Regulatory framework for platform services

The Telecom Regulatory Authority of India (TRAI) recently issued recommendations on the consultation paper on Regulatory Framework for Platform Services (PS). MIB has proposed to adopt the certain recommendations on issues, in respect of PS offered by MSOs also by appropriately replacing the word DTH with MSO and requested TRAI to furnish its views on the proposal.

In one of the references, the MIB informed TRAI that after consideration of the recommendation by Inter-Ministerial Committee (IMC), the recommendations have been accepted, except recommendation No. 8. The ministry also informed TRAI that certain recommendations have been approved with modification and requested the regulator to furnish its recommendations on the suggested modifications.

In the second reference, the MIB informed TRAI that they are examining the TRAI’s recommendations on Regulatory Framework for Platform Services for their implementation in respect of MSOs LCOs. The TRAI recommendations, views of MIB thereof and the proposed view of the authority are:

Incorporation of DPOs as a company under the Company Act
TRAI recommendation. Any person/entity desirous of providing PS, or is already providing such services, must be incorporated as a company under the Indian companies Act, 2013 and the rules framed thereunder.

MIB view. This recommendation was not accepted by IMC in respect of MSOs/LCOs, since most of these operated in small areas are either proprietorship or partnership firms which are not registered as companies. Making it obligatory for MSOs/LCOs to convert into companies may not be in line with the promotion of ease of doing business. IMC decided that anybody registered as a DPO, either with MIB or with post office, shall be eligible to carry PS channels.

TRAI response. The permission to operate private satellite TV channel is granted only to companies registered in India under the Companies Act. However, a DPO may or may-not be a company. Respective guidelines for registration for DTH/HITS/IPTV/MSO prescribe the status of ownership. As such a DTH or a HITS service provider needs to be registered as a company to be eligible for registration with MIB. However, an IPTV service provider or an MSO need not be a company to get a registration with MIB.

Guidelines for both the IPTV operators and MSO prescribe individuals/firms as eligible for registration. The observations made in TRAI recommendations in November 2014 as regards registration of PS make a note that almost all DPOs provide PS channels. One way to ensure uniformity in the legal status of all the DPOs, is that the DPO offering PS must be a company registered in India under the Companies Act. Further, company registration procedure has been simplified by setting up an online system for the registration. Therefore, with a view to ensure better transparency and oversight, it was prescribed that all DPOs desirous to offer platform services should register as a company under the act. Almost, every MSO provides platform channels. DAS implementation ensures that the PS can only be inserted at the head-end by MSO.

Given that a very large number of platform channels are possible, the issue of oversight on information spread through such channels is important. The recommendations as regards mandatory registration as company were made with the purpose of transparency and regular compliances. Platform channels can quickly and widely spread information/misinformation. In case MIB considers that there is no necessity to register as company for MSOs desirous to register their PS, it should satisfy itself regarding the transparency of ownership and assurance of content of such PS at the time of registration. MIB may ensure that registration of PS channel may be made in such a way that the individuals provide full disclosure. In view of above TRAI has no objection to accept ministry’s view provided that MIB is able to specify compliance structure to ensure that those providing PS make full disclosure on ownership status and comply to content code and advertisement code.

Number of PS channels to be made available
TRAI recommendation. A maximum number of five PS channels may be offered by the cable operators in non-DAS areas. In DAS areas and for all other platforms, a maximum of 15 PS channels may be offered by the DPOs. These numbers are the number of PS channels to be made available at the subscribers’ end.

MIB view. With the completion of digitization process, there is no distinction between DAS and non-DAS area. Further, while it is necessary to restrict capacity of PS channels carried by DPOs as recommended by TRAI, it is not in the interest of the evolving and dynamic market like cable TV to restrict the number of PS channels. Regulation may only intervene to the point of upholding customer interests, ethical business practices, ease of doing business, and safeguard against violation of programming code and advertisement code. Taking note of this, it is recommended that the MSOs may be permitted to operate to a maximum of 5 percent, and LCOs to a maximum of 1 percent, of the total permitted satellite channel being carried by them as permitted PS channels without any upper limit.

TRAI response. It is reiterated that the authority had forwarded its recommendations in 2014 when digitization process was not complete. As the process of digitization has since been completed in March 2017, the recommendations as regards those for DAS remain relevant.

The domain and functioning of the DPOs is different from that of the broadcasters. The main purpose of granting permission/registration/license to DPOs is distribution of TV channels covered under uplinking/downlinking guidelines. Thus, it is essential that the major portion of the distribution capacity of these platforms is used for the intended purpose. A small portion of this distribution capacity may be used for PS so as to meet the specific need of the subscribers of these DPOs. At present there are more than 1600 registered MSOs. A simple calculation with 15 PS, each exclusive to respective DPO suggests that there can be more than 24,000 PS. Given the limitations on oversight mechanism available for such channels, any more leverage to increase the number of channels further will put unbearable strain on monitoring/oversight. The technical arrangement in DAS is such that a TV channel can only be inserted at head-end. Even if an LCO wishes to provide his channel, the feed for same must be provided at the head-end of the MSO. It is very much possible for an MSO to allocate some channels out of available limit of 15 PS channels to LCOs. As all the channels are inserted at the level of MSO, it will be responsibility of the MSO to register such platform channels. This will provide sufficient pool of availability on networks for registered satellite TV channels.

There are more than 900 registered TV channels. These channels can only reach the consumers through the networks of DPOs. Sufficient channel carrying capacity is, therefore, necessary for these broadcasters too. Moreover, among the registered TV channels, there is sufficient spread across regional languages and genres. Therefore, there is no pressing requirement, for many PS channels. Liberal regulatory framework of PS should not encourage bypassing of traditional broadcast route. In case, there is compelling regional content available on a local platform channel, such entity can register itself as a broadcaster. The ability to provide a large number of PS channels will present an arbitrage opportunity for DPOs as they may circumvent the regulations on broadcasting.

Security clearance of DPOs
TRAI recommendation. All DPOs, other than MSOs and LCOs operating in non-DAS areas, are already security cleared. For these MSOs and LCOs, TRAI recommends that at any time before the MIB obtains the security clearance, it is determined that the programming service offered on PS and which has been registered on the online system is inimical to India’s national security or to the public interest, MIB may require the DPO to withdraw from distribution the PS channel or the programming service and/or cancel the registration.

MIB view. TRAI’s assumption that all the DPOs operating in DAS areas are security cleared is not correct since security clearance for LCOs is not a pre-requisite for grant of registration. Further, with the completion of digitization process there is no distinction between the DAS and non-DAS areas. At present about 72 percent MSOs are not security cleared by MHA as during their registration period security clearance was not a pre-requisite. More so, none of the LCOs are security cleared. It is recommended to extend TRAI recommendation for security clearance of MSOs/LCOs in non-DAS areas, to all MSOs/LCOs who are not security cleared and wish to offer PS to their subscribers. That is to say, MIB will obtain security clearance of all MSOs/LCOs, who wish to offer PS and were not MHA security cleared at the time of registration, while they run their PS. However, if at any time before the MIB obtains the security clearance, it is determined that the programming service offered on PS and which has been registered on the online system is inimical to India’s national security or to the public interest, MIB may require the MSO/LCO to withdraw from distribution of the PS channel or the programming service and/or cancel the registration.

TRAI response. It is desirable that all the MSOs offering PS are security cleared. In view of the above TRAI agrees with the suggestion.

Draft response to the back reference dated October 23, 2020 received from MIB on TRAI’s recommendations dated November 13, 2019. The TRAI recommendations, views of MIB thereof and the draft response of the authority are:

Program transmission by DPOs
TRAI recommendation. The authority recommends that: (a) the program transmitted by the DTH operator as a PS shall be exclusive and the same shall not be permitted to be shared directly or indirectly with any other DPO; (b) program transmitted by the DTH operator as a PS shall not directly or indirectly include any registered TV channel or Doordarshan channel or foreign TV channel. Time-shift feed of registered TV channels (such as +1 services) shall not be allowed as a PS; (c) DTH operator shall ensure and provide an undertaking to the ministry in the format prescribed by the ministry that the program transmitted is exclusive to their platform and not shared directly or indirectly with any other DPO; and (d) in case the same program is found available on the PS of any other DPO, MIB/TRAI may issue direction to immediately stop the transmission of such program. MIB also reserves the right for cancellation of registration of such PS of the DTH operator.
MIB View. It is proposed to adopt the above recommendations in respect of PS offered by MSOs/LCOs also by appropriately replacing the word DTH with MSO/LCO wherever required.

TRAI response. To ensure uniformity of guidelines of DTH operators and MSOs, it is desirable that abovementioned recommendations may also be applicable to all DPOs including MSOs. The authority agrees with the views of MIB.

Activation/deactivation of channels
TRAI Recommendation. The authority recommends that the DTH operators shall provide an option of activation/deactivation of PS as prescribed in the orders/directions/regulations issued by TRAI from time-to-time.

MIB view. It is proposed to adopt the above recommendations in respect of PS offered by MSOs/LCOs also by appropriately replacing the word DTH with MSO/LCO wherever required.

TRAI response. DAS system provides for the features related to activation/deactivation of channels on a-la-carte basis. This should be applied on all DPOs including the MSOs. Once applied, this feature will help the consumers in exercising the choice. The authority agrees with the views of MIB. The authority recommends that DTH operators/MSOs/IPTV/HITS operators shall provide an option of activation/deactivation of PS as prescribed in the orders/directions/regulations issued by TRAI from time-to-time.

Categorization of channels under Platform Services
TRAI recommendation. The authority recommends that: (a) the PS channels shall be categorized under the genre Platform Services in the electronic programmable guide (EPG) subject to orders/directions/regulations issued by TRAI from time-to-time; (b) the respective MRP of the PS shall be displayed in the EPG against each PS subject to orders/directions/regulations issued by TRAI from time-to-time; and (c) a provision for putting a caption as Platform Services may be required to distinguish the PS from the linear channels. Government may decide the caption in a size which is visually readable by the consumers.

MIB view. It is proposed to adopt the above recommendations in respect of PS offered by MSOs/LCOs also by appropriately replacing the word DTH with MSO/LCO wherever required.

TRAI response. To ensure uniformity of guidelines of DTH operators and MSOs, it is desirable that abovementioned recommendations may also be applicable to MSOs. DAS system provides for the features related to classification on EPG, which should be applied on all DPOs including MSOs. This feature will assist the consumers in getting explicit information on their TV screen. The authority agrees with the views of MIB. The authority recommends the same for the DTH operator/MSOs/IPTV/HITS operator.

Backgrounder
The recommendations on Regulatory Framework for Platform Services in 2014 were issued when digitization process was not complete. As the process has since been completed in March 2017, the recommendations as regards those for DAS areas only remain relevant now.

The authority issued the recommendations on PS offered by DTH Operators on November 13, 2019 after receiving a reference from MIB dated July 2, 2019. The MIB referred to TRAI’s earlier recommendations on Regulatory Framework for Platform Services and sought TRAI recommendations by reconsidering the issues regarding PS for DTH operators.