IBDF recommends TRAI to deregulate the broadcasting sector

TRAI had invited comments to the Consultation Paper on Review of Regulatory Framework for Broadcasting and Cable services Aug 8, 2023.

The Indian Broadcasting & Digital Foundation sent in its comments that included that the regulator deregulate the broadcasting sector and allow the competitive market forces to playout in the sector for the benefit of consumers and all service providers.

The rationale-“The fact that all data pertaining to the industry point to the fact that the industry is highly competitive, the next regulatory decision from TRAI will have a lasting impact on the growth prospects of service providers across the B&CS value chain and the manner of consumption of TV channels. Therefore, the time is ripe for TRAI to unlock the potential of the industry by furthering the deregulatory reforms, starting with forbearance vis-à-vis the offering, packaging and pricing of TV channels.

In respect of areas where forbearance may best be implemented in a phased manner, then the framework for sunset provisions relating to interconnection and related regulatory principles should be identified and notified.

As TRAI implements more regulatory reforms, we recommend that market-driven agreements/deals/arrangements between broadcasters and DPOs be allowed/permitted. In the event the DPO and the broadcaster are not able to execute a market-driven agreement/arrangement, the option of executing a Reference Interconnect Offer is to be provided. Such RIO-based agreements should be based on the RIOs/rate cards published by the broadcasters and the subscriber numbers and target markets published by the DPOs.

Importantly, there should not be any restriction on the pricing and packaging of broadcasters’ RIOs. It is of utmost importance that DPOs should not be permitted to break broadcasters’ bouquets as is the case currently so that inter-alia level playing field is maintained, which is in the best interests of all stakeholders including broadcasters and specially the consumers. Any such unbundling is inter- alia susceptible to misuse by DPOs, will dissuade broadcasters from providing channels in bouquets and will completely distort the present regulatory framework as there will be no sanctity of pricing of the channels / bouquets as declared by the broadcasters.

As recognized by TRAI, there is adequate competition in the sector, which will ensure competitive prices for consumers. This will allow TRAI to focus its regulatory efforts towards ensuring a better quality of services.

For the growth of any sector, it is essential that the interest of all service providers is protected.

However, protecting the interests of all service providers (both broadcasters and DPOs) should not be equated with protecting them from competition. Rather, from a regulator’s point of view, protecting the interest of service providers should mean creating an enabling market that provides them the opportunities to survive in a highly innovative, hyper competitive and price sensitive market.

For example, startup incubators are useful to recognize the risks and opportunities, providing support and levelling playing fields towards creating a business and growth-enabling environment. However, initial support mechanisms must be withdrawn in a timely manner to allow the startups to mature and be able to efficiently and independently function in competitive markets. Prescriptions in the current regulatory framework have created inefficiencies in the market by allowing a less efficient DPO to also get the same benefits/incentives as compared to a more efficient DPO.

Allowing market-driven agreements/deals will incentivize broadcasters to innovate in high quality of content and DPOs to innovate and upgrade their services, both of which are in the interest of the consumers, which in turn will result in investments to the sector and the long-term growth of the sector.

As noted above, most of the regulations introduced in the B&CS sector aim to address competition-related issues and issues relating to consumer interests / choice. TRAI would still need to manage these issues and address specific instances of misconduct (if any) in deregulated environment as well. Any allegations or complaints related to antitrust or competition issues in specific target markets/geographical areas can then be investigated by TRAI.

If there is any instance of misconduct, TRAI can then introduce suitable remedial measures specific to the affected parties in these specific areas, instead of regulation which cuts across the entire industry. Such remedial measures would then be removed once effective competition is restored in the given area.

Recommendation: We, therefore, recommend that TRAI further de-regulates the sector to allow the competitive market forces to playout in the sector for the benefit of consumers and all service providers.”

For more details, visit https://www.trai.gov.in/sites/default/files/IBDF_12102023.pdf

BCS Bureau