NEW DELHI: Indian broadcast regulator came out today with its third set of draft guidelines within five days --- this time on interconnection issues. With an aim to bring about more uniformity and transparency in the broadcast carriage sector, TRAI attempts to tackle spiralling carriage cost, rampant discount schemes and uneven agreements between stakeholders, while creating room for distribution cost reimbursement.

As often reiterated by the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), TRAI said no broadcaster will provide signals of pay television channels to a distributor of television channels without entering into a written interconnection agreement with such a distributor of television channels.

In the draft regulations, called the Telecommunication (Broadcasting and Cable Services) Interconnection (Addressable Systems) Regulations, 2016, published by TRAI today, the regulator said all broadcasters and distributors (DPOs) will publish on their websites a draft reference interconnection offer (RIO) for providing signals of all its pay television channels to a distributor of television channels within 30 days of commencement of these regulations or before launching of a pay television channel, in conformance with the provisions of the regulations and tariff orders notified by it.

It also said that every broadcaster shall offer all television channels on a-la-carte basis to distributor of television channels. But it will be open to a broadcaster to offer its pay channels (in addition to offering of channels on a-la-carte basis) in form of bouquets.

The draft inter-connect guidelines have been prepared after keeping in view the various orders and litigations pending in TDSAT or courts arising out of disputes between broadcasters and distributors or local cable broadcasters.

Stakeholders have been asked to respond to the draft by 28 October 2016, with the year-end deadline for the final switch-off of analogue signals under the Digital Addressable Systems (DAS) less than three months away.   

Interestingly, TRAI also dwells on carriage & placement fee --- something that broadcasters have been saying is a growing menace hitting their bottomline --- and discounts indicating how the issue can be tackled. 

No carriage fee is to be paid by a broadcaster if the subscription of the channel is more than or equal to 20 per cent of the subscriber base. The rate of carriage fee has been capped at 20 paisa per channel per subscriber per month and the fee amount (charged by DPOs from TV channels) will decrease with increase in subscription numbers.

In what could lead to some serious work in arithmetic, TRAI has suggested the distributors of TV channels may offer discounts on the carriage fee rate declared by them not exceeding 35 per cent of the rate of the carriage fee declared. Further, broadcaster can offer to a distributor a minimum of 20 per cent of the maximum retail price (MRP) of its pay channels or bouquets of pay channels as distribution fee. TV channels may also offer discounts on the MRP, provided that the sum of discounts and distribution fee in no case shall exceed 35 per cent of the declared MRP.

The carriage fee payable by a broadcaster to the distributor under the interconnection agreement shall be calculated on the basis of the rate of carriage fee and the discounts offered in the reference interconnection offer. The term of the interconnection agreement will in no case be less than one year from the date of commencement of the agreement.

The Authority suo-motu or otherwise may examine the reference interconnection offer submitted by a distributor of television channels and may modify the reference interconnection offer with the distributor amending the RIO accordingly and publish the same within fifteen days of receipt of the direction, if the Authority is of the opinion that the RIO has not been prepared in conformance with the provisions of the regulations and the tariff orders notified by the Authority.

Pointing out that the new draft has attempted to keep the basic principles of non-exclusivity, non-discrimination, transparency, level playing field and fair competition in mind, TRAI said there should be a common interconnection framework for all addressable systems, DTH, HITS, DAS and IPTV.

The “Must carry” provision for all addressable systems on first come first serve basis has been provided for and distributors have been asked to publish information about its platform, including available capacity and declare the rate of carriage fee.

It will be mandatory for service providers to reduce the terms and conditions of all their interconnection agreements to writing and no service provider will provide for any clause in an interconnection agreement with the other service provider which would require, directly or indirectly, the latter to pay a minimum guaranteed amount.

Furthermore, no broadcaster will provide signals of pay television channels to a distributor of television channels without entering into a written interconnection agreement with such distributor of television channels.

The regulator said no broadcaster will provide for any clause, directly or indirectly, in an interconnection agreement with a distributor of TV channels which require such distributor to include the channels or bouquets of pay TV channels in any particular bouquet of channels offered by such distributor to the subscribers.

A broadcaster may sign the interconnection agreement with distributors of TV channels for a-la-carte pay TV channels or bouquets of pay television channels of its subsidiary company or holding company or subsidiary company of the holding company which has obtained, in its name, the down-linking permission for its television channels from the Government, after written authorization by them.

Every broadcaster will enter into a new written interconnection agreement with distributors of TV channels before the expiry of the existing interconnection agreement and notice of this will be given to the distributor at least 60 days prior to the date of expiry.

The agreement between a broadcaster and a multi system operator (MSO) will include the details for describing the territory for the purpose of distribution of signals of television channels containing the registered area of operation of the MSO as mentioned in the registration granted by the Government. Provisions relating to territory covered or agreements between an MSO and LCO will not affect the direct-to-home platforms.

The full draft guidelines could be accessed at http://www.trai.gov.in/WriteReadData/WhatsNew/Documents/Interconnection_Regulation_14_10_2016.pdf

Also Read:   TRAI on carriage fee, other issues in draft interconnect guidelines