism should be available to pay-channel broadcasters to verify the number of subscribers reported for multi-TV homes?
2. If not, the reasons thereof?

Q6. Is there a need to review the ceiling on discount on sum of MRP of a-la-carte channels in a bouquet (as prescribed through the second proviso to clause 4 (4) of the Tariff Order 2017) while fixing the MRP of that bouquet by DPOs?

1. If yes, what should be the ceiling on such discount? Justify with reasons.
2. If not, why? Please provide justification for not reviewing the ceiling

Q7. Whether the total channel carrying capacity of a DPO be defined in terms of bandwidth (in MBPS) assigned to specific channel(s). If yes, what should be the quantum of bandwidth assigned to SD and HD channels. Please provide your comments with proper justification and examples.

Q8. Whether the extant prescribed HD/SD ratio which treats 1HD channel equivalent to 2SD channels for the purpose of counting number of channels in NCF should also be reviewed?

1. If yes, should there be a ratio/quantum? Or alternatively should each channel be considered as one channel irrespective of its type (HD or SD or any other type like 4K channel)? Justify with reasons.
2. If no, please justify your response.

Q9. What measures should be taken to ensure similar reception quality to subscribers for similar genre of channels? Please suggest the parameter(s) that should be monitored/ checked to ensure that no television channel is discriminated against by a DPO. Please provide a detailed response with technical details and justification.

Q10. Should there be a provision to mandatorily provide the Free to Air News / Non-News / Newly Launched channels available on the platform of a DPO to all the subscribers?

1. If yes, please provide your justification for the same with detailed terms and conditions.
2. If not, please substantiate your response with detailed reasoning.

Q11. Should Tariff Order 2017, Interconnection Regulations 2017 and Quality of Service Regulations 2017 be made applicable to non-addressable distribution platforms such as DD Free Dish also?

Q12. Should the channels available on DD Free Dish platform be mandatorily made available as Free to Air Channels for all the platforms including all the DPOs?

Q13. Whether there is a need to consider upgradation of DD Free Dish as an addressable platform? If yes, what technology/ mechanism is suggested for making all the STBs addressable? What would be the cost implications for existing and new consumers? Elaborate the suggested migration methodology with suggested time-period for proposed plan. Please provide your response, with justification.