Sony, Discovery want TRAI to probe functioning of cable TV operators

Sony Pictures Networks India and Discovery Communications have asked for an investigation into possible cartelisation and collusion in the cable TV segment.

In a letter to the Telecom Regulatory Authority of India (TRAI), Discovery said that there are instances where a dominant distribution platform operator (DPO) has made it difficult for some broadcasters to have access to its distribution network for carrying content to consumers.

“It has been observed in many States that the majority of the cable TV network is controlled by a single entity, virtually monopolising the distribution of cable TV services in these States. Such monopolies and market dominance may not be in the best interest of consumers, and may have serious implications in terms of competition, quality of service and healthy growth of the cable TV sector,” said Discovery.

Cross-ownership
A key issue raised by the broadcasters is that certain entities have cross-holding across the television value chain, from owning certain broadcasters as well as distribution platforms, which are cable operators. As a result of this cross-ownership, cable operators will give preferential treatment to the channels owned by their parent entity while avoiding the channels of their competitors.

“There is a need to regulate certain unhealthy practices/issues in cable TV services due to the existence of cross-holding in the sector, both vertically and horizontally. This cross-holding can lead to preferential treatment by DPOs to members of their own group,” said Sony Pictures Networks.

TRAI has floated a consultation paper to review the market competitiveness of the television services distribution sector.

In response to this paper, Sony said that TRAI should ensure that “no channel should be given preference by a cable operator over its competitor due to the fact that a vertically integrated group, to which such channel belongs, owns part of or controls the said cable operator, directly or indirectly”. Sony wants also wants information regarding placement, carriage, subscription of such channels on the operator’s network, and any cost or revenue accruing to such group should be mandated to be shared with the TRAI. Moreover, Sony also wants rules and regulations in place so that these types of direct or indirect ownerships are also subject to regulatory scrutiny.

Local competition
Lack of local competition among cable operators worsens the impact of these cross-holdings. “It is a matter of fact that the level of competition in the MSOs’ business is not uniform across the country. Certain States (Delhi, Karnataka, Rajasthan, West Bengal, and Maharashtra) have many MSOs providing their services, whereas in certain other States like Tamil Nadu, Punjab, Orissa, Kerala, Uttar Pradesh and Andhra Pradesh, the cable television market is dominated by one or two MSOs,” said Discovery.

Discovery said there is a need to set up authorities at the State level to initiate an investigation as well as persecute and sanction such anticompetitive behaviour.

Sony, however, cautions that investigation and exploration into these anticompetitive practices should be left with the Competition Commission of India, a body set up by the government for such tasks.

“Market dominance is a specialist field which should be left to expert statutory bodies (like CCI) to determine. TRAI should leave it to the CCI to decide if market dominance exists and whether there is an adverse effect on competition,” said Sony. The Hindu BusinessLine