TRAI’s New Rules For Cable, DTH: Will A Rollout Mired In Legal Battles Delay Affordable TV Subscriptions

The Telecom Regulatory Authority of India (TRAI) is in the process of implementing the new guidelines that dictate the pricing of cable and direct to home (DTH) television subscription services. The idea behind the regulator implementing the new rules is to make the TV subscriptions a bit more affordable. The framework comprises of Interconnection Regulations 2017, Quality of Service & Consumer Protection Regulations 2017 and Tariff Order 2017, which originally had to come into effect from the end of 2018 but was extended till the end of January for a smoother rollout of new tariff plans.

However, it has been a bit of a mess thus far.

Even though TRAI has issued notifications that the current DTH and cable TV subscriptions will be valid till the end of January and shall have to mandatorily switch to the new tariff regime, not every television services subscriber has been migrated to the new tariff plans. Among the DTH providers, Dishtv, as well as the Dishtv-owned d2h and Airtel Digital TV (pictured above), have already rolled out the new tariff plans for subscribers to choose from. However, India’s largest DTH provider, Tata Sky, has not rolled out any new plans for subscribers or invited them to make the switch to the new channel pricing, on the lines of the new TRAI guidelines.

However, broadcasters have confirmed their new ala-carte and bouquet pricing for channels.

TRAI has capped the pricing, for broadcasters, for each standard definition (SD) and high definition (HD) channel at Rs19, before taxes. Broadcasters are free to offer their channels as a part of a larger bouquet(s) as they wish but have to also mandatorily offer each channel on an ala-carte basis. Most broadcasters have significantly reduced the pricing of channels to comply with the new guidelines, whether picked individually or as part of a bouquet. Star India, for instance, has the most elaborate bundles—different options for Hindi, Marathi, Bengali, Tamil, Kannada, Malayalam and Telugu languages, with the maximum prices for premium channels as well as HD channels set at Rs 19 per channel. Rival broadcasters, such as TV18 Broadcast Ltd., Sony Pictures Networks India Pvt. Ltd., Zee Entertainment Enterprises Ltd. and Discovery Communications India, to name a few, have followed the same guidelines for the new tariff plans.

On the other hand, Tata Sky and Bharti Telemedia (which owns the Airtel Digital TV DTH service), have gone to the Delhi High Court against the TRAI’s Tariff Order 2017. The challenges are focused on TRAI’s authority when it comes to framing guidelines and laws which dictate channel pricing, tariff plans, discounted pricing and offers as well as make existing channel packages redundant.

Earlier, broadcaster Star TV had also challenged TRAI on similar issues in the Madras High Court. The Court upheld the tariff order implementation, which Star TV then challenged in the Supreme Court. If the Supreme Court order is anything to go by, the current legal battles could also go in TRAI’s favor. The apex court had noted that one of the TRAI’s functions was to “facilitate competition and promote efficiency in the operation of telecommunication services (which includes broadcasting services) so as to facilitate growth in such services.”

That could have a bearing on the ongoing legal face-off.

One of the contentions that DTH operators and broadcasters have is the capping on discounts. Under the new tariff regime, discounts offered on a bouquet cannot be more than 15% of the price of the individual channels when offered as ala-carte, or standalone. In the Delhi High Court, Tata Sky has specifically asked the court to understand how TRAI came to the decision to implement the upcoming tariff plan. The operator also challenges that the new guidelines will impact the business adversely, and impact profitability as well.

The precedence for that also could have been set by the Supreme Court. “The Explanatory Memorandum shows that the focus of the Authority has always been the provision of a level playing field to both broadcaster and subscriber. For example, when high discounts are offered for bouquets that are offered by the broadcasters, the effect is that subscribers are forced to take bouquets only, as the a-la-carte rates of the pay channels that are found in these bouquets are much higher. This results in perverse pricing of bouquets vis-à-vis individual pay channels. In the process, the public ends up paying for unwanted channels, thereby blocking newer and better TV channels and restricting subscribers’ choice. It is for this reason that discounts are capped. While doing so, however, full flexibility has been given to broadcasters to declare the prices of their pay channels on an a-la-carte basis. The Authority has shown that it does not encroach upon the freedom of broadcasters to arrange their business as they choose. Also, when such discounts are limited, a subscriber can then be free to choose a-la-carte channels of his choice,” the Supreme Court had said in its order.

At present, the Delhi High Court is still hearing the petitions by Tata Sky and Airtel. While Tata Sky wanted protection against fines or penalties for failure to implement the new tariff plans because the case was ongoing, the Delhi High Court has already told the DTH company to do so at its own risk. At the time of writing this, Tata Sky’s website has not been updated to reflect the pricing for channels under the new guidelines—for instance, while the new pricing for Star Plus HD is now capped at Rs 19, Tata Sky is still reflecting the ala-carte pricing as Rs 30. The case now comes up for hearing on 23 January.―News18